Some of the first cracks in the nonbank sector appeared in April 2007, when New Century Financial Corporation, at one point the second-biggest subprime mortgage lender, filed for bankruptcy after its creditors pulled back on fears about its losses.
4 A few months later, with subprime assets falling in value, money market investors refused to roll over the assetbacked commercial paper that had been funding many of these subprime assets. With this market shrinking dramatically, the banking sector was left on the hook to support entities that banks had sponsored or to which they had provided some form of credit or liquidity support.