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The rating agencies will suffer from the lack of lucrative fees for rating subprime securities, loss of reputation for being oblivious to the gathering problems and more regulatory oversight.
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LAST week's ugly action in the stock market was caused in large part by fear about how badly banks will be hit by loan and securities losses.
The E*Trade Financial Corporation, the online brokerage firm, posted a fourth-quarter loss Tuesday, but the result was an improvement from the year-earlier period when it recorded a charge of more than $2 billion for securities losses.
This matters more and more because Japan is due to introduce market-value-based accounting this year meaning that unrealised securities losses will start being deducted from their capital.
I'm loyal to Mr Kikukawa," Mr Mori is said to have replied.Mr Kikukawa, Mr Mori and the company's statutory auditor have since resigned from the board of Olympus, accused of a huge cover-up of securities losses dating back to the 1990s.
The company had pretax securities losses of $1.24 billion, due to the ongoing turbulence in the financial markets.
U.S. Bancorp just reported its profit fell a larger-than-expected 47%, hurt by higher reserves for bad loans and securities losses.
But many parties are objecting to that settlement, and the deal didn't stop the insurer American International Group Inc from suing Bank of America for $10 billion over its own alleged mortgage securities losses.
This was partly related to loans and securities losses incurred or recognized (such as through mark-to-market) - but that the main culprit was more prosaic: it was a sudden freeze in the payments system under the dual impact of collateral calls and a flight-to-safety (overnight lending became unavailable except against top-rated securities and Treasuries).
"In a world with O.J. Simpson and the Jon-Benet Ramsey case, there is a sense of security loss," explains Mr. Petersen.
32% of sources cited costs, yielding 15 initial codes which were grouped into 5 domains: financial; reputational; health & security; loss of staff; and opportunity costs.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com