Wednesday, Aug 08, 2007
So all OK? Well no. The knock-on effects on capital markets revenue in the third quarter could be severe, say DK. They have also excluded the investment banks’ exposure from their numbers.
FT.com: Subprime in Europe - who’s next?
Other banks should have limited exposure - unlike IKB’s bet to the tune of 12 times its equity on CDOs. There will be charges, say DK, but these should be treated as one-offs.
While remaining underweight on the capital markets banks, DK believes the recent selling of European banking stocks has now reached the point of over-reaction. The sector’s earnings multiple relative to the market is now 0.82 times, close to the low of the past five years and in line with that other crisis involving Russian bonds and a notorious hedge fund.
Posted by chris :-)) @ 03:36 PM (110 views) Add Comment
1 Comment
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1. Orwell said...
So Chris?
Who is next? I suspect it may be one of the bigger boys here but I have looked at David Smith's site and they seem to disagree.