In my book I analyzed what caused the U.S. subprimemortgage market meltdown and why this triggered aglobal credit crunch. In the years before risinghouse prices, favourable market conditions and awell-defined channel of financial intermediariesdrove the expansion of the U.S. subprime mortgagemarket. The result was that borrowers with shakycredit history who did not satisfy standardunderwriting criteria obtained loans, which waspraised as innovation. Subprime mortgage loans werepacked into complex bundles of securities and sold toinvestors all around the world. In 2006, thousands ofhomeowners became delinquent and defaulted on theirmortgage payments when the housing bubble wasbursting and interest rate reset to higher levelsbecause they could only afford the initial teaserrate of their hybrid adjustable rate mortgages.Unknown exposure dried up the demand formortgage-related securities. Banks had to write downbillions of dollars because of losses ofsubprime-related securities and some of them werebailed out. Fears and uncertainty caused a crisis ofliquidity and confidence, a global credit crunch infinancial markets and a sell of on equity markets.