- Facebook Fiasco: 10 Things Underwriters Got Wrong
- Sticker Shock: What College Is Likely to Cost in 18 Years
- Europe Has Wall Street's Bull on a Short Leash
- What Happened to Stocks? Most Unloved in 50 Years
- Icahn Raises Stake in Chesapeake, Wants Board Seats
- Citigroup Lost $20 Million on Facebook IPO Trades
- Break Up JPMorgan: Sheila Bair
- Main Players in the Greek Election
- Many Greeks Moved Their Money Abroad Long Ago
- A New Look at the ‘New Poor’
- Six Pack: Beer Buzz of the Week
- Greek Exit Could Trigger 50% Fall in Euro Stocks: Analyst
- Under Pressure, FHA Skews to Wealthier Home Buyers
- Big Stock Upside for Hudson City Deal: Analyst
- 5 High-Yield Stocks Ready to Boost Dividends
- Yoshikami: Four Things You Need to Know About Gold Now
- Steinbock: The Euro Zone Endgame Begins
- Option Bulls Take Another Shot on Idenix
MOST SHARED
- Citigroup Lost $20 Million on Facebook IPO Trades
- Oil Declines, but Doesn't Help European Consumers
- Traders Worry Over 'Possible Risks' During Long Weekend
- Bankia Asks Spain for $23 Billion Bailout
- Spanish Lender Seeks 19 Billion Euros; Ratings Cut on 5 Banks
- Najarian: Yahoo! a Must Own Stock
- Facebook: The Song — Yes, We're Serious
- Marc Faber: 100% Chance of Global Recession
- S&P Cuts Ratings on Five Spanish Banks
- The Shortage of Women Billionaires
MOST POPULAR
HOT ON FACEBOOK
Bankers Downplay Reports of Bond Insurer Rescue
Text Size 
On-Air Editor
Bankers who met with New York insurance regulators to discuss a reported bailout of troubled bond insurers downplayed the meeting's significance Thursday, with one calling it a "non-event."
 |
NY State New York Insurance Superintendent Eric Dinallo said a bailout would involve "complicated issues." |
Bankers told CNBC that there was no consensus formed at the meeting and no movement on creating substantial plans for a rescue. Moreover, reports of the meeting may have made a bad situation for the industry worse, bankers said, as a subsequent jump in bond insurer stock prices scared off private equity firms that may otherwise have injected capital into the companies.
News of the meeting helped boost the overall stock market Wednesday. But shares of both MBIA [MBI
Loading...
()
] and Ambac Financial Group [ABK
Loading...
()
] were sharply lower Thursday after skyrocketing higher the day before.
Regulators met with a number of investment banks to determine if a bailout can be worked out for companies that insure municipal bonds; the insurers have been badly hurt in the meltdown of subprime mortgages, which could lead to a spike in insurance claims.
New York's top insurance regulator himself appeared to play down reports of a bond insurer rescue plan in a statement Thursday. Insurance Superintendent Eric Dinallo said it will take time to implement a series of measures to prop up the bond insurance industry and that his agency won't comment on widely reported details of the plan.
"Clearly it is important to resolve issues related to the bond insurers as soon as possible," Dinallo said. "However, it must be understood that these are complicated issues involving a number of parties and any effective plan will take some time to finalize."
News reports and analysts have said the plan could include investment banks providing as much as $15 billion to help struggling companies.
Dinallo said he won't respond to "rumors" about the measures being discussed. Also Thursday, shares of bond insurers fell sharply after Fitch Ratings cut the financial strength rating of Security Capital Assurance [SCA
Loading...
()
] to "A" from "AAA."
Fitch earlier cut the crucial financial strength rating of another insurer, Ambac Financial Group, to "AA" from "AAA." Bond insurers essentially need a "AAA" rating to generate new business.
Both companies scrapped plans to raise additional capital, which the rating agency had demanded as a condition of maintaining the highest rating.
Friedman, Billings, Ramsey & Co. analyst Steve Stelmach wrote in a research note Thursday a bailout could entail investment banks providing $5 billion immediately to help struggling companies. That could satisfy capital shortfalls at Security Capital Assurance, Ambac and other insurers. The investment banks could pour in an additional $10 billion in the future, Stelmach said.
-- AP contributed to this report.
- The Nasdaq has suffered the most from the EU crisis showing there's risk in the usual tech stocks.
- Targeting more Millennials is just one of the items brewing for consumers in the world of spirits.
- It seems many people may need a reminder of how NOT to act on a plane. Here are a few tips.
- Here are some very unusual roadside stops along American highways that might peek your interest.
- How three generations of Americans are dealing with the finances of retirement.
Data is a real-time snapshot *Data is delayed at least 15 minutes
