HSBC Holdings increased its bad debt reserve by USD 65,438.8+USD 80 million for its subprime mortgage business in the United States.
Facing the debt of $654.38+07.4 billion from Wall Street, New Century Financial Corp, the second largest subprime mortgage company in the United States, announced on April 2 that it filed for bankruptcy protection and laid off 54% of its employees.
On August 2nd, Societe Generale announced a profit warning, and later estimated a loss of 8.2 billion euros, because its Rhineland Fund with a scale of 654.38+0.27 billion euros and the bank itself participated in the US real estate subprime mortgage market a little, resulting in huge losses. The Bundesbank convened banks from all over the world to discuss a package plan to save the German Industrial Bank.
On August 6th, American Mortgage Investment Corporation, the largest mortgage institution in the United States, formally filed for bankruptcy protection with the court, becoming another large mortgage institution in the United States after New Century Finance Corporation.
On August 8, Bear Stearns, the fifth largest investment bank in the United States, announced that its two funds had closed down, which was also due to the subprime mortgage crisis.
On August 9th, BNP Paribas, France's largest bank, announced the freezing of its three funds, which also suffered huge losses due to their investment in American subprime bonds. This move led to a sharp drop in European stock markets.
13 In August, Mizuho Group, the parent company of Mizuho Bank, Japan's second largest bank, announced that the US subprime mortgage-related losses were 600 million yen. Japanese and Korean banks suffered losses due to the US subprime mortgage crisis. According to the estimation of UBS Securities Japan, the nine major banks in Japan hold more than one trillion yen of US subprime mortgage-backed securities. In addition, five Korean banks, including Woori, invested 565 million US dollars in CDO. Investors are worried that the subprime mortgage problem in the United States will have a strong impact on the global financial market. However, Japanese analysts are convinced that most of collateralized debt obligation invested by Japanese banks have the highest credit rating, and the impact of the subprime mortgage crisis is limited.
Later, Citigroup also announced that the losses caused by subprime mortgage in July reached 700 million US dollars, but for a financial group with an annual profit of 20 billion US dollars, this is only a small amount.
The direct cause of the US subprime mortgage market storm is the rising interest rate in the United States and the continuous cooling of the housing market. Subprime mortgage refers to loans provided by some lending institutions to borrowers with poor credit and low income.
The rise in interest rates has led to an increase in repayment pressure. Many users with bad credit feel that repayment pressure is high and there is the possibility of default, which has an impact on the recovery of bank loans.