09.10.2008 - SWFs bow out
Fron Business Standard: Once the knights in shining armour, Sovereign Wealth Funds (SWFs) appear to be taking the backseat in terms of rushing to save collapsing US and European banks. Perhaps this is the result of the huge drop they’ve seen in the value of their investments over the past year. According to the IMF, a total of $503bn (rose to $580bn by the end of September) was written down by banks and other financial institutions (such as insurance companies) by the end of August as compared to around $352bn that has been raised for recapitalisation. Interest rate spreads on the bonds issued by banks (typically, hybrid securities contain both an equity and debt component) have risen to 400 bps over US T-bills..... Full Article: Source