Subprime Litigation Concerns

Every day another news headline appears on the subprime loan crisis in the U.S., so a release out of the London offices of Marsh on this topic makes for interesting reading. In it Marsh warns that the European financial services sector, including insurers, hedge funds, banks and ratings agencies, may be exposed to greater Directors’ and Officers’ liability (D&O) and Errors and Omissions (E&O) liability claims in the wake of the subprime meltdown in the U.S. Citing a  recent NERA Economic Consulting primer, Marsh says potential litigation arising out of D&O and E&O liability could include: lenders’ lawsuits versus banks; shareholders’ lawsuits versus lenders, accountants, trustees and underwriters; insurers’ lawsuits versus lenders; investors’ lawsuits versus trustees; trustees’ lawsuits versus lenders and underwriters on behalf of investors; as well as individual investor lawsuits. Marsh goes on to caution that European insurers, hedge funds, banks and ratings agencies must continue to assess the risks raised by the crisis and to examine their D&O and E&O exposures. What do you  make of this analysis?

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