November 09, 2007

RBS: Banks Face $100 Billion in Level 3 Writedowns

Royal Bank of Scotland is warning that banks and investment houses face as much as $100 billion of writedowns because of Level 3 accounting rules.

Royal Bank's chief credit strategist Bob Janjuah in a reserach note says that including subprime problems, "this credit crisis, when all is out, will see $250 billion to $500 billion of losses."

"The heat is on and it is inevitable that more players will have to revalue at least a decent portion" of assets they are currently value using "mark- to-make believe," Janjuah added.

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