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Car loans zooming into sub-prime trouble; but financial crisis not likely

For investors, the allure of sub-prime car loans is clear as the securities composed of such debt can offer 5% yields
Tuesday, July 18, 2017 - 05:50

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No one is suggesting that sub-prime car loans will unleash the next crisis. But since the Great Recession, business has exploded. In 2009, US$2.5 billion of new sub-prime auto bonds were sold. In 2016, US$26 billion were, topping average pre-crisis levels, according to Wells Fargo.

New York

IT'S classic sub-prime: hasty loans, rapid defaults and, at times, outright fraud. Only this isn't the US housing market circa 2007. It's the US auto industry circa 2017.

A decade after the mortgage debacle, the financial industry has embraced another type of sub-prime

sentifi.com

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