Government stakes in banks raise counterparty conundrum
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LONDON - The collapse of Lehman Brothers in September has put greater focus on the issue of counterparty credit risk. But dealers admit to being stumped as to how the taking of equity stakes in major banks by governments across the globe will play out.
Governments in the UK, Europe and the US have announced a series of measures over the past month to shore up troubled banks and restore confidence in the financial system. In many cases, this has involved governments injecting capital into banks in
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