Risk-free Risk Taking

Posted on January 24, 2008 by Tim Greene

MBIA and Ambac apparently made underwriting mistakes in the process of backing various structured debt obligations (such as mortgage pools, SIVs, CDOs, etc.) that now are at risk of default. These insurers now face massive potential underwriting losses.

Rather than talking about increasing reserves, changes in underwriting practices, or, heaven forbid, insolvency - supervision - liquidation, the dialogue has turned to "bail out." See here and here.

It seems an ideal time to be an underwriter, as risks may be taken freely knowing that regulators are there to enforce non-market solutions when the losses mount.

TTG

Tags:
Trackbacks (0) Links to blogs that reference this article Trackback URL
http://www.globaltort.com/admin/trackback/186326
Comments (0) Read through and enter the discussion with the form at the end
Post A Comment / Question Use this form to add a comment to this entry.







Remember personal info?
Send To A Friend Use this form to send this entry to a friend via email.