What to make of HSBC's big move

People have long been speculating that more banks will be forced to take more SIV assets onto their balance sheets. That seems to have come to pass with HSBC. It announced it will take $45 billion in assets from two SIVs, to prevent the vehicles from having to sell quality assets at higher prices. The fear of course is that the bank will be opening itself up to losses generated by the vehicles. HSBC says that the original investors will still bear "all the economic risk up to the full amount of their investment." Quite a deal it struck. So it is basically lending its balance sheet heft to the vehicles to hopefully buy enough time for the underlying assets to recover. You have to wonder if Citigroup is taking note. If it could take the assets but not the risk, it may also take billions onto its books. Stay tuned.  

For more:
- here's the MarketWatch article

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