In addition, banks may exhibit numerous types of exposures to monoline insurers. In the case of materialization of these risks, banks are likely to face more provisioning or write-offs.
•  As for the CDS vicious circle (see chart 3) some banks with no exposure to subprime saw a sharp rise of the spread of their traded CDS from 30 basis points in July 2007 to 700 basis points during the recent turbulences. This is mainly due to a pronounced increase of doubts and uncertainties.