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Banks' credit-crisis write-downs top the half-trillion mark

August 12, 2008 |  2:20 pm

Now $500 billion -- and counting.

That’s Bloomberg’s tally of the credit write-downs that investment banks and commercial banks worldwide have taken since the subprime mortgage debacle began to unfold early in 2007.

The total reached $501 billion today after Swiss financial giant UBS said it wrote off another $5.1 billion tied to U.S. mortgage-backed securities and $900 million to cover its buyback of so-called auction-rate debt securities held by clients.

Bloomberg’s tally includes losses the banks have recorded on their subprime-related bond holdings and on other securities that have been marked down in value as the credit crisis has deepened.

Bankrepossign The total of write-downs has ballooned from $218 billion just since the end of last year. Citigroup Inc. ranks No. 1 with accumulated write-downs, at $55.1 billion, according to Bloomberg. Merrill Lynch & Co. is No. 2, with $51.8 billion. UBS is third with $44.2 billion.

And it doesn’t look at all like we’ve peaked. Shares of JPMorgan Chase & Co. today plunged $3.97, or 9.5%, to $37.92, after the bank said in a regulatory filing that it has racked up $1.5 billion in additional losses on mortgage-backed bonds and other securities just since June 30, as market conditions "have substantially deteriorated."

Through June 30 JPMorgan’s accumulated write-downs totaled $14.3 billion -- so it had been faring better than many of its major peers.

JPMorgan’s warning helped drag most financial stocks lower today. The financial-sector index of the Standard & Poor’s 500 index plunged 5.2%, its steepest loss since it dropped 6.7% on July 24. The Dow Jones industrial average dropped 139.88 points, or 1.2%, to 11,642.47.