THE worst is still not over for the US financial services sector, as major banks, investment houses and mortgage lenders continue to report huge losses from exposures to the subprime mortgage market.
Goldman Sachs, in a recent research report, estimated industry-wide losses from declines in the market value of subprime mortgage-related collateralised debt obligation (CDO) to be almost US$150bil.
Write-offs in the third quarter of the year totalled US$18bil from financial firms globally while recent pre-announcements from some firms indicated US$22bil would be written off in the fourth quarter, suggesting US$108bil unaccounted for mark-to-market losses coming, it noted.
The Organisation for Economic Cooperation and Development has estimated that losses could even hit US$300bil.
Earlier in the month, US banking titan Citigroup said it would have to write off up to US$11bil, far higher than anticipated. Other banks also warned of write downs, including Wachovia, Bank of America and JP Morgan Chase.
UBS Investment Bank believes the financial sector will generally continue to experience volatility, elevated credit spreads (including swap spreads) and less liquid conditions in the interbank market.
Read Complete Story
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment