European banks are about to report earnings, and the outlook isn't pretty.
Analysts are predicting write-downs for an array of problems, including exposure to debt backed by struggling U.S. bond insurers, high-yield corporate loans, commercial-mortgage securities, and "alt-A" U.S. mortgages that rank a step above subprime loans in risk.
Jon Peace, banking analyst at Lehman Brothers, expects €3 billion ($4.4 billion) of write-downs when Deutsche Bank AG reports today. That's in addition to €2.2 billion in write-downs already taken.
Commercial-mortgage backed securities are a mounting problem.