
MBIA looks to past head as monolines flounder
The last three months have been stressful for the monoline companies, which are struggling to shore up their AAA ratings in the face of the market value carnage wreaked by the US subprime crisis.
In a 'letter to owners' written by Brown on his appointment, the monoline announced that it had undertaken a $2.6 billion capital-raising plan over the 60 days leading up to February 19.
“The industry now faces extreme challenges in its ability to raise capital at attractive rates and in sufficient quantity, to maintain a AAA rating on the existing portfolio and sustain an adequate capital base to permit the writing of new policies in a stress environment,” said Brown in the letter.
MBIA’s main competitor, Ambac Finanial Group, also underwent a senior management reshuffle on February 15. The company restructured its risk division, and created the new role of chief risk officer for David Wallis.
Wallis had been in charge of portfolio risk management at the firm, and will now oversee credit risk management and capital and risk analysis.
The capital and risk analysis team will be headed by Bob Selvaggio, and Cathy Matanle will take Wallis’ previous role as head of portfolio risk management.
Other players in the market have also had a turbulent time recently. On February 14, Moody’s downgraded FGIC’s Aaa rating to A3, leading the insurer to request permission from the New York State Insurance Department to split its structured credit and municipal bond portfolios.
At the same time, ACA Capital, the first monoline to be downgraded in the wake of the credit crisis, entered into its third forebearance agreement with its credit counterparties, staving off default until April 23.
See also: Monoline costs ANZ $200 million
Monolines show no appetite for Buffet
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on People
Barclays retools inflation desk with two senior hires
UK bank raids Deutsche Bank and JP Morgan for new regional heads
Asia moves: Senior hires at Nomura, HKEX and more
Latest job news from across the industry
Asia moves: Senior hires at Citi, Nomura and more
Latest job news from across the industry
People: UBS rehires Ermotti for top job, Citi promotes Selva to COO, and more
Latest job news across the industry
People: More Goldman sackings, Citi promotes for Emea, and more
Latest job news across the industry
Asia moves: senior hires at Societe Generale, Deutsche Bank and more
Latest job news from across the industry
People: Credit Suisse’s FX revamp; Barclays hires co-heads; and more
Latest job changes across the industry
Asia moves: senior hires at Natixis CIB, Citi and more
Latest job news from across the industry