Standard & Poor’s said total losses for financial institutions from the mortgage market problems will eventually reach more than $265 billion, including the $90 billion or so already announced. S&P said it cut or may cut its ratings on $270 billion worth of U.S. mortgage-backed securities and put $264 billion of collateralized debt obligations on watch for a possible downgrade.

In the U.S., we see losses moving to regional banks, credit unions, and FHLBs. Certain Asian banks are also exposed. There could be rating actions for selected banks, especially for those that are thinly capitalized. …