Credit Crunch 2 – the sequel at FinGad.com

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Categorie: Currencies
Submitted 3 months ago by

Denese

We’ve seen the movie – will the sequel be released? The credit crunch has seemed to be consolidating and the fall-out has been gathered and swept up, but is this the end or are we to be subjected to the horror’s sequel. Current volatlity in the currency markets certainly indicates that the dust hasn't entirely settled.The credit market is still decidedly jittery. According to a report by the Telegraph, the price of credit default swaps, effectively insurance on those institutions failing to pay out on their own bonds has risen dramatically over the past few days, which indicates that default at some level is expected. As Bear Stearns tumbled downhill to its sale to JPMorgan Chase in March, the cost of protecting its debt, through a credit default swap, began to rise rapidly as investors feared that the Bear would not be good for the money promised on its bonds. Is this current rise indicative of other bank vulnerability? Inter-bank lending rates across Europe have also jumped sharply while we eagerly await the results today of the BBA investigation into the BBA LIBOR rates. It was feared that some of the 16 banks responsible f... More...

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