Bond insurer to offset billions of dollars financing

Yesterday the foreign media reported that three major U.S. bond insurer Ambac Financial Group, MBIA FGIC Corporation and the company is working with a number of banks deliberations write-off 125 billion U.S. dollars worth risk bond insurance to reduce credit crisis on the insurance industry to combat.
Bond insurance rating was downgraded to force these insurers eager to deal with these "hot potato." Earlier, the three major bond insurers to credit default contract transactions in the form of these products will be sold to banks, to ensure that the bank holding the mortgage bond debt payments.
At present banks hold a large number of such contracts, such as Merrill Lynch had a 18.8 billion U.S. dollars of such contracts, Citigroup bought a 10.5 billion U.S. dollars of similar products. At present more than in the bond insurance risks financial institutions have been held by the insurance for their reduction, Merrill Lynch & Co. in the fourth quarter of last year and first quarter of this year has reduced holdings of 1.34 billion U.S. dollars of assets, Citigroup A reduction of 1.5 billion U.S. dollars.
The three companies in the smallest FGIC rating has been reduced to junk category. Moody's and Standard & Poor's also MBIA and Ambac rating will be lowered. The Standard & Poor's also said, MBIA and Ambac rating was reduced the impact will spread to the structural financial markets, and increase the pressure on a number of financial institutions.