Morgan Stanley and Merrill Lynch reveal further losses

The subprime crisis continues to deepen as Morgan Stanley and Merrill Lynch, two of the worst-affected US banks, revealed further damage.

Morgan Stanley announced on November 7 that it lost $3.7 billion on exposure to collateralised debt obligations of asset-backed securities (ABS CDOs) based on US subprime mortgages, and on the mortgages themselves, in September and October alone. With a month to go until the end of its financial year, it has $2.7 billion net losses on subprime exposure.

The bank

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