US Subprime Crisis: layman's guide

ever wonder some obscure thing like the subprime crisis in the US has affected you. read on.

"Traditionally, banks have financed their mortgage lending through the deposits they receive from their customers. This has limited the amount of mortgage lending they could do.

In recent years, banks have moved to a new model where they sell on the mortgages to the bond markets. This has made it much easier to fund additional borrowing,

But it has also led to abuses as banks no longer have the incentive to check carefully the mortgages they issue."

More at BBC.com