Prudent pruning

Are chainsaws or nail scissors best for cutting the value of flaky subprime investments down to size? Fortis, Belgo-Dutch bank, has come up with two scenarios – medium and hard – for pruning its own E5bn portfolio. Such a two-sided approach may be typical of a bank with headquarters in both Utrecht and Brussels and a dual listing. But other banks face the same dilemma. It’s a big dilemma. If Fortis can stick by its own – moderate – valuation models, it will take about a E1bn haircut on its CDO ...