The continuing increase in the rate of serious delinquencies for such mortgages reflects in part a decline in underwriting standards in recent years as well as softening house prices. Delinquencies on these mortgages are likely to rise further in coming quarters as a sizable number of recent-vintage subprime loans experience their first interest rate resets.
6  BIS central bankers’ speeches  The proposal for an additional separation requirement supports the goal that supervisors should have effective tools to make sure that banks’ recovery and resolution plans can actually work.