Special focus: Banking 2008 and beyond
Post-crunch litigation: Lawyers look for sub-prime suspects
A welter of sub-prime and credit crunch related lawsuits have been filed or are being prepared. There is little surprise, since it has such a plaintiff-friendly system, that the US is leading the way. Those with the deepest pockets are being targeted. Alex Chambers reports on the implications.
MORE THAN A year has passed since the credit bubble burst and the true scale of damage is still unknown. The banking landscape is transformed as the securitization market becomes a wasteland. Every quarter brings additional disappointment as banks announce new write-downs in their credit books. Furthermore, the economic implications are becoming apparent as growth slows in the US and Europe.
And yet the reckoning is not just a financial one: increasingly regulators and authorities are announcing initiatives and rules designed to prevent any recurrence. Another blow to those who were involved in the origination, packaging, structuring and sale of sub-prime mortgages, and derivatives thereof is the appearance of hundreds of lawsuits. It is now the full weight of the law – mostly in the US – that is about to weigh on the former participants in this business.