The US Securities and Exchange Commission’s reported move to check the books of leading Wall Street banks highlights analysts’ concerns that some groups have yet to report the full fallout from the sub-prime crisis and credit crunch, Financial News reports.
While funds at Bear Stearns and Goldman Sachs have been hit by widely reported losses, pure play investment banks including Lehman Brothers, Merrill Lynch and Morgan Stanley appear to have emerged relatively unscathed.
Most market observers do not believe that will last and the SEC’s move to check the banks’ books highlights those concerns, according to analysts.
Given the lack of transparency, identifying the exact nature of losses at banks is a difficult undertaking, but a sharp fall in share prices of Wall Street’s leaders tells its own story.
Banks said publicly their sound risk management systems have prevented any nasty shocks, and that any losses represent a fraction of their total market value.