Spiralling debt
Asian financial institutions hold exposures to US monoline insurers that are struggling to maintain their much-vaunted AAA credit ratings. Who is at risk, and what is the likely fallout from the latest bout of credit contagion? By Kathleen Kearney
Financial institutions in Asia, like their peers elsewhere, have been hit by new credit shocks from Europe and the US in the aftermath of the subprime lending problems that emerged in mid-2007. The latest bombshell is that highly rated monoline insurers - which have insured $125 billion of structured credit products, according to rating agency Standard & Poor's (S&P), as well as billions of dollars of US municipal bonds - face downgrades or even defaults (see box).
The latest developments are
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