During the Global Financial Crisis (GFC), non-US investors’ ownership of US residential mortgage-backed securities (RMBS) was a key way in which they were exposed to problems in the US housing market. Of course, there were problems in housing markets elsewhere that caused “home-grown” problems to lenders in those places. But contagion from the US housing market per se manifested itself directly through the repackaging and sale of US-originated and securitised residential mortgage loans to buyers around the world. Today, the risk of contagion spreading abroad from problems in the US commercial property market is less, for a couple of reasons.
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