French finance minister says subprime crisis shows globalization will last

The value of assets fell sharply amid an increase in defaults of subprime mortgages in the United States. Investors began to pull funds and creditors started asking for more collateral to back their loans, causing a credit crunch. Lagarde said French banks have a "very limited exposure" to subprime products. The real estate market — which her government is trying to stimulate through tax exemptions on interest payments — should not be affected, she said. Keen to avoid any risk to France's fragile economic growth, she urged banks not to tighten credit for companies "simply because it is time for them to finance investment."