Kim, Don H.; Loretan, Mico; Remolona, Eli M. - East Asian Bureau of Economic Research (EABER) - 2009
In the turmoil of 20072009, troubles in a relatively small corner of the US mortgage market escalated into a crisis of global proportions. An amplification mechanism were the huge valuation losses on credit instruments, which dwarfed actual losses from default. We argue that these valuation...