Credit crisis losses could reach $400 billion
Write-offs of losses on securities linked to US subprime mortgages could reach $400 billion, according to German finance minister Peer Steinbrück, speaking after the recent G-7 meeting in Tokyo.
G-7 finance ministers and central bank governors met on February 9 to discuss issues facing the world economy, including the effects of the current global credit crisis. The G-7 has said it plans to act on the Financial Stability Forum’s (FSF) interim recommendations, released on February 5, “to rebuild confidence in the creditworthiness and robustness of financial institutions”.
The FSF recommended that financial institutions’ give timely and full disclosure of losses and valuation of structured products, called on regulators to improve transparency through the implementation of the Basel II framework, and recommended stronger liquidity risk management through the development of a global consistent approach by the Basel Committee.
In its report, the FSF also called for better understanding of financial institutions’ exposure to off-balance sheet vehicles, and improved transparency and origination standards in the originate-to-distribute model of structured products. It also criticized potential conflicts of interest and poor-quality information at credit rating agencies.
The FSF is a committee of international bank regulators and finance ministries set up in 1999 to promote international financial stability.
See also: Investigators step up pressure on rating agencies
UBS startles market with $14 billion writedown
Citigroup downgraded after monumental losses
Subprime losses hit Q4 results
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 Regulation
Prop shops recoil from EU’s ‘ill-fitting’ capital regime
Large proprietary trading firms complain they are subject to hand-me-down rules originally designed for banks
Revealed: the three EU banks applying for IMA approval
BNP Paribas, Deutsche Bank and Intesa Sanpaolo ask ECB to use internal models for FRTB
FCA presses UK non-banks to put their affairs in order
Greater scrutiny of wind-down plans by regulator could alter capital and liquidity requirements
Industry calls for major rethink of Basel III rules
Isda AGM: Divergence on implementation suggests rules could be flawed, bankers say
Saudi Arabia poised to become clean netting jurisdiction
Isda AGM: Netting regulation awaiting final approvals from regulators
Japanese megabanks shun internal models as FRTB bites
Isda AGM: All in-scope banks opt for standardised approach to market risk; Nomura eyes IMA in 2025
CFTC chair backs easing of G-Sib surcharge in Basel endgame
Isda AGM: Fed’s proposed surcharge changes could hike client clearing cost by 80%
UK investment firms feeling the heat on prudential rules
Signs firms are falling behind FCA’s expectations on wind-down and liquidity risk management