Email for jay brown with mac process3/10/2023 Monday's settlement leaves Societe Generale as the only bank still in that case. To survive, MBIA won approval in 2009 from New York's insurance regulator, now part of the state's Department of Financial Services, to split into a municipal bond insurer to underwrite new deals and a guarantor of structured finance products that would handle old claims.īut 18 banks objected, saying it would leave MBIA insolvent and unable to pay its mortgage-related claims. Short sellers such as hedge fund manager William Ackman argued MBIA lacked capital to cover structured finance losses. That backfired as MBIA lost its top credit ratings and banks sought to hold it liable for losses after the housing bubble burst. MBIA had long been in the sleepy business of guaranteeing municipal debt against default, but last decade it began guaranteeing riskier structured bonds, such as repackaged mortgage securities, in a bid to add revenue and profit. "It's probably a good deal all around," he added, reflecting that "MBIA obviously had a strong case and Bank of America had a strong negotiating position."
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