Recent financial market turbulence  A rising wave of risk aversion prompted by increasing foreclosures in the US sub-prime mortgage market resulted in an abrupt deterioration in global financial market conditions in August 2007. Rising foreclosures and delinquencies were linked to sub-prime borrowers who had taken out adjustable rate mortgages.
As interest rates reset to higher levels, in line with the rising US interest rate environment, these borrowers found it difficult to pay their mortgage loans. This turbulence was not confined to the US sub-prime market, spreading to the broader mortgage market and financial markets more generally.