
BoE Warns of Threat to Financial Markets From Potential Corporate Bond Sell Off – Investment Week
July 14, 2017 \
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Full Article: Investment Week
It found that redemptions worth 1% of the total net asset value of bond funds could result in European investment grade corporate bond spreads increasing by around 40bps, while a sell-off of 1.3% of assets could lead to a 70bps widening.
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5 Comments on "BoE Warns of Threat to Financial Markets From Potential Corporate Bond Sell Off – Investment Week "
The Friday Newsletter has had numerous Articles of the Week that have highlighted the anecdotal evidence of decaying liquidity in the bond markets. The fact that the BOE has empirically developed a scenario where a drop in the value of derivatives of the bond market can have a multiplier effect impacting the broader market should serve notice to those who denied any decay because it didn’t fit their narrative. They used to claim that there’s no there, there. Well, there is.
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