Hedge funds dispute banks' subprime help

06/1/2007 | Financial Times (free content)

Moves by banks to assist delinquent mortgage borrowers are drawing the ire of hedge funds with an interest in related derivatives contracts. Hedge funds have recently profited from derivatives contracts that pay when bonds supported by subprime mortgages have problems. The funds fear that banks' support of delinquent borrowers is a way for them to avoid paying on derivatives contracts.

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