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Tuesday, January 08, 2008

Banks could lose a quarter TRILLION dollars

Banks could lose as much as $242 billion from the mortgage crisis, leaving the industry in need of more capital, analysts warned on Monday. Since subprime mortgage problems erupted in August, banks, thrifts and brokerage firms around the world have written down the value of mortgage-related assets by more than $94 billion. Banks could suffer another $59 billion to $148 billion of such losses over the next few years, partly depending on how fast house prices in the U.S. fall, the analysts forecast. That would leave total losses at between $153 billion and $242 billion, forcing the banking industry to raise more capital.

Edited (2/1) to add:
Standard & Poor's estimates that banks, credit unions and foreign financial institutions may be hit with more than $265 billion in losses from securities tied to subprime mortgages.
Posted by ALD at 3:35 PM

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ALD
I'm a veteran of two careers - high school math and physics teacher, retirement consulting actuary - who is now enjoying the pleasure of staying at home for my daughter. (My avatar is in honor of Will Durant, whom I consider the last true sage.)
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Chartered Financial Analyst, 2006

Chartered Financial Consultant, 2005

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