Quote:
Originally Posted by Barefootsies
Yeah, that's not going to happen. The government is not going to let major banking brand names go under.
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the biggest problem now is with these capital insurers:
""America's biggest mortgage bond insurers collectively need a $200 billion (Ł101 billion) capital injection if they are to maintain their key AAA credit ratings, a figure that dwarfs a plan by New York regulators to put together a capital infusion of up to $15 billion, a leading ratings expert said yesterday."
and
""Banks worldwide may need to raise as much as $143 billion of additional reserves to satisfy regulators if bond insurer rating cuts trigger downgrades for the securities they guarantee, Barclays Capital analysts said.""
and:
"Everyone thinks they're looking at the cliff over Armageddon," said Ed Rombach, senior derivatives analyst at Thomson Financial. "If you think the write-downs have been bad so far, the next write-downs could be twice as big."
from:
http://www.washingtonpost.com/wp-dyn...011803592.html
So the banks need to get as much capital as possible in order to survive next writedowns/write-offs