As a result, a wide range of banks and investors faced significant exposure, directly and indirectly, to the US sub-prime mortgage market.” (p.3) At the time of writing, the impact of the US sub-prime crisis on the prospects for the international economy are difficult to assess: not least because of the rate at which the losses which have been incurred by major financial institutions are being reported.
However, from media reports, it would appear that Bloomberg’s calculations of write downs by and credit losses of banks related to the sub-prime crisis, at approximately $ billion, provide a plausible threshold. These estimates are reproduced in Table 2, below.