Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, November 27, 2007

HSBC Bails Out its SIVs

HSBC, the UK bank, announced that it would shut down two bank-sponsored structured investment vehicles (SIVs) and take $45 billion in mortgage-backed securities onto its own balance sheet.  It becomes the first major bank to bail out its troubled SIVs.  A big concern has been that there will be a "fire sale" if SIV assets are dumped on the market.  A consortium of banks, including Citigroup, Bank of America, and JPMorgan Chase, seek to create a "superfund" with $100 billion to buy assets from SIVs to prevent this.  WSJ, HSBC Becomes First Bank To Bail Out Troubled SIVs.

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