Tuesday, June 07, 2016

Bank Of Japan Board Member Warns:
Historic Bond Market Collapse
"Financial institutions are facing the risk of a negative spread for marginal assets due to the extreme flattening of the yield curve and the drop in the yield on government bonds in short- to long-term zones into negative territory. When there is a negative spread, shrinking the balance sheet, rather than expanding it, would be a reasonable business decision .. A weakening of the financial intermediary functioning could affect the financial system's resilience against shocks in times of stress. In addition, an excessive drop in bond yields in the super-long-term zone could also make the financial system vulnerable by increasing the risk of a buildup of financial imbalances in the system. There is also the risk that financial institutions that have problems in terms of profitability or fiscal soundness will make loans and investment without adequate risk valuation. From financial institutions' recent move to purchase super-long-term bonds in pursuit of tiny positive yield, I detect a vulnerability similar to that seen before the so-called VaR (Value at Risk) shock in 2003."
- Bank of Japan policy board member Takehiro Sato
LINK HERE to the speech

1 comment:

Anonymous said...

Bilderberg 2016: We can expect desperate lobbying against Brexit from Big Business

As the EU referendum looms, a great counsel of war is gathering. Henri de Castries, the Chairman of the influential Bilderberg Group, has made his way to the highest hill above Dresden, placed a mighty conch shell to his aristocratic French lips and blown.

Responding to his call, 140 or so of the most powerful pro-European business leaders and politicians will be making their way to the five-star Hotel Taschenbergpalais to discuss the future of their beloved free trade zone. Bilderberg conference kicks off on Thursday, and you can be sure the mood in Dresden will be a grim one. The heads of Google, Shell, BP and Deutsche Bank will be there, and Brexit will be top of the agenda. The Bilderberg Group has been nurturing the EU to life since the 1950s, and now they see their creation under dire threat.
"A disaster for everyone" is how Henri de Castries, the boss of AXA and a director of HSBC, describes Brexit. But in particular, it is a disaster for his banking and big business colleagues at Bilderberg.

http://www.ibtimes.co.uk/bilderberg-2016-we-can-expect-desperate-lobbying-against-brexit-big-business-1563898