Bank monoline exposures creep up in second quarter
Second-quarter results brought continued anguish for many major dealers due to increasing counterparty risk posed by the biggest bond insurers.
Before the credit and liquidity crisis struck in August last year, monoline insurers underwrote billions of dollars of assets for dealers, including super-senior tranches of collateralised debt obligations of asset-backed securities (CDOs of ABSs). Laying off these exposures freed balance sheets so dealers could continue to originate new trades. But
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