Bank of America in $5bn writedown
Bank becomes latest to suffer fallout from the sub-prime securities fallout
The Bank of America has announced $5bn (£2.5bn) in writedowns resulting from
sub-prime related securities.
The massive writedowns are the
latest
in a series of huge writedowns relating to the sub-prime mortgage collapse.
The bank said it planned to reduce its use of structured products.
It revealed trading account losses of $5.44bn which it says was driven by
large scale cutting down of collateralised debt obligations – groups of loans
packed into securities and repackaged for sale to investors – that it holds on
its balance sheet.
Wachovia, the fourth largest U.S. bank, also reported a $1.7bn writedown
yesterday, also as a result of the sub-prime problems
Further reading:
Further
writedowns expected for US banks