Monday, 12 March 2018

BIS: Despite market turbulence, minimal signs of stress

The Bank for International Settlements released its latest quarterly report on Sunday.

In the report, the BIS noted: “Stock markets across the globe underwent a sharp correction in late January and early February.”

“A sharp increase in long-term US bond yields heralded the stock market stress,” the BIS added. “A firming inflationary outlook was at the root of the increase in US long-term yields during the period under review.”

However, the BIS did not appear too concerned, at least for the United States.

“Despite equity market turbulence and higher yields, financial conditions remained very accommodative in the United States, with minimal signs of overall stress,” it concluded.

Still, in a special feature, the BIS said that its latest set of early warning indicators of banking crises showed that “Canada, China and Hong Kong stand out, with both the credit-to-GDP gap and the DSR flashing red”.

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