22 Jan, 2008
Interpreter: Hendersons says monoline insurers are to blame for
Henderson Global Investors have pointed the blame for the last two
days of volatility firmly at the threat of downgrades to US
The group's director of economics and strategy, Tony Dolphin
said: 'If you ask why now? It is down to the risk of downgrades
to monolines in the United States, the bond insurers.
Dolphin said that if the monoline insurers are downgraded then it
could lead to very serious problems in bank's balance sheets,
so serious in fact that cuts to US interest rates will prove
powerless to stop either recession or a worsening of the credit
He said: 'This could lead to a recession which is impervious to
the cuts in interest rates. You could see seriously impaired
balance sheet at banks and a bid credit crunch.'