After weeks of pretending otherwise, it’s becoming obvious the bond insurers can’t be bailed out. Both the numbers involved and the risk are too high for that.
Some major U.S. banks are saying they are prepared for this, but what of smaller banks, pension funds, state and municipal accounts, and the like? Many of them do not have the resources to withstand the big financial hits that will come when bond insurers get downgraded.
Deutsche Bank CEO: Bond insurer downgrade will create debt “tsunami”