The recent rally in the markets for “toxic” securities could significantly boost US banks’ Q3 earnings if they book accounting gains on assets that caused them huge losses in the financial crisis. Bank executives say the rise in the price of mortgage-backed securities and other once-battered debt offers a chance to “write up” some of the value of these distressed assets. In the last three months, the Markit ABX index, which tracks securities backed by home loans such as subprime mortgages, has gained more than 30%.

This entry was posted by Gwen Robinson on Monday, September 28th, 2009 at 4:42 and is filed under Capital markets. Tagged with Markit ABX index. Edit this entry.