Friday, December 12, 2008

Financial groups' problem assets hit $610 bln


There has been a sharp increase by over $600 billion dollars of hard to value asses during the third quarter of 2009. This isn't great news as it raises concerns over dangerous balance sheet practices that may be abounding throughout the funds market. People are worried about the cash securities so their going for the sweetest deal--

Level-three assets have risen all year for most banks as they have found it virtually impossible to sell mortgage-backed securities and collateralised debt obligations. "A lot of banks are saying: ‘I am going to move securities to level-three assets because I have more control over, and confidence in, the model used for their valuations'," said Gregg Berman, head of the risk management unit at Risk Metrics...

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