- verifiedEurope's debt is 'a repeat' of the global financial crisis
The bank said the European critical time in fact bore closer equivalence to late 2007, when the subprime moment began, than to the Lehman tumble down. Market volatility had been even greater in the days of yore three months than it was in 2007, although the take place in bank funding costs had been debase.
It said worries about the refuge of European banks meant they were judgement it harder to get access to US dollars. "Faced with growing uncertainty, investors cut imperil exposures and retreated to well-known safe haven assets."
BIS said Australia had been caught up in the turmoil with investors selling what they believed were touchy assets, including the Australian dollar, which has fallen from US91.23c to US85.71c in the on three months. Australian stocks are down only just over 10 per cent from the 18-month highs reached in mid-April.
The bank said investor nervousness was irresistible positive developments in the saving. "Market participants focused on the deteriorating pecuniary market conditions while often ignoring unequivocal macro-economic gossip." It cited US sharemarkets falling by 1.5 per cent following the rescue of surprisingly good m figures.