Of Special Interest
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
16th December 2011
Morgan Stanley $1.8bn writedown
Morgan Stanley and MBIA have settled their legal dispute over Credit Default Swaps relating to Mortgage Backed Securities. Morgan Stanley sought to claim $4bn from MBIA relating to a restructure linked to the failure to pay out on the insurance held and the MBIA counter suit that Morgan Stanley misrepresented the quality of the mortgages contained within the MBS, seeking $1.2bn. Morgan Stanley was also suing The New York Department of Financial Services for having agreed to the MBIA restructure. All suits are dropped and the MBS written off.
Morgan Stanley had reserved for the MBIA suit in full but not made any writedowns against the MBS. Accordingly it is forced to writedown in the current quarter the net amount of the two sums, $1.8bn, equal to approximately $1.2bn after tax. CEO James Gorman made the point that one advantage of the settlement was that it removed $4bn of the balance sheet hence boosting the capital rations.
MBIA has reached settlements with 13 of the 18 banks suing it to date.