This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7093464.stm
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Bank of America in sub-prime hit | Bank of America in sub-prime hit |
| (20 minutes later) | |
| Bank of America has revealed that it will have to write off $3bn (£1.4bn) of bad debts and warned that its losses could grow. | |
| It is to spend another $600m supporting some of its funds because the value of their investments is uncertain. | |
| But Bank of America said that it considered the potential losses to be "manageable". | |
| It is the latest bank to reveal losses as a result of investments linked to the US sub-prime home loans market. | |
| Sub-prime mortgages are offered to people with inferior credit records or unpredictable incomes. | |
| A vast number of these loans were dished out over the past few years when borrowing costs were cheaper and more affordable. | |
| But a steep rise in US interest rates over the past two years has resulted in many borrowers unable to pay these mortgage repayments, leadng to record defaults and foreclosures. | |
| It then turned out that the debt from sub-prime loans had been packaged together and sold to other banks around the world. | |
| Because the market for such debt has largely disappeared, banks are left holding debt to which it is almost impossible to attach a value. | |
| Citigroup has already said it will write down as much as $11bn and Morgan Stanley expects to write off up to $6bn before the end of the year. |