NEW YORK CITY-CMBS suffered another blow to the head after Credit Suisse announced the shutdown of its commercial mortgage-backed securities origination division during its quarterly earnings call on Tuesday, a sign the investment bank is significantly downscaling its offerings of securitized products. A spokesman for Credit Suisse tells GlobeSt.com that while the firm will eliminate its CMBS origination business, the company will continue to operate its secondary market-trading branch.

The decision was coupled with the elimination of 1,500 positions companywide, 50 of which that were part of the CMBS origination group, the Wall Street Journal reported. The reductions are expected to save around $2 billion, according to company earnings.

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Manus Clancy, senior managing director at Trepp LLC, tells GlobeSt.com that Credit Suisse’s actions are a result of the volatile CMBS market rather than a leading indicator. “We started seeing spreads start creeping up in June, going significantly wider in July and they got absolutely crushed in August,” Clancy says. “Things have danced around considerably to the point where a lot of dealers felt that it was hard to assure themselves that they would see a profitable CMBS deal in the current market. With spreads bouncing around as much as they were, it was hard for dealers to lock-in loans and predict profitable deals in the current environment.”