Standard & Poor’s downgraded or threatened to downgrade more than 8,000 mortgage investments and projected a widening array of financial institutions would ultimately face mortgage-securities losses totalling more than $265bn, reports the Wall Street Journal. The new sweep of downgrades - the largest of several in the past few months - threatens to create new turmoil in a market already shell-shocked by write-downs of about $100bn and declines in housing values. S&P suggested that many financial institutions would need to sell some of the bonds affected by Wednesday’s rating action. In all, it expects losses for financial institutions to more than double from what has already been recognised. S&P said the new downgrades may not hurt big banks that have already taken write-downs. Instead, it said, the impact could broaden to regional banks, credit unions, government-sponsored enterprises and some European and Asian banks that haven’t yet taken big write-downs.
