Fitch: Banks have disclosed 80% of subprime losses
By Daniel at 14 May, 2008, 8:45 am
NEW YORK (MarketWatch) - Fitch Ratings agency said Wednesday that global banks
have disclosed 80% of their projected losses on subprime mortgage-related
investments, making further ratings actions minor. “As a significant proportion
of the losses have been disclosed, further ratings action arising from ABS-CDO
and subprime RMBS exposures is likely to be minimal,” Fitch analysts said in a
report. The ratings agency estimated that losses from the collapse of the $1.4
trillion subprime mortgage market could eventually total as much as $550 billion,
if valuations were calculated using subprime securities indexes ABX and TABX. The
company said it expected losses to be more likely to be in the $400 billion
range, as existing indexes are currently “at best an imperfect proxy.” Fitch
noted that four banks, Citigroup Inc. , UBS, Merrill Lynch and Co. [s:MER] and
Deutsche Bank AG , were responsible for 60% of disclosed losses thus far.
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