This time it’s an investment bank with problems. Swiss-based UBS announced a $10 billion writedown this week on subprime exposures. An injection of capital from investors in Singapore and the Middle East was also announced. UBS has also slammed on the brakes at its investment bank, where the problems originated. UBS has been the biggest casualty so far among major European banks of the meltdown in U.S. subprime mortgages. Some analysts continue to characterize subprime as loans made to people with poor credit histories. Others say lack of regualtory action and oversight transformed predatory lending into acceptable lending standards.
A recent article by Andrew Hurst has more details about problems at UBS.