Subprime fall-out The cost of insurance against credit defaults hit record levels on both sides of the Atlantic on Monday amid concerns that some investors were being forced to sell assets to cover losses on subprime mortgages.
Credit market dip
Investors rushed to buy contracts that would protect them against corporate credit defaults after it emerged that more European insitutions had suffered losses following the crisis in the US subprime mortgage market. IKB, a German lender specialising in providing credit to smaller companies, and Commerzbank, the country’s second-biggest bank, both warned they would be hit by losses from risky US home loans to borrowers with poor credit histories.
