LONDON (Thomson Financial) - The Bank for International Settlements (BIS) said 'a cautious return of risk tolerance' is emerging in wider financial markets after the confidence shattering credit crunch since late last year.
Still it has been a topsy-turvy year so far, the organisation said in its latest quarterly review. It said that the improvement seen up to the end of May came after 'deepening turmoil and rising concerns about systemic risk' in the first two weeks of March.
BIS attributed the rebound in markets to repeated central bank action to shore up confidence and the Federal Reserve-facilitated takeover of a large U.S. investment bank. Before that though, there had been some rough times. 'The process of disorderly deleveraging which had started in 2007 intensified from end-February, with asset markets becoming increasingly illiquid and valuations plunging to levels implying severe stress.'
But despite the improved picture there was one notable exception --- 'interbank money markets failed to recover, as liquidity demand remained elevated'. sivakumar.sithraputhran@thomson.com ss/jlc COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Still it has been a topsy-turvy year so far, the organisation said in its latest quarterly review. It said that the improvement seen up to the end of May came after 'deepening turmoil and rising concerns about systemic risk' in the first two weeks of March.
BIS attributed the rebound in markets to repeated central bank action to shore up confidence and the Federal Reserve-facilitated takeover of a large U.S. investment bank. Before that though, there had been some rough times. 'The process of disorderly deleveraging which had started in 2007 intensified from end-February, with asset markets becoming increasingly illiquid and valuations plunging to levels implying severe stress.'
But despite the improved picture there was one notable exception --- 'interbank money markets failed to recover, as liquidity demand remained elevated'. sivakumar.sithraputhran@thomson.com ss/jlc COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.