Monoline turmoil raises conduit writedown fears

Falling credit ratings at bond insurers have raised the potential for another round of structured credit writedowns.

Bank conduits known as variable interest entities could cost their managers $88bn in writedowns thanks to exposure to monoline guarantors like Ambac and MBIA, according to research provider CreditSights.

Banks and brokers hold financial assets, including mortgage-related CDOs, in unconsolidated variable interest entities. VIEs have a similar business model to structured investment v

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