With losses expected to exceed $3Bn related to subprime, CIBC is in for a tough road, and McCaughey is expected to go.  This makes the earlier view of $2Bn for Canadian bank losses laughably off.  Canada is looking at more like $6Bn + at this point.  In short, no-one knows.  As noted here this morning:

“It reminds me of a time earlier in my career – junk bonds,” he said.
“When they were run out of one man’s drawers [Michael Milken’s], it
wasn’t a market. It wasn’t very transparent. Now high-yield bonds or
junk bonds are a genuine asset class and more transparent. So I suspect
the solution to this lack of transparency … is going to be more
market, not less. How can you call these things a market when they
can’t trade, and there’s no price-discovery process?”

More exposure ahead for CIBC

Luckily, given the buffer of operating in the stable Canadian
market, CIBC has a lot of breathing room. Mr. Goldberg figures that,
even if another US$4.5-billion were wiped off CIBC’s books,
shareholders would still be guaranteed the current level of dividends
and CIBC could avoid having to issue capital.

As for the
prospects for Gerry McCaughey, CIBC chief executive and the would-be
fix-it man who was at the helm when CIBC ploughed into subprime, I
don’t think anyone would guarantee he’ll be around much longer.