Bond Outlook [by bridport & cie, February 20th 2008]
| In normal times, news like the breach of Liechtenstein ’s banking secrecy to expose tax fraud at high level in Germany , and the nationalisation of a major bank in the UK would receive more attention in our Weekly. However, the ever widening wave of damage to financial markets from the US sub-prime market is really where we think it best to focus our readers’ attention. Two really big issues stand out this week: geographic widening of the crisis and monoline insurers. |
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| Take the first. For about one week Crédit Suisse was able to bask in the glory of having been so much wiser than UBS in limiting sub-prime damage. That glory has now evaporated, along with the CHF 3.1 billion of new announced sub-prime write-downs. Every major European country has its crisis-hit bank, but did both the major universal Swiss banks have to combine their forces to tarnish the reputation of the entire Swiss banking industry? In France , Crédit Agricole is also moving towards announcing sub-prime write-offs, setting a new French record. |