Concerning losses associated with the U.S. subprime mortgage problem, which triggered the recent financial crisis, the U.S. authorities initially announced that these totaled about 50 to 100 billion dollars. Ultimately, the amount bloated to several hundred billions. Amid the vortex of a crisis, authorities tend to yield to wishful thinking.
We need to bear in mind again the need to expect the worst and plan for the best when the financial system faces preliminary tremors. A delay in recognition also held true in terms of the gravity of the effects that nonperforming loan problems had on the economy.