Thursday, Apr 26, 2007
BOE still unaware of emerging liquidity crisis
independent: Bank warns of increased risks to the UK's financial system
In its twice-yearly Financial Stability Report, the Bank said the financial system remained "highly resilient".
Well conditions are still benign so of course this will be the case.
Posted by sold 2 rent 1 @ 09:39 AM (165 views) Add Comment
4 Comments
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1. dohousescrashinthewoods said...
How can it be assessed as resillient in benign conditions?
Surely it's only under stress that your true colours shine through?
2. sold 2 rent 1 said...
Exactly.
I fear the BOE attitude to risk may have been lowered just like the market's attitude to risk.
The Bank's atitude to risk is higher then the markets but it looks it has fallen by the same proportion.
Worrying times.
3. Whiteknight said...
Interesting.
This means there is a very, very, very serious problem.
Anybody with a functioning cerebral cortex knows that the currently the financial system and the market system has backing the strength of tissue paper.
As ever with eletronic trading systems (much as we found out with forex systems) there is an illusion of liqudity that vaporises when there is a problem.
The fact that the authors describe it as "very resilient" gives them away. They could have highlighted a few problems... make it look plausible.
I believe the fighting term is "stay on your toes and be ready."
4. sold 2 rent 1 said...
I wonder how the next few reports will sound
Oct 2007: financial systems remain intact despite 20% market sell-off
April 2008: financial systems coping well despite continue share decline.
Oct 2008: financial systems handling well the collapse of the pound and continued share decline.
April 2009: financial systems holding up well since the collapse of serveral large hedge-funds
Oct 2009: financial systems experience strain as unemployment and bankruptcies soar
April 2010: financial systems near to collapse as several banks go under.