Mortgage mess losses top $230 billion, and counting
A billion here, a billion there: Bloomberg News’ latest tally of total asset write-downs and credit losses at big banks and securities firms over the last 15 months is up to $232 billion.
The total jumped today after European banks UBS and Deutsche Bank announced write-downs of $19 billion and $4 billion, respectively.
To put the number in perspective, losing $232 billion is the equivalent of wiping out a multinational company the size of Procter & Gamble Co. (as measured by its stock market value).
Or eliminating Coca-Cola Co., McDonald’s Corp. and Charles Schwab Corp. all at once.
As you’d expect, most of the bank and brokerage write-downs and credit losses are against mortgage-related debt.
A write-down means a bank or brokerage has marked down the value of debt it owns to reflect new market realities. A credit loss can include charge-offs for loans in default or reserves set aside for loans expected to go bad.
The five financial companies with the largest write-downs and credit losses to date, by Bloomberg’s tally: UBS, with $38 billion; Merrill Lynch & Co., $25.1 billion; Citigroup Inc., $23.9 billion; HSBC, $12.4 billion; and Morgan Stanley, $11.7 billion.
