The Bursting of the Bubble: Savings Banks, a Death Foretold

  • Gabriel Tortella
  • José Luis García Ruiz
Part of the Palgrave Macmillan Studies in Banking and Financial Institutions book series (SBFI)


There is agreement in calling the crisis that began in 2007 in the United States and in several European countries the ‘Great Recession’. The origin of the crisis in the United States lay in the subprime mortgages that had been granted to insolvent or semi-solvent clients by institutions that practised a policy of ‘originate and distribute’, i.e., of granting credits and then transferring the risk to others through the securitization of these credits. In previous years, in the midst of continuing increases in the price of real estate, rating agencies had assessed positively this way of distributing of risk, regardless of the high probability of default in the medium term of the mortgage contracts that were at the core of these securities.


Real Estate Commercial Bank Public Debt Credit Default Swap Great Recession 
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Copyright information

© Gabriel Tortella and José Luis García Ruiz 2013

Authors and Affiliations

  • Gabriel Tortella
  • José Luis García Ruiz

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