These developments subsequently caused a widening of credit spreads on corporate bonds and a chain reaction of financial institutions' failures and deteriorating performance in many countries, with prices of financial products – especially securitized ones – dropping and these products eventually becoming nonperforming assets of the financial institutions holding them.
As you know, the turmoil in global financial markets and the subsequent global economic downturn was triggered by the U.S. subprime mortgage problem, which surfaced in the summer of 2007. This problem, however, was merely a prominent example of corrections to various financial and economic imbalances that had accumulated.