For months, hordes of ill-informed, though frequently highly-paid policymakers and commentators have fallen over themselves in a rush to declare an early end to a still unfolding financial disaster.

Often clueless and with little shame, they threw around terms like "contained," "limited," and "irrelevant," to describe a dangerous situation they did not understand, nor knew how to rectify, though many pretended otherwise.

And yet, despite their wishful thinking and delusional happy-talk, the situation only seems to be getting worse, as the FT Alphaville blog notes in "Another Day, Another Subprime Victim: From State Street and Barclays to DBS,"

Now that the term “structured investment vehicle” is on its way to becoming the finance world’s version of a household phrase, every day brings fresh concerns about the fall-out from US subprime mortgage investments on banks and their off-balance sheet vehicles.

Tuesday’s crop is no exception, with reports in the The Times, Reuters and Bloomberg that banks including Barclays and State Street may be facing losses from the so-called conduits that invested in CDOs.

The Times says State Street has been identified as having $22bn of exposure to asset-backed commercial paper conduits. According to US regulatory filings, the Boston-based bank has credit lines to at least six conduits, which account for 17 per cent of its total assets, says The Times. That proportion makes State Street the most highly exposed bank to conduits among its European and US peers; IKB, of Germany, which was forced to accept emergency funding for its conduit last month, had credit lines worth 15 per cent of its total assets. Deutsche Bank and WestLB each have exposure of 6 per cent, notes The Times.

Meanwhile, the risk of owning Barclays debt rose last week, according to Bloomberg which cites traders of credit-default swaps.