| Abstract: | The significant credit-market events of fall 2008 and the resulting loss of confidence prompted Standard&Poor's Ratings Services to reassess our view of the creditworthiness of financial institutions globally. As a result, we believe that several factors will combine to change the face of the banking industry, including: increased regulation, consolidation of weaker entities, fundamental reconsideration of the "originate-to-distribute" model, adaptation to higher volatility, and higher losses for this economic cycle (see "How The Credit-Market Crisis Is Changing The World Of Banking," published Nov. 25, 2008, on RatingsDirect). In the U.S., when the current credit cycle began in 2007, we had factored an economic slow-down into our ratings, but not a severe recession nor the exceedingly high credit losses
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