To some it was nothing more than a pleasant surprise.
To others, this week’s news that the Canadian Imperial Bank of Commerce has an additional $25-billion exposure to investments tied to the health of monoline insurers, was nothing more than a confirmation of what some market participants had known for a few months. Indeed, there has been considerable talk about such exposure among some U.S hedge funds, who were presumably getting their information from other U.S. market participants. That talk had made its way into reports compiled by some Canadian-based analysts. And some of those details had appeared in the press. So the “new” information was neither a surprise nor pleasant.
But until this week, CIBC had played mum on the whole matter. CIBC, which has written off $4.2-billion, used to claim that its disclosure was the bets of all the banks. That may have been the case but Royal Bank of Canada’s first-quarter results contained enough to satisfy the deepest probing analyst.
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