The GSEs have been only indirect players in the subprime market, purchasing mainly AAA-debt that has been collateralized with subprime mortgages and leaving the higher risk components of the subprime mortgages to be funded by other market participants. 6  BIS Review 22/2007  References Ambrose, Brent W., Michael LaCour-Little, and Anthony B. Sanders (2004).
The authorities must be pragmatic in seeking to adapt their tools to safeguard stability. The Italian banks have clearly suffered from the crisis; as national and European supervisory authority we now have to handle delicate and difficult situations. We are doing so in an environment that has undergone profound and rapid changes, cooperating actively with all the institutions and authorities concerned.