Don't blame CPM
Investment banks have reported billions of dollars in leveraged loan and subprime-related writedowns in the third and fourth quarters of last year. Some people argue that credit portfolio managers had a duty to help prevent those losses. Did credit portfolio management fail? Duncan Wood reports
As the banking industry tries to digest the roughly $120 billion in losses suffered on subprime-linked securities to date, an argument is brewing about how much blame should be attached to banks' credit portfolio management (CPM) functions, and the lessons - if any - those functions can take from the crisis. On one hand, portfolio managers themselves point out the majority of the losses came from swingeing writedowns on positions built by trading desks, which are not within their purview
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