In keeping with the old idea of how to win friends and influence enemies, subprime issues in the United States continue to effect other countries. We must remember that some of the biggest U.S. subprime lenders were not American banks. Consider HSBC, with losses in excess of $10 billion (USD). Granted, HSBC bought predatory lender Household International, but HSBC is headquartered in London. Investments in mortgage backed paper seemed to spread like cancer around the world, but some countries were more conservative. Here is what we see today in Japan:
Japanese megabank Mitsubishi UFJ Financial Group (MUFG) said Monday that its losses on US subprime loans soared by as much as six-fold over two months to $263 million dollars. Our chart of subprime losses by bank makes $236 million look small compared to others. Other Japanese banks have also reported exposure to problems in the US subprime loan market comprising borrowers with patchy credit histories. But their losses are believed to be less heavy than many of their foreign peers.