Bear market for banks

Fears intensify for prolonged turmoil

Excerpt:

Huw van Steenis, an analyst at Morgan Stanley, said: “The bear market for banks is unlikely to end until we get some clarity on the extent of the losses... in many cases we’ll not get real clarity until the full-year results next year.”

Frederic Mishkin, a Federal Reserve governor, admitted that although the central bank could use monetary policy to offset the macroeconomic risk arising from the credit squeeze, it was “powerless” to deal with “valuation risk” – the difficulty assessing the value of complex or opaque securities.

Comments: those "complex or opaque securities" are the "collateralized debt obligations" mentioned earlier.