The functioning and resilience of cross-border funding markets

This new CGFS study provides an interesting analysis of the difficulties in cross-border funding markets during the crisis, especially in relation to foreign-currency positions.

3 replies on “The functioning and resilience of cross-border funding markets”

The conservative, very rich, are leaving their traditional investments. Funding is at risk. It will continue to haemorrhage capital as people see what is likely to happen.
The article describes what happened when imbalances in funding left markets reeling and tries to consider options to ensure no recurrence. There will be more occurrences of these imbalances, but they will not be solved.

As capital flees funding markets, is it going to become calmer and easier to borrow for sovereigns or less easy? This is a trend and again is following what happened in the thirties. It is gathering strength, as people no longer believe the politicians nor the economists in the MSM. They are choosing to invest in anything but paper, some fearing hyperflation, but more correctly, fearing chaos as deflation destroys reckless lenders and borrowers alike.

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