Stock markets tumbled, as investors sold equities and moved funds into safe-haven investments, like government bonds. Several investment funds holding asset-backed securities – with subprime mortgage elements – suspended withdrawals. At roughly the same time, a number of European banks made public their direct and indirect exposures to the US subprime mortgage market.
Yet, the global economy saw the price of a barrel of oil rise from just under $ at the start of this decade to almost $ as at the end of 2007 (Chart 1) and in this same period developing countries registered the highest growth rates in decades.