S&P today:
placed the ratings on Bank of Montreal (BMO) and its related subsidiaries, including the ‘AA-‘ long-term counterparty credit rating on BMO, on CreditWatch with negative implications.
…
The absolute size of the estimated commodity trading losses far exceeds the bank’s average market value exposure to commodities risk, is disproportionate to its total trading revenues, and does not reflect BMO’s stated strategy of being a low-risk bank.
Standard & Poor’s will be conducting a full review of BMO’s trading risk management and trading operations within the next 30 days, with a particular focus on its commodities trading operations, and its back and middle offices.
Following our review, should the bank’s trading risk and enterprise risk management not meet our expectations, both the short- and long-term ratings could be lowered by one notch.
This follows revelations of trading losses of $680-million. The $680-million figure cannot be taken too seriously – three weeks ago it was somewhere between $350-million and $450-million.
BMO has the following preferred share issues outstanding: BMO.PR.G BMO.PR.H BMO.PR.I BMO.PR.J & BMO.PR.V.
The rogue (or simply incompetent) managers at BMO are going to have to have a lot of lunches with each other to fix this one up! Expect to see a few clerks thrown to the wolves.
This entry was posted on Friday, May 18th, 2007 at 11:38 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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BMO on Credit Watch Negative: S&P
S&P today:
This follows revelations of trading losses of $680-million. The $680-million figure cannot be taken too seriously – three weeks ago it was somewhere between $350-million and $450-million.
BMO has the following preferred share issues outstanding: BMO.PR.G BMO.PR.H BMO.PR.I BMO.PR.J & BMO.PR.V.
The rogue (or simply incompetent) managers at BMO are going to have to have a lot of lunches with each other to fix this one up! Expect to see a few clerks thrown to the wolves.
This entry was posted on Friday, May 18th, 2007 at 11:38 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.