For all those who said the sub-prime mortgage crisis would not spread to Australia from the US, they were right. We have a small sub-prime sector, a tiny proportion of borrowers compared to the huge, seething mess in the US.

What all these experts forgot is that with financial markets being global these days, the knock-on effect on interest rates, on share prices and on confidence from the gathering crisis in the US and in Europe spreads quickly. It’s arrived here in force today with a widespread slump in bank share prices because of a warning from the newly listed independent mortgage group, RAMS Home Loans Group.

Of course, the impact of the sub-prime mess has already hit here: the increased volatility in share prices is one example, the plunge in the prices of investment banks like Macquarie and Babcock and Brown, and then there are the problems that have hit hedge funds, Basis Capital, Absolute Return and Macquarie Fortress. The estimated losses there are around $1 billion, at a rough guess.

But today the impact spread. A front-page story in The Australian quoting Bluestone, the sub-prime or low doc/no doc mortgage group, as warning that the impact was already being felt on its business, with higher interest rate spreads, and therefore higher interest payments.

Bluestone warned that this would also be felt by other lenders, including mainstream banks. But what surprised was the statement from RAMS before trading opened on the ASX at 10am, warning of a “material” impact on its finances from the widening ripples from the sub-prime implosion.

RAMS shares collapsed, plunging 54c to $1.21, or down more than 30%, with more than 16 million shares issued. Just after noon it was at $1.28.

Rams had just listed a fortnight ago, on July 27 at $2.50 a share through a listing that saw the shares placed with professional fund managers. Around $695 million was raised. The Commonwealth Bank’s funds management arm has just over 5%, Perpetual did have a similar holding, but shown its stake under 5%.

The founder of RAMS, Sydney businessman, John Kinghorn, received hundreds of millions of dollars in the sale, but has kept around 20%.

The shares in Mortgage Choice, another group, fell 20c to $2.73. The CBA was the biggest loser with its shares off $1.10 at midday. The shares of Westpac, the ANZ, St George and the National were also lower. Macquarie Bank shares slipped 94c to $70.61.

RAMS said it was too early to tell what that impact would be and that it was monitoring the situation.