 Markets have been shaken by the sub-prime fallout |
Major bond insurer, MBIA, has posted its biggest ever loss for a three month period, hit by its exposure to the US sub-prime mortgage crisis. MBIA made a net loss of $2.3bn(�1.15bn) in the quarter ending 31 December. The year before it made a profit of $181m.
It is reeling from falls in value of US mortgage-backed debt, which firms like MBIA had offered guarantees.
There are now fears insurers will not be able to pay out, forcing banks to announce another big round of losses.
The deep problems facing bond insurers led Barclays Capital analysts to say that banks may need to raise as much as $143bn (�77bn) to weather the credit crisis.
Firms like MBIA are known as monolines, and are at the centre of the sub-prime crisis.
Their current difficulties are threatening to overshadow Wednesday's sharp US interest rate cut - designed to sooth financial markets.
At Wall Street close on Wednesday all three indexes in New York failed to end on a positive note.
One-Minute World News 
News services
E-mail this to a friend 
Printable version 
Bookmark with:
What are these?