Industry News

Losses at banking, securities firms widen as market continues decline

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Morgan Stanley has joined the ranks of Merrill Lynch and Citigroup in reporting billions of dollars in losses on subprime mortgage-related assets, which have declined in value as a result of continued market deterioration since August 2007. One of the highest-ranked securities firms by value, Morgan Stanley said late Wednesday that it lost $3.7 billion for the two months ended Oct. 31 on securities related to mortgages given to borrowers with spotty credit histories. The loss will cut fourth-quarter earnings by approximately $2.5 billion, the firm said, and warned that its exposures to losses related to subprime-related securities could continue into the quarter. "It is expected that market conditions will continue to evolve, and that the fair value of these exposures will frequently change and could further deteriorate. Given these anticipated fluctuations, Morgan Stanley does not intend to update this information until it announces its fourth quarter 2007 earnings in D...