...The recent turmoil in credit markets has resulted in diminishing liquidity and the re\01pricing of structured finance risk, with the market value of most structured finance assets declining, triggered b y the problems associated wi th the US subprime residential mortgage\01backed securities (RMBS) market. Structured investment vehicles (SIVs) have suffered acute stress from the turmoil. As of July 2007, Fitch estimates that SIVs had USD368bn of total outstanding, although this figure has come down in recent months due to continuing market turmoil. SIVs, traditionally reliant on short\01term funding through the issuance of commercial paper (CP), have been forced to refinance a significant part of their debt through the issuance of new CP or the liquidation of assets at lower prices at a time of extreme market turmoil. Banks are key intermediaries in this market, as sponsors, investors, and liquidity providers for these vehicles. Not surprisingly...
