The correction
in the US mortgage market and the accompanying adjustment of risk pricing has
reverberated far and wide throughout the global capital markets, says a Standard
& Poor''s Ratings Services report titled, A Sub prime Hangover: Credit And
Liquidity Concerns Cloud The Broader US Mortgage Market. "Simply
put, risk aversion in the mortgage capital markets remains at an all-time high,
concern for the potential impact on other asset classes has escalated, and the
resulting liquidity crunch is affecting the pricing of all credit, not just mortgages
and MBS," said Standard & Poor''s credit analyst Victoria Wagner. According
to the report, this current credit cycle is one of the most challenging financial
institutions have ever faced. Until credit spreads and asset pricing fully recalibrate,
mortgage liquidity will be constrained. Rating
actions, if appropriate, will depend on the size and nature of the losses, the
permanency of these losses, and their impact on capital and future earnings.
also see : General
reports on Banks & Financial Institutions
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