Megan Greene on the UK’s Recent Market Turmoil and What it Means for the Future of the Global Economy
Macro Musings with David Beckworth
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Is There a UK LDI Pandemic?
European banks have been massively subsidized for the past few years by the telteros, the targeted long term refinancing operations. What we saw with share prices of credit suites, though, was that actually, even if the fundamentals seem sound enough, you can have a loss of confidence in banks. We expect some of that to be downgraded as profits are going down and rates are going up. You could get kind of a UK LDI type doom loop that the Fed might have to step in and fix.
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