[lbo-talk] what's in a name?

Doug Henwood dhenwood at panix.com
Thu Feb 21 12:47:18 PST 2008


On Feb 21, 2008, at 1:22 PM, ulisse mangialaio wrote:


> could somebody please explain to me the conceptual difference
> between a write-down and a bailout of one'own investments, as is
> the case with dresdner bank today?

Dresdner announced that it will essentially take a structured investment vehicle - one of those fancy off-balance-sheet entities that financed long-term risky loans by borrowing in short-term markets that have now shut down - onto its balance sheet. Since it wasn't officially an asset of Dresdner, they couldn't write it off. But now it is. So, conceptually, it's a bailout of something non- Dresdner by Dresdner itself. Though to paraphrase the journalism aphorism (there's no such thing as off the record), there's no such thing as off-balance-sheet.

Doug



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