Bailout

Monoline datapoint of the day

By Felix Salmon

Bloomberg reports:

Ambac, MBIA Inc. and Assured Guaranty, the three largest bond insurers, have set aside 0.04 percent of the total public finance debt they insure, or $520 million, to pay claims on municipal securities, according to regulatory filings by the companies.

No, that’s not a misprint: the claims-paying reserves are 4 basis points of the total quantity of municipal bonds insured. What’s more, the market capitalization of all three monolines combined is less than $5 billion; the amount of municipal bonds insured, by contrast, is well over $1 trillion.

What could possibly go wrong?

Full post as published by Macroprudential on February 23, 2010 (boomark / email).