Downfall of a dynasty

Downfall of a dynasty

The last days of Ricardo Salgado and Banco Espírito Santo

Swimming not drowning

Swimming not drowning

Bond market has ability to adapt

Credit default swaps: Monolines face litigious and costly endgame

Any discussion of a CDS counterparty default has to include the monoline guarantors.


A bum wrap
Notional CDS bought from monolines 03 –2008 Write-down
Merrill Lynch $18.8bln $538mln (Q4 2007) and $800mln (Q1 2008)
Citi $10.5bln $1.5bln (Q1 2008)
CIBC $7.9bln $4.7bln
RBS $12bln $4.4bln
Crédit Agricole $9.9bln $3.9bln
UBS $24.6bln $2.6bln
Société Générale $11bln $1.6bln
Source: Standard & Poor’s

Credit default swaps: On dangerous ground

These firms have lurched from one downgrade to another as the implications emerge of their exposure not only to sub-prime ABS CDOs but more recently to guaranteed investment contract (GIC) funds. Any list of counterparties at risk of default has to include several big monoline names. "All monolines that have been significantly involved in structured credit will become effectively insolvent," is the bleak prognosis from Andrea Cicione at BNP Paribas.

What does this mean for their outstanding CDS? Most of...


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Final days of Ricardo Salgado and Banco Espírito Santo

Euromoney Pulse Survey: Renminbi’s internationalization continues apace
When BES collapsed earlier this year, markets briefly feared a return of the crisis to Portugal and to Europe. Even after the bank's bailout, investigators still pore over bank documents, transfers and deals, trying to make sense of Salgado’s last days battling to keep his empire afloat. The backstory is of an extraordinary decades-long rivalry between the country's two pre-eminent business families.