Why 2008's crisis is named subprime crash?


The 2008 financial crisis was caused by a number of factors, but it is most commonly associated with the subprime mortgage crisis. This is because the crisis was precipitated by a large number of defaults on subprime mortgages, which were loans made to borrowers with poor credit scores.

Subprime refers to a category of borrowers with weakened credit profiles. Subprime borrowers typically have lower incomes, weaker credit histories, and higher debt-to-income ratios than prime borrowers. They may also have a history of making late payments or skipping payments altogether. Subprime borrowers represent a higher risk to lenders, and as a result, they generally pay higher interest rates and may be required to provide collateral.