Sub Prime Affects More

Real Estate Agent with CENTURY 21 Anne Arnold

After seeming to have skirted the worst of the mortgage issues plaguing the financial sector, more investors have reported to overevalueate up to $1 billion in assets.

Traders didn't update their figures to keep up with the market downturn, and this tardiness resulted in assets being marked higher than their actual value.

The news comes a week after investors posted solid fourth-quarter results that defied the industrywide gloom stemming from the fallout of the U.S. subprime crisis, and a month after French bank Societe Generale SA said a futures trader racked up losses of more than $7 billion before being found out.

Other analysts warned that regulators were likely to consider forcing financial institutions to demonstrate tighter controls of the complex  and often vast  investments handled by small groups of traders.

More bad news could pave the way for further buy-ins by foreign investors.

So-called sovereign wealth funds operated by cash-rich governments in Asia and the Middle East have been quietly accumulating shares in western financial institutions in recent months.

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