Thursday, Jan 24, 2008
U.S, banks are being
FT: Banks pressed to bail-out bond insurers
US banks are under pressure from New York state’s insurance regulator to provide $15bn to support struggling bond insurers. Concern that rating agency downgrades of the insurers could force a fresh round of writedowns by banks, The banks still feel stung after a failed bail-out plan backed by the US Treasury under which they would have bought assets from SIVs. Some expressed scepticism that Mr Dinallo would be able to persuade banks to provide the funds. Concerns about the future of MBIA and Ambac grew last week when Fitch Ratings downgraded Ambac from triple-A to double-A. The business model of both companies depends on a top-level credit rating. The Fed, Treasury and SEC have set up at a group to examine risks to the financial system might arise from problems at the bond insurers
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