A fresh source of worry for banks who thought they could make it out of the credit crisis unscathed: variable interest entities. VIEs sell short-term debt backed by securities, some of which are insured against default.
According to Mark Pittman for Bloomberg, VIEs may contribute to another $88 billion in losses for banks still reeling from the housing bust. Even Goldman Sachs, which, until now, has escaped the credit crisis, said it may incur as much as $11.1 billion of losses from VIEs, according to Pittman.
