Merrill Lynch sues insurer over credit default swaps

NEW YORK - US investment bank Merrill Lynch is suing bond insurer Security Capital Assurance (SCA), alleging the firm is avoiding financial obligations worth up to $3.1 billion regarding seven credit default swaps. SCA has already said it will write no new business while it tries to raise new capital to address other potentially large losses.

The firm admitted a $1.197 billion fourth-quarter loss and has said it will try to terminate existing contracts to minimise further losses.

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