Les Jones

Economics > Not Just U.S. Mortgage Markets in Trouble

Housing Bubble Blog:

“South-west Sydney has been frequently pinpointed as the centre of mortgage stress following the deflation of the housing bubble late in 2003.”

The Associated Press. “Germany’s state-owned KfW development bank said Tuesday it has nearly doubled its risk shield for IKB Deutsche Industriebank AG, a lender battered by its exposure the U.S. subprime lending crisis.”

“KfW, which is IKB’s biggest shareholder, said it raised the risk shield by 2.3 billion euros, to 4.8 billion euros, ($3.4 billion to $7.1 billion) on the basis of new information regarding the valuation of risks covered by IKB’s Rhineland Funding investment vehicle and because of a ‘dramatic worsening’ of market conditions.”

The BBC News. “Algeria has suspended the first ever privatisation of a bank in the North African nation. The delay is the first sign that the US housing woes have reached Northern Africa. The finance ministry said that the sale would resume when the ‘impact of the mortgage crisis’ became clearer.”

From Bloomberg. “Canadian banks join their global peers in recording costs tied to credit markets. Bank of Montreal, the country’s fourth-biggest bank, said debt writedowns, trading losses and other costs cut profit by C$275 million.”