Bad Times for Bankers
Three of the largest U.S. investment banks, Morgan Stanley, Merrill Lynch, and Goldman Sachs, had their credit ratings lowered by S&P on the concern that further writedowns lay ahead. Since the beginning of 2007, banks worldwide have written down some $387 billion and raised over $270 billion in new capital. Commercial banks also had a turbulent day with Wachovia's Chief Executive Ken Thompson ousted and Washington Mutual's Kerry Killinger stepping down from his position as chairman (he will retain his position as the CEO).
Snapshot asks, do you agree with the ratings agencies that financial institutions will face further trouble in 2008? Will it be less, more, or equal to trouble they faced in the past few months?
BNP Paribas - Financial Crisis: Banks in the Midstream
Bloomberg - Morgan Stanley, Merrill, Lehman Ratings Cut by S&P
Fitch Ratings - Securities Firms: 1Q08 Peer Data
Fitch Ratings - Subprime Mortgage‐Related Losses