Bank of China Holds $9.7 Billion of Subprime Assets

Now things are getting interesting! Bloomberg reports that BOC holds a whopping $10 billion in sub-prime MBS. This far exceeds amounts admitted to by any other global bank. Very little is know at this point about what types of securities are owned, are they CDOs and if so which tranches (presumably AAA). All that can be safely assumed at this point is that there will be losses and that they could easily amount to a billion or more. I would say this moves the sub-prime mess into a new chapter. Last week's headline was ABCP (not very catchy really). This week its:

"Fort Myer's condo losses hit Beijing"