BIS Warns That “Uneasy Calm” In Markets May Be Shattered By Fed Hike Imperiling $3.3 Trillion In EM Debt
by Tyler Durden
ZeroHedge.com
12/06/2015
Claudio Borio has been pounding the table on complacency and mounting market risk for quite some time.
It was exactly one year ago that the BIS’ Head of the Monetary and Economic Department penned the following warning about the market’s dependence on central bank omnipotence:
To my mind, these events underline the fragility – dare I say growing fragility? – hidden beneath the markets’ buoyancy. Small pieces of news can generate outsize effects. This, in turn, can amplify mood swings. And it would be imprudent to ignore that markets did not fully stabilise by themselves. Once again, on the heels of the turbulence, major central banks made soothing statements, suggesting that they might delay normalisation in light of evolving macroeconomic conditions. Recent events, if anything, have highlighted once more the degree to which markets are relying on central banks: the markets’ buoyancy hinges on central banks’ every word and deed.
Then, in March, he spoke out about the dangers of increasingly illiquid secondary markets for corporate bonds:
The Rest…HERE
