Mortgage news

News, trends and analysis of the mortgage and credit market

Monday, September 10, 2007

For Bankers, Yet Another Credit Migraine

September 10 2007
Citigroup leads the banks at risk as demand dries up for a $400 billion market for off-balance-sheet investments. The credit crunch has big banks in a bind. Not only are they holding billions of dollars in buyout-related debt they may be unable to sell, but large hedge funds run by players such as Goldman Sachs (GS) and Bear Stearns (BSC) have been burned by bad bets on subprime mortgages. But wait, there's more bad news: Fears are mounting the banks may next be whacked by their Structured Investment Vehicles (SIVs), a relatively obscure market that has ceased functioning in recent weeks. Few outside the financial community know about it, but that could change quickly.


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