Ratings cuts for MBIA and Ambac Financial Group could lead to multibillion-dollar losses on bond insurance for Citigroup, UBS AG and Merrill Lynch, an Oppenheimer & Co. analyst said. "The limited earnings potential of monolines poses a risk to the value of the insurance and hedges on the subprime-related securities provided to the banks and brokers," Meredith Whitney wrote. "The collateral damage could be in excess of an additional $10 billion."

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