Spitzer probe threatens MBIA bond guarantees

Regulatory scrutiny of accounting practices at MBIA has put pressure on the monoline insurer’s triple-A rating, undermining its guarantees. Hardeep Dhillon reports

Investigations by New York attorney general Eliot Spitzer and US regulator the Securities & Exchange Commission into market abuses by the insurance industry have focused firmly on two of the industry giants, AIG and MBIA Insurance. Accounting irregularities at the two firms have made April another worrying month for insurance sector spreads and sentiment towards ratings.

MBIA overstated profits by $54 million and was forced to restate seven years of results based on incorrect accounting for two

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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