NEW YORK — Banks that bet heavily on mortgage backed securities have been taking writedowns on losses in the subprime market and the damage is hurting the bottom line. So far the total estimate is put at $20 billion.
Recently, Merrill Lynch announced a $5.5 billion writedown. Then, combined losses from Citigroup and Deutsche Bank were placed at $9.8 billion. In September, Bear Sterns, Lehman Brothers, Goldman Sachs and Morgan Stanley posted a combined hit of $4.3 billion.
The bleeding isn't over yet it seems, with JP Morgan Chase set to announce its quarterly results later this month. Securities that were backed by subprime mortgages before the housing bubble burst are now bust as borrowers have defaulted on the loans, unable to make the payments.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
- Exclusive discounts on ALM and CU Times events.
- Access to other award-winning ALM websites including Law.com and GlobeSt.com.
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
