Borrowing Under a Securitization Structure (Photo credit: Wikipedia)
Diagram of the Subprime Mortgage Crisis (Photo credit: Wikipedia)
English: Each of the five largest investment banks took on greater risk leading up to the subprime crisis. This is summarized by their leverage ratio, which is the ratio of total debt to total equity. A higher ratio indicates more risk. From fiscal years 2003-2007, these firms significantly increased their leverage ratios. A ratio of 10-15 is more typical of a conservative bank. These firms had ratios closer to 30. (Photo credit: Wikipedia)
This article in the FT is worth a read. Check it out!
via RBS told to meet US fine from bonuses – FT.com.
Surely, it’s time to get rid of the investment banks from public ownership?
Hive off the investment banks, tart them up and then sell them to the highest bidder is the solution, in my view.