Morgan Stanley has been forced to book a $940m (£470m) hit to revenues in its accounts after revealing its exposure to sub-prime debt securitisations in third quarter numbers revealed today.
Reporting a 7% fall in total revenues for Q3 from $1.5bn in Q2 to $1.4bn, the US investment bank said: '…trading included losses of approximately $940m due to the marking to market of loans as well as closed and pipeline commitments. The markdowns reflect the illiquidity created by current market conditions.'
Morgan Stanley's write-down disclosures follow Q3 numbers released by Lehman Brothers yesterday, which showed that Lehman had taken a $700m hit on sub-prime assets.
Tomorrow the other giant investment banks Goldman Sachs and Bear Stearns release their Q3 numbers.
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