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In all three cases, their actual subprime mortgage exposure is proportionally small.
This summer, KKR Financial wrote off its remaining mortgage exposure and is now invested 100percentt in corporate debt.
Bank of America had considered purchasing Merrill some 10 months ago but found its mortgage exposure too unpredictable.
"Should they have told us all of their subprime mortgage exposure?" said Jeffery Harte, an analyst with Sandler O'Neill.
That is also because, unlike many Western banks, they have few toxic assets and limited mortgage exposure.
"We have materially reduced our residential mortgage exposure and marked our remaining holdings to levels that make future write-downs unlikely," Mr. Lowitt said.
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Mortgage exposures in inner-city Brisbane and Melbourne were estimated to be about $10bn $20bn.
Mortgage exposures were larger in Sydney, about $20bn $30bn, reflecting Sydney's higher apartment prices.
The new regulations meant that "the average risk weight on Australian residential mortgage exposures will increase from approximately 16% to at least 25%".
The large banks, no doubt, would resist; they would be forced to write down the mortgage exposures they carry on their books, which some banking experts contend would force them back into the Troubled Asset Relief Program.
Since the start of the fourth quarter of last year the bank has written off more than $30 billion in future provisions, legal settlements and other losses relating to their mortgage exposures, according to a tally by CLSA, a broker.
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