Managing Exposures To Hedge Funds And Leveraged Vehicles May Be Testing, Report Says Oct 07

Standard & Poors, October 2007

Abstract
LONDON (Standard & Poor's) Oct. 31, 2007--Our banks and broker/dealer ratings expect that inflection points such as the third quarter of 2007 will be testing, but manageable, for most leading players, Standard & Poor's Ratings Services noted in a report, titled "Financial Institutions Face Tests In Managing Exposures To Hedge Funds And Leveraged Vehicles," published on Oct. 30, 2007. This article considers how collateralized lending markets have expanded in recent years and the implications of this for risk management at large banks and broker/dealers. In general, Standard & Poor's continues to consider that investment banks have sufficiently solid risk management, profitability, and liquidity to work through temporary dislocation, although weaknesses in risk management have been revealed at some institutions, notably...

Companies mentioned in this report are:
- Merrill Lynch & Co. Inc.
- UBS AG

Action: General Comment

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research type: News
This product is a is a brief one-page announcement of no more than 500 words with a quote from the analyst. It is media and investor focused with no accompanying commentary article.

- Merrill Lynch & Co. Inc.
- UBS AG

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