Write-downs worse than expected

The fallout from the credit crisis continued in October, with several US investment banks reporting unexpectedly large write-downs that raised doubts about the competence of their risk management functions.

On October 24, Merrill Lynch reported a write-down of $6.9 billion across collateralised debt obligations (CDOs) and a $1 billion write-down across US subprime mortgages, well above the $4.5 billion total write-down it disclosed in a pre-earnings statement on October 5.

"We re-examined our

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