Particularly the smaller economies of the world find it increasingly difficult to maintain orderly domestic financial conditions in an environment of financial globalisation, financial market integration and exchange control liberalisation. The truth is perhaps that no solitary cause can be singled out as the only reason for the development of the present international financial crisis.
When negative amortization is possible, the guidance suggests that institutions alert consumers about the consequences of increasing principal balances and decreasing home equity. If both reduced-documentation and full-documentation loan programs are offered, the draft guidance advises institutions to inform consumers if they will pay a pricing premium for the reduced-documentation loan.