Now is one of those times. On March 16th the Swiss National Bank extended $54bn to Credit Suisse, backed by the bank’s collateral, in a move that turned out to be insufficient to save the 167-year-old institution. On March 19th America’s Federal Reserve announced it would reactivate daily dollar swap lines with Britain, Canada, the euro area, Japan and Switzerland.
The perception of safety is the reason why risks eventually emerge. The safer assets are thought to be, the more comfortable a lender is extending credit against them. Sometimes the assets are themselves safe, but the lending they enable is not. During the global financial crisis of 2007-09, the belief in the unimpeachable safety of the American mortgage market led to an explosion in collateralised lending. The blow-up did not even require actual defaults in mortgage-backed securities. The mere shift in the probability of default raised the value of credit-default swaps, and the liabilities of firms that sold the products, which was sufficient to sink institutions that had sold enormous volumes of the swaps.
The West keeps giving the restof the world trouble too!
risk of sudden collapses I thought you were talking about the news anchors
The globalist/transhumanist utopia is forever moribund, the obvious malevolent fraud of the covid/climate change hoaxes and the abject horror of the child sexualization/mutilation movement has doomed the progressive movement forever. Take the time today to renounce these horrors
BTC Bitcoin