ABSTRACT
The credit crunch coincided with preparation for Basel II regulations, which came into force at the beginning of 2008. As the credit crunch added to investors' concerns, a black hole opened up in the listed property sector in Spain. Spanish banks had adopted similar sub-prime lending trends, extending loans to those on a low income or with a bad credit rating. Irish investors appeared to side-step the credit crunch, feeling immune with Dublin's strong financial sector still unaffected by the shifts in the global markets. Morgan Stanley, Lehman Brothers, Bank of America and JP Morgan were among the sellers; Credit Suisse was marketing a large portfolio of loans at a discount of up to 15%. As Lehman struggled to right itself, the extent of its commercial property activities in Europe and the US emerged as integral to its precarious financial position.
