Wachovia securities not liquidating funds
In such a highly leveraged structure, a three- to five-percent decline in real estate values would wipe out all capital.
By 2003 Lehman made .2 billion in loans and ranked third in lending. By 2006, Aurora and BNC were lending almost billion per month.By 2008, Lehman had assets of 0 billion supported by only .5 billion of firm capital.From an equity position, its risky commercial real estate holdings were thirty times greater than capital.As liquidating agent for US Central, Wes Corp and Southwest, NCUA has a statutory duty to seek recoveries from responsible parties in order to minimize the cost of any failure to its insurance funds and the credit union industry.Recoveries from these eight additional legal actions will further reduce the total losses resulting from the failure of the five corporate credit unions.
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“Credit Suisse is one of several firms that sold faulty securities to corporate credit unions, which led to their collapse,” said NCUA Board Chairman Debbie Matz.