SUB-PRIME CRISIS

Presented by-
Sushant Mhaske -36
Pooja Mhatre -37
Priti More -38
Chirag Mota -39
Remya Nair -40
What is Sub-prime crisis
The sub prime mortgage
crisis is an ongoing real
estate crisis and financial
crisis triggered by a dramatic
rise in mortgage
delinquencies and
foreclosures in the United
States, with major adverse
consequences for banks and
financial markets around the
globe.
 Countries faced this crisis

Many countries, some

of them are-
• European and Asian
countries:
Like India, Japan
and China etc.
 IMPACT ON INDIAN ECONOMY
• IT
• Growth lower than previous year
• Less spending on new projects
• Services get affected - 75% revenue from US

• Real Estate
• Restrictions on Indian banks
• Google cut down its office space requirement from
5lakh sq feet to 3 lakh sq feet.
• German postponed its plan to open its
operation in Gurgaon.

• Demand for residential space also affected.

• Auto industry
• BRIC operations helped GM & Ford from
major loss
• Banking Sector
• ICICI bank lost over Rs 10.56 billion
• Global majors like Citibank, Merrill Lynch & Deutsche
bank lost over US $ 180 billion

• Textile
• Export declined by 22%
• Cut production by 10%
• Unemployment
 Causes

• Interest rate
• Customer’s profile
• Housing Bubble
• Mortgage finance
• Lines of credit
 Solutions
• Check the profile
• Borrower's ability
• Analyze credit risk
• Reduce interest rate
 Conclusion
• No housing bubble no trouble for borrowers.

• Experienced and knowledgeable players.

• Government interventions

• Social disruption and political fallout

• Well documented