In 2009 it insured loans worth $330 billion, up from just $52 billion in 2006.
Prior to the collapse, the company had insured $441 billion worth of mortgage-backed securities for Wall Street banks in the form of credit default swaps, reports Bloomberg.
Earlier this week, Warren Buffett Warren Buffett, the chairman of Berkshire Hathaway, proposed to re-insure $800 billion worth of municipal bond insurance written by Ambac, MBIA and FGIC at a steep premium.
Buffett proposed the opposite: He would re-insure $800 million worth of municipal bonds backed by the three biggest bond insurers, but not take on any of the firms' exposure to credit derivatives, which have plummeted in value.
He planned to insure his worth by being necessary to the workings of something.
At the epicenter of the problem — Greece — the cost of insuring $10 million worth of Greek debt now equals $5.7 million, a new high, underscoring how the market is already factoring in the likelihood of a Greek default.
It is also a crucial time for Lloyds as it is trying to finalise the details of insuring £260bn worth of assets under the government's asset protection scheme.
In the credit default swap market, the annual cost to insure $10 million worth of investments in Lehman debt for five years rose to $775,000, up from $610,000 Wednesday and $475,000 Tuesday, according to Phoenix Partners.
On top of insuring $6 billion worth of those CDOs, AIG had made an additional $900 million investment in them.
In 2001, a year after passage of the commodities law, the derivatives market insured about $900 billion worth of credit; by last year, the number hadswelled to $62 trillion.
