01.23.08

Reporting of effective Key Risk Indicators

Posted in analytics, bank, business intelligence, data mining, edm, operational risk, risk tagged KRI, Key Risk Indicator, edm, Decision Management, operational risk, Forecast, Cause, Effect at 8:32 pm by Martin Bloemendal

Introduction

A reporting system of key risk indicators must provide current operational risk insight to business management. This insight enables management to control the operation in such a manner that an optimal balance is accomplished between risk effects and the measures that are taken to minimise these risk effects. A newly introduced reporting system will often result in increased risk awareness, where limited awareness was before the introduction of the reporting system.

Key risk effects

Typically businesses focus mostly on key risk effects. Examples of these key risk effects are:

Decreasing profit/ increasing costs
Higher required value of economic capital
Amount of complaints the business received in a given period
Audit findings

Reporting of key risk effects is the baseline of operational risk and should also get primary focus in a KRI reporting system. The key risk effects clarify operational results over a given period. They also provide input to any future activities that influence the key risk effect. Future activities can also be invented for the sole purpose of influencing the risk effect. Note that the influence of adequate risk reporting can be at strategic, tactical and operational level. See the following examples:

Strategic: poor insight in risk leads to higher allocation of economical capital imposed by the regulator.
Tactical: relatively high operational loss on a specific product, may lead to alteration or even cancellation of that product.
Operational: an increased amount of external complaints will motivate an operational manager to increase focus on client friendliness.

To ensure all risk effects get the desired focus of management, objectives can be agreed on for these key risk effects. The nature of these objectives will differ per department. For example focus of supporting departments is on costs where sales departments focus on margins. Objectives should be included in personal performance contracts. Management must decide what to reward when defining objectives and related performance contracts. Management could reward positive results and/or negative side effects and/or indicators the results could have been better. For example a manager of a region can be rewarded for realising a target profit of 1.000.000 Euro. But should also be taken into account that the number of complaints of his customers doubled? Should be taken into account that by an operational human error caused by a bad procedure his business lost 200.000 Euro (despite the fact he still realised his profit target)?

Risk causes

When operational risk effects get the desired attention by the business, it only should be a question of time before the business will look at the operational risk department for help on how to influence these key risk effects. To handle this request, operational risk must bring KRI reporting to the next level. Operational risk needs to report on causes of key risk effects. The easy way to do this would be to work on assumptions. A logical assumption would be that the number of resources in a bank shop influences the service level and therefore the number of complaints at that bank shop. The number of resources is therefore a KRI and should be included in the reporting to management.However, is this influence actually there and if so, to what extent does it actually influence the number of complaints? What is the most efficient value of resources regarding the risk of external complaints? Another, even more complex, question would be what the influence is of the number of resources to other key risk effects? All these questions lead us to the ´hard way´ of answering the question on how to influence the key risk effects. That is by providing KRI´s that have a proven explicit statistical relationship to a key risk effect. When a clear relationship is recognised in the past, we have some reason to believe history repeats and it happens again. ´Some’ reason, since even when we can prove a relationship in the past, we often cannot guarantee it in the future. But still, history does tend to repeat itself and offering estimates is still a whole lot better than offering nothing at all. This is obviously no argument to ignore common sense. When for any reason a statistical relationship is not proven, but common sense dictates there is a relationship, it wouldn’t make sense to exclude the KRI from business reporting.

Control measures

Now the business is provided with current info on key risk effects and its causes. The business will start implementing measures using their brand new information on KRI´s. To control for example the number of available resources, management could decide to increase the number and height of bonuses to stimulate their employees to put in more hours. The key question of course will be ´does this have any effect´. Again the answers must come from statistics. We could assume using common sense that employees do put in more hours when the reward goes up, but are then accepting a very realistic risk this assumption might be completely false. The only assessments on the effectiveness on measures that have any value at all must be based on facts. Therefore the operational data on the measures must be analysed. Only when a statistical relation with a key risk effect is proven, the measure should be included in reporting to management. From that point on the measure should be maintained as an effective control measure for that particular key risk effect.

Gathering data

The described approach focuses on using statistics to prove and define relationships. This approach only works with a certain volume of facts, so it will not suit the smallest companies that do only have small volumes of operational data. For the larger companies it will only work when the company recognises the need to record a broad range of operational facts in e.g. a data warehouse. To really gain knowledge on what causes the most significant risk effects one must be prepare to start gathering data. Data must be gathered on all possible relevant domains. This without knowing and specifying exactly what information are (assumed) causes to risk effects. This approach allows analysts to think out of the box and use their statistical techniques in unexplored territories. They might just discover sales drops are influenced mostly by the weather….

Summary

To summarise, the key elements for a successful KRI implementation are:

To increase focus on operational risk of management by including key risk effects in their performance contracts.
The basis of reporting must be set in accurate current reporting of the key risk effects.
As a result of statistical analysis, indicators/ causes of the key risk effects are included in reporting.
Business management implements control measures to influence the key risk effects. Reporting must include the effectiveness of these control measures.
Finally, to make all this possible the business must be prepared to invest in the recording of a broad range of operational data.

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01.20.08

Update subprime bankparade X.

Posted in bank, credit risk, enterprise risk, liquidity risk, operational risk, risk tagged aig, bearn, boa, bofa, cdo, citi, countrywide, deutsche bank, freddie mac, hsbc, liquidity, list of writeoffs, mbs, merrill, mgic, morgan, rabo, radian, rbs, SIV, subprime, swiss, tango, ubs, wachovia, write off at 2:34 pm by peter@riskfriends.net

This week the banks published some impressing losses. Different banks with varying results. Countrywide has been taken over by Bank of America. This isn’t a big surprise. Looking back you can see many Enron similarities the last six months. One man running the company and not surrounded by managers who dare to oppose. The last six months Countrywide was also making news resulting from unethical behavior. When you review the list of news items from Countrywide with that from Merrill there is a shocking resemblance. One exception, the boss of Countrywide stayed until the end.

:: :: :: :: :: :: :: :: :: ::

*Date*	*Organization*	*Subprime news*
Jan17	MGIC	Dropped 76% in value, capital issues, bond insurer.
Jan16	Countrywide	Bank of America take over $4.1 billion investment
Jan16	Merrill Lynch	$ 9.8 billion loss, write down $14.1
Jan16	Wells Fargo	$ 0.6 billion write off in total for 2007, $1.4 billion provisioned, still making profit and able to provide reliable forecasts
Jan16	JPMorgan	$1.3 billion write down, profit drops 34%
Jan15	Merrill Lynch	$ 6.6 billion cash raised issueing preferred shares
Jan15	Citi	$ 9.8 billion loss, $18.4 billion write down, cutting 4200 jobs, 41% drop in dividend, acquiring $14 billion cash
Jan14	Merrill Lynch	Finra investigating possible front running
Jan11	Merrill Lynch	$15 billion write down expected
Jan10	Countrywide	Foreclosures doubled to 1.4 percent, late payments 7.6 percent from 4.3 percent
Jan10	Bear Stearns	Hedge fund Bear Stearns Asset-Backed Securities closed down
Jan10	ECB	Another $20 billion injection
Jan08	Bear Stearns	CEO James Cayne goner.
Jan08	Countrywide	Forged documents, hmmm Countrywide is really special
Jan07	CIBC	CRO and head whole sale step down following a $ 10 billion subprime exposure
Jan05	Huntington	$ 0.25 billion write off, 1 billion restructured
Jan04	Merrill Lynch	Accused from hiding losses while merger was pending
*Jan03*	State Street	$ 0.28 billion charge and $ 0.68 provisioning legal claims.
*Dec24*	Merrill Lynch	$ 7.5 billion acquired selling shares 13% below market value.
*Dec21*	Canada	Restructured $33 billion swappin short term to long term.
*Dec21*	FED	Fed guarantees unlimited relieve via biweekly Term Auction Facility (TAF).
*Dec20*	MBIA	Bonds insurers $ 31 billion exposure and rating concerns reported.
*Dec20*	Credit agricole	$ 3.5 billion write down, 40 % related to ACA.
*Dec20*	Bear Stearns	$ 0.85 billion loss and $ 1.9 billion write down failing a $ 1.2 billion estimation.
*Dec19*	CIBC	Worries about $1.75 billion “guaranteed” CDO’s. Lehman also makes statement about concerns regarding insurers ability to deliver.
*Dec19*	Citi	$ 3.5 billion cash acquired.
*Dec19*	Wachovia	$ 2 billion cash acquired.
*Dec19*	Goldman Sachs	$ 2.75 billion cash acquired.
*Dec19*	UBS	$ 3 billion cash acquired.
*Dec19*	JP Morgan Chase	$ 3 billion cash acquired.
*Dec19*	Morgan Stanley	$ 9.4 billion write down, $5 billion capital injection from Chinese investor. Although the write down was 3 times the amount foreseen by Morgan, investors are trusting management.
*Dec19*	FGIC	Bond insurer on Fitch watch list, capital adequacy at risk due to exposure SF CDO and RMBS. $1 billion short for an AAA rating.
*Dec18*	ECB	Unlimited funds made available to ease credit crunch at below market rates. Action follows on $40 billion coordinated injection by the Fed, ECB, BoE,BoC, Swiss national bank.
*Dec17*	Centro	76 percent drop in market capitalization, funding problems for property trusts.
*Dec14*	Lehman	Only a 12 percent profit drop in 4^th quarter,only $ 0.83 billion write off.
*Dec14*	Citi	Citi’s senior debt rating to Aa3 from Aa2 and lowered the Bank Financial Strength Rating of Citibank NA to B from A-. Citibank’s rating for long-term deposits and senior debt was lowered to Aa1 from Aaa.
*Dec14*	Citi	$49 billion added to balance sheet (SIV)
*Dec12*	Citi	$15 billion downgrade SIV
*Dec 12*	Lehman	12%profit drop, no write offs,no closure of SIV’s
*Dec 10*	Fannie Mae	Expects $5.5 billion loss next few years.
*Dec 10*	Freddie Mac	Expects $7.5 billion loss next few years.
*Dec 10*	BoA	Closes investment fund, value of assets dropped from $40 billion to $12 billion in a few months.
*Dec 10*	Washington Mutual	Closing 60% of home loan centres, 3000 jobs lost, closure of subprime and investment broker unit, saleof $3.7 billion preferred stock and 73% cut of dividend.
*Dec 10*	Citi	Take over speculations are starting up.
*Dec 10*	UBS	$10 billion write off announced. Capital ratio’s managed via $ 12 billion capital attractions from Singapore and the middle east.
*Dec 6*	Rabo	Adds $7.6 billion to its balance sheet after selling half of the assets from Tango Finance.
*Dec 6*	Citi	Moody’s downgrades 52 tranches or groups of bonds issued by the mortgage unit
*Dec 6*	RBS	$2.6 billion and $ 0.6 ABNAMRO write off beating market expectations.
*Dec 6*	Local government	Various states and cities report impact from degraded SIV’s. Panic resulting in withdrawal of investments resulting in liquidity problems. Reported were Florida, Connecticut, Montana and some cities in Scandinavia.
*Dec 5*	Standared chartered	Adding $ 1.7 billion of whistlejacket SIV to its balance
*Dec 3*	WestLB	German bank guarantees $36 billion invested in SIV’s
*Dec 3*	H&R Block	$ 0.4 billion write off, closing Option One, 600 jobs lost. Effort to sell unit failed.
*Dec 3*	RBS	$ 4 billion expected.
*Dec 1*	Morgan Stanley	CEO Cruz leaves
*Nov29*	Terra securities	Norwegian brokerage bankrupt,Citi connection.
*Nov29*	BoA	$ 1 billion write off Countrywide investment
*Nov29*	Florida	$ 8 billion run on the investment fund
*Nov29*	IKB	$ 9 billion rescue costs provided by German banks.
*Nov28*	Bear Stearns	1500 jobs in total lost, about 10% of work force.
*Nov28*	Freddie Mac	$ 6 billion sale of preferred stocks, dividend reduction of 50 percent
*Nov27*	Citi	$ 7.5 billion sale .
*Nov26*	GMAC	$ 1.6 billion so far and more to come.
*Nov26*	Citi	45.000 jobs at risk in addition to previously announced 17.000 jobs. Almost 20% staff reduction this year.
*Nov26*	JP Morgan	100 jobs gone and CRO replaced
*Nov26*	HSBC	$ 35 billion injection to protect SIV’s.
*Nov23*	News	Delinquency rates rising for real estate and credit card
*Nov22*	News	FSA sees $11 billion exposure for Japanese banks
*Nov21*	News	Fitch downgrades $30 billion CDO’s.
*Nov21*	MGIC	SEC inquiries, restructuring via C-BASS $467 million . $ 0.5 billion difference with last years 3rd quarter results.
*Nov21*	Radian	SEC inquiries, restructuring via C-BASS $467 million and selling service units to raise money. Almost $0.8 billion difference with last years 3rd quarter results.
*Nov21*	AIG	Derivative lawsuit started,accusations of concealing information and personally selling shares.
*Nov21*	Countrywide	Denying bankruptcy threats.
*Nov20*	News	Insured CDO’s at risk due to possible downgrade of insurance companies resulting in inability to make termination payments and effectively wipe out these insurers and subsequently more write offs by banks.
*Nov20*	Citi	Predicted $15 billion write offs next 6 months, downgraded
*Nov20*	Countrywide	Liquidity concerns, signs of bankruptcy
*Nov20*	Freddie Mac	$ 2 billion write off, liquidity problems
*Nov20*	Swiss re	$ 1 billion write off
*Nov16*	Citi	$ 11 billion write offexpected in 4th quarter
*Nov16*	News	Banks reassuring investors,IMF and OECD issue warnings.
*Nov16*	Novastar financial	$ 0.4 billion write off,probably expelled from NYSE
*Nov16*	UBS	$ 7 billion write off.expected in 4th quarter
*Nov15*	Barclays	$ 2.7 billion write off.
*Nov14*	Bear Stearns	$ 1.2 billion write off.
*Nov13*	BoA	$ 3.3 billion write off.
*Nov13*	HSBC	$ 3.4 billion write off.
*Nov13*	News	$ 3 billion exposure for director-and-officer insurances, claims resulting from lawsuits.
*Nov13*	RBC	$ 0.4 billion write off.
*Nov12*	Blackstone	$ 0.8 billion write off
*Nov12*	Citi	$ 25 billion exposure resulting from liquidity puts, survival concerns.
*Nov12*	Etrade	$ 3 billion exposure and ananalyst report resulted in a 60% price drop of shares and concerns about going bankrupt
*Nov12*	Metlife	Insurance company with $ 91.3 billion mbs exposure
*Nov12*	Principal Financial group	Insurance company with $ 12.3 billion mbs exposure
*Nov 9*	CIBC	Canadians reporting $ 0.5 billion write offs, more Canadians to follow.
*Nov 9*	HSBC	Another 120 jobs in addition to the 750 reported in August are lost
*Nov 9*	JP Morgan	4th quarter warnings, exposure $ 8 billion.
*Nov 9*	Wachovia	$ 1.6 billion subprime loss
*Nov 8*	Merrill	SEC starts investigation investments
*Nov 8*	Morgan Stanley	$ 3.7 billion subprime write off
*Nov 8*	News	RBS expects another $250 to $500 billion write offs in level 3 assets in addition to subprime write offs
*Nov7*	Bear Stearns	Expected write offs 4th quarter $3.9 according to CreditSights
*Nov7*	BofA	Expected write offs another $3 to 6 billion, according to Deutsche Bank
*Nov7*	Citi	Shareholders lawsuits
*Nov7*	Commerzbank	$337 million write off
*Nov7*	Goldman	Expected write offs 4th quarter $5 according to CreditSights
*Nov7*	Lehman	Expected write offs 4th quarter $3.9 according to CreditSights
*Nov7*	Merrill	Expected write offs 4th quarter another $9.4 according to CreditSights
*Nov7*	Morgan Stanley	Expected write offs another $4 to 6 billion, according to Deutsche Bank
*Nov7*	News	Level 3 assets concerns, $400 billion downgrade resulting from adjusted ratings.
*Nov5*	Market news	Asian markets drop sharply (5%)
*Nov 3*	Bear Stearns	CEO accused of inappropriate conduct
*Nov 3*	Citigroup	Write off $ 11 billion in addition of the $ 6.8 billion reported 3 weeks ago.
*Nov 3*	Merrill	Merril not aware of inappropriate transactions, not denying it.
*Nov 2*	Credit Suisse`	2.2 billion Swiss francs write down
*Nov 2*	First American	Washington Mutual Accused for inflating mortgage appraisals
*Nov 2*	UBS	Another $ 8 billion expected in addition to the $3.8 billion
*Nov 1*	Citi	Downgrade $30 billion expected loss
*Nov 1*	Deutsche bank	3,2 billion loss, but in control, appraised
*Nov 1*	Federal reserve	41 billion injection
*Nov 1*	State Street	$2,6 billion loss, law suits wrong investment advice
*Oct 31*	General Electric	1 billion at stake, mortgage staff cuts
*Oct 31*	Merrill	Lawsuits by shareholders
*Oct 31*	UBS	3,68 billion loss in francs
*Oct 30*	Countrywide	Offering cds at highest rates
*Oct 29*	Bank of China	$7,9 billion mortgage write off
*Oct 29*	HSBC	Sells mortgage unit, $795 million
*Oct 29*	Market news	Double digit price drop California housing
*Oct 29*	Market news	80% price drop mortgage backed securities
*Oct 29*	Perpetual	Cut first-half profit forecast by 5%, spooked investors
*Oct 28*	Countrywide	Analysts stating CEO is telling lies
*Oct 28*	Fremont Inv & Loan	Approved fast foreclosures
*Oct 28*	Market news	Foreclosures within 11 to 14 months
*Oct 28*	New Century	Fin Corp Approved fast foreclosures
*Oct 28*	WMC Mortgage	Approved fast foreclosures
*Oct 27*	Countrywide	CEO accused for dumping stocks
*Oct 26*	Countrywide	Largest home lender, $1.2 billion loss
*Oct 26*	Moody’s	Cut the ratings of collateralized debt obligations tied to $33 billion of subprime mortgage securities
*Oct 26*	S&P	Lawsuits, wrong rating mortgage backed securities, conflict of interests, rating related to fees
*Oct 25*	AIG	Analysts predicts $9,8 billion loss
*Oct 24*	News	$400 billion write off prognoses
*Oct 22*	BoA	$750 million loss, provisions up $1,5 billion, profit drop with 94%, 3000 jobs lost, blaming risk mgmt.

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01.07.08

Update subprime bankparade IX with a big smile!

Posted in bank, business risk, credit risk, enterprise risk, liquidity risk, operational risk tagged aig, bearn, boa, bofa, cdo, citi, countrywide, deutsche bank, freddie mac, hsbc, liquidity, mbs, merrill, mgic, morgan, rabo, radian, rbs, SIV, subprime, swiss, tango, ubs, wachovia, write off at 6:21 pm by peter@riskfriends.net

I’ve been following subprime for some time now. To freshen things up I’ve included a link to youtube
with a really funny and simple explanation what the subprime crisis is all about.

Tracking impact of the subprime crisis remains interesting, so I’ve updated the list of reported impact of and reactions to subprime problems. What at this stage is not very clear what costs central banks make to avoid a systemic crisis and who in the end will have to pay for this. The FED and the European Central Bank have been throwing in huge amounts of dollars and euros to avoid a financial and economic crisis. I find it difficult to believe this will work in the US where the problems are between home owners and banks. In Europe consumers are probably somehow better protected. European banks have also been impacted, but not to the extend (with the exception of UBS) as American banks.

I expect banks better prepare to be able to deliver high quality near real time risk reporting. Central banks, rating agencies, analysts and investors should and probably will demand more transparency with regard to risk transfer. This will have to be accompanied with public insight in what scenario’s have been covered. Another question that needs to be answered is how “guarantees” are priced. Risks are transferred to insurers, but the backing liquidity is by far not enough to really cover major events. The value of this “insurance” is severely overestimated in the price of funds and the rating of agencies. Banks owning “insured” investments are rewarded with reduced capital requirements. Banks, insurers, rating agencies and regulators all failed to identify the shortcomings in the identification and thus mitigation of the emerged risks.

This week a Dutch investigation executed by an organization of home owners proved that also in the Netherlands mortgages are sold without informing buyers properly. Selling higher mortgages than customers can afford is also common practice in the Netherlands. Another interesting research showed different approaches consumers take when making important financial decisions. This research showed that more than 25 percent of buyers are not interested in the long term impact of their decision. They find the short term convenience much more important and totally rely on the recommendation of the sales person. Dutch regulators are increasing pressure to improve the quality of information provided to potential buyers. For a large segment of buyers this will not result in better buying decisions.

And here you find the list with the addtions of the last few weeks. Although this list is limited to banks it is clear that insurers, news papers, real estate inveztors and home builders are impacted also.
:: :: :: :: :: :: :: :: :: ::

*Date*	*Organization*	*Subprime news*
*Jan03*	State Street	$ `0.28 billion charge and $ 0.68 provisioning legal claims.
*Dec24*	Merrill Lynch	$ 7.5 billion acquired selling shares 13% below market value.
*Dec21*	Canada	Restructured $33 billion swappin short term to long term.
*Dec21*	FED	Fed guarantees unlimited relieve via biweekly Term Auction Facility (TAF).
*Dec20*	MBIA	Bonds insurers $ 31 billion exposure and rating concerns reported.
*Dec20*	Credit agricole	$ 3.5 billion write down, 40 % related to ACA.
*Dec20*	Bear Stearns	$ 0.85 billion loss and $ 1.9 billion write down failing a $ 1.2 billion estimation.
*Dec19*	CIBC	Worries about $1.75 billion “guaranteed” CDO’s. Lehman also makes statement about concerns regarding insurers ability to deliver.
*Dec19*	Citi	$ 3.5 billion cash acquired.
*Dec19*	Wachovia	$ 2 billion cash acquired.
*Dec19*	Goldman Sachs	$ 2.75 billion cash acquired.
*Dec19*	UBS	$ 3 billion cash acquired.
*Dec19*	JP Morgan Chase	$ 3 billion cash acquired.
*Dec19*	Morgan Stanley	$ 9.4 billion write down, $5 billion capital injection from Chinese investor. Although the write down was 3 times the amount foreseen by Morgan, investors are trusting management.
*Dec19*	FGIC	Bond insurer on Fitch watch list, capital adequacy at risk due to exposure SF CDO and RMBS. $1 billion short for an AAA rating.
*Dec18*	ECB	Unlimited funds made available to ease credit crunch at below market rates. Action follows on $40 billion coordinated injection by the Fed, ECB, BoE,BoC, Swiss national bank.
*Dec17*	Centro	76 percent drop in market capitalization, funding problems for property trusts.
*Dec14*	Lehman	Only a 12 percent profit drop in 4^th quarter,only $ 0.83 billion write off.
*Dec14*	Citi	Citi’s senior debt rating to Aa3 from Aa2 and lowered the Bank Financial Strength Rating of Citibank NA to B from A-. Citibank’s rating for long-term deposits and senior debt was lowered to Aa1 from Aaa.
*Dec14*	Citi	$49 billion added to balance sheet (SIV)
*Dec12*	Citi	$15 billion downgrade SIV
*Dec 12*	Lehman	12%profit drop, no write offs,no closure of SIV’s
*Dec 10*	Fannie Mae	Expects $5.5 billion loss next few years.
*Dec 10*	Freddie Mac	Expects $7.5 billion loss next few years.
*Dec 10*	BoA	Closes investment fund, value of assets dropped from $40 billion to $12 billion in a few months.
*Dec 10*	Washington Mutual	Closing 60% of home loan centres, 3000 jobs lost, closure of subprime and investment broker unit, saleof $3.7 billion preferred stock and 73% cut of dividend.
*Dec 10*	Citi	Take over speculations are starting up.
*Dec 10*	UBS	$10 billion write off announced. Capital ratio’s managed via $ 12 billion capital attractions from Singapore and the middle east.
*Dec 6*	Rabo	Adds $7.6 billion to its balance sheet after selling half of the assets from Tango Finance.
*Dec 6*	Citi	Moody’s downgrades 52 tranches or groups of bonds issued by the mortgage unit
*Dec 6*	RBS	$2.6 billion and $ 0.6 ABNAMRO write off beating market expectations.
*Dec 6*	Local government	Various states and cities report impact from degraded SIV’s. Panic resulting in withdrawal of investments resulting in liquidity problems. Reported were Florida, Connecticut, Montana and some cities in Scandinavia.
*Dec 5*	Standared chartered	Adding $ 1.7 billion of whistlejacket SIV to its balance
*Dec 3*	WestLB	German bank guarantees $36 billion invested in SIV’s
*Dec 3*	H&R Block	$ 0.4 billion write off, closing Option One, 600 jobs lost. Effort to sell unit failed.
*Dec 3*	RBS	$ 4 billion expected.
*Dec 1*	Morgan Stanley	CEO Cruz leaves
*Nov29*	Terra securities	Norwegian brokerage bankrupt,Citi connection.
*Nov29*	BoA	$ 1 billion write off Countrywide investment
*Nov29*	Florida	$ 8 billion run on the investment fund
*Nov29*	IKB	$ 9 billion rescue costs provided by German banks.
*Nov28*	Bear Stearns	1500 jobs in total lost, about 10% of work force.
*Nov28*	Freddie Mac	$ 6 billion sale of preferred stocks, dividend reduction of 50 percent
*Nov27*	Citi	$ 7.5 billion sale .
*Nov26*	GMAC	$ 1.6 billion so far and more to come.
*Nov26*	Citi	45.000 jobs at risk in addition to previously announced 17.000 jobs. Almost 20% staff reduction this year.
*Nov26*	JP Morgan	100 jobs gone and CRO replaced
*Nov26*	HSBC	$ 35 billion injection to protect SIV’s.
*Nov23*	News	Delinquency rates rising for real estate and credit card
*Nov22*	News	FSA sees $11 billion exposure for Japanese banks
*Nov21*	News	Fitch downgrades $30 billion CDO’s.
*Nov21*	MGIC	SEC inquiries, restructuring via C-BASS $467 million . $ 0.5 billion difference with last years 3rd quarter results.
*Nov21*	Radian	SEC inquiries, restructuring via C-BASS $467 million and selling service units to raise money. Almost $0.8 billion difference with last years 3rd quarter results.
*Nov21*	AIG	Derivative lawsuit started,accusations of concealing information and personally selling shares.
*Nov21*	Countrywide	Denying bankruptcy threats.
*Nov20*	News	Insured CDO’s at risk due to possible downgrade of insurance companies resulting in inability to make termination payments and effectively wipe out these insurers and subsequently more write offs by banks.
*Nov20*	Citi	Predicted $15 billion write offs next 6 months, downgraded
*Nov20*	Countrywide	Liquidity concerns, signs of bankruptcy
*Nov20*	Freddie Mac	$ 2 billion write off, liquidity problems
*Nov20*	Swiss re	$ 1 billion write off
*Nov16*	Citi	$ 11 billion write offexpected in 4th quarter
*Nov16*	News	Banks reassuring investors,IMF and OECD issue warnings.
*Nov16*	Novastar financial	$ 0.4 billion write off,probably expelled from NYSE
*Nov16*	UBS	$ 7 billion write off.expected in 4th quarter
*Nov15*	Barclays	$ 2.7 billion write off.
*Nov14*	Bear Stearns	$ 1.2 billion write off.
*Nov13*	BoA	$ 3.3 billion write off.
*Nov13*	HSBC	$ 3.4 billion write off.
*Nov13*	News	$ 3 billion exposure for director-and-officer insurances, claims resulting from lawsuits.
*Nov13*	RBC	$ 0.4 billion write off.
*Nov12*	Blackstone	$ 0.8 billion write off
*Nov12*	Citi	$ 25 billion exposure resulting from liquidity puts, survival concerns.
*Nov12*	Etrade	$ 3 billion exposure and ananalyst report resulted in a 60% price drop of shares and concerns about going bankrupt
*Nov12*	Metlife	Insurance company with $ 91.3 billion mbs exposure
*Nov12*	Principal Financial group	Insurance company with $ 12.3 billion mbs exposure
*Nov 9*	CIBC	Canadians reporting $ 0.5 billion write offs, more Canadians to follow.
*Nov 9*	HSBC	Another 120 jobs in addition to the 750 reported in August are lost
*Nov 9*	JP Morgan	4th quarter warnings, exposure $ 8 billion.
*Nov 9*	Wachovia	$ 1.6 billion subprime loss
*Nov 8*	Merrill	SEC starts investigation investments
*Nov 8*	Morgan Stanley	$ 3.7 billion subprime write off
*Nov 8*	News	RBS expects another $250 to $500 billion write offs in level 3 assets in addition to subprime write offs
*Nov7*	Bear Stearns	Expected write offs 4th quarter $3.9 according to CreditSights
*Nov7*	BofA	Expected write offs another $3 to 6 billion, according to Deutsche Bank
*Nov7*	Citi	Shareholders lawsuits
*Nov7*	Commerzbank	$337 million write off
*Nov7*	Goldman	Expected write offs 4th quarter $5 according to CreditSights
*Nov7*	Lehman	Expected write offs 4th quarter $3.9 according to CreditSights
*Nov7*	Merrill	Expected write offs 4th quarter another $9.4 according to CreditSights
*Nov7*	Morgan Stanley	Expected write offs another $4 to 6 billion, according to Deutsche Bank
*Nov7*	News	Level 3 assets concerns, $400 billion downgrade resulting from adjusted ratings.
*Nov5*	Market news	Asian markets drop sharply (5%)
*Nov 3*	Bear Stearns	CEO accused of inappropriate conduct
*Nov 3*	Citigroup	Write off $ 11 billion in addition of the $ 6.8 billion reported 3 weeks ago.
*Nov 3*	Merrill	Merril not aware of inappropriate transactions, not denying it.
*Nov 2*	Credit Suisse`	2.2 billion Swiss francs write down
*Nov 2*	First American	Washington Mutual Accused for inflating mortgage appraisals
*Nov 2*	UBS	Another $ 8 billion expected in addition to the $3.8 billion
*Nov 1*	Citi	Downgrade $30 billion expected loss
*Nov 1*	Deutsche bank	3,2 billion loss, but in control, appraised
*Nov 1*	Federal reserve	41 billion injection
*Nov 1*	State Street	$2,6 billion loss, law suits wrong investment advice
*Oct 31*	General Electric	1 billion at stake, mortgage staff cuts
*Oct 31*	Merrill	Lawsuits by shareholders
*Oct 31*	UBS	3,68 billion loss in francs
*Oct 30*	Countrywide	Offering cds at highest rates
*Oct 29*	Bank of China	$7,9 billion mortgage write off
*Oct 29*	HSBC	Sells mortgage unit, $795 million
*Oct 29*	Market news	Double digit price drop California housing
*Oct 29*	Market news	80% price drop mortgage backed securities
*Oct 29*	Perpetual	Cut first-half profit forecast by 5%, spooked investors
*Oct 28*	Countrywide	Analysts stating CEO is telling lies
*Oct 28*	Fremont Inv & Loan	Approved fast foreclosures
*Oct 28*	Market news	Foreclosures within 11 to 14 months
*Oct 28*	New Century	Fin Corp Approved fast foreclosures
*Oct 28*	WMC Mortgage	Approved fast foreclosures
*Oct 27*	Countrywide	CEO accused for dumping stocks
*Oct 26*	Countrywide	Largest home lender, $1.2 billion loss
*Oct 26*	Moody’s	Cut the ratings of collateralized debt obligations tied to $33 billion of subprime mortgage securities
*Oct 26*	S&P	Lawsuits, wrong rating mortgage backed securities, conflict of interests, rating related to fees
*Oct 25*	AIG	Analysts predicts $9,8 billion loss
*Oct 24*	News	$400 billion write off prognoses
*Oct 22*	BoA	$750 million loss, provisions up $1,5 billion, profit drop with 94%, 3000 jobs lost, blaming risk mgmt.

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01.23.08

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Update subprime bankparade IX with a big smile!

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