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ASR in the Times: Quantitative Destruction is a huge new challenge for central banks

Beth McCann

10th NOV. 2022

Simon Nixon in the Times notes that “There are no shortages of candidates for future sources of financial instability”.

What we are witnessing is what (ASR) have dubbed “quantitative destruction.”

“ …. the unwinding of many of the financial structures that thrived in the past decade that depended on the low level and volatility of rates that quantitative easing delivered. Much of this unwinding is taking place violently and the risk is that strains can spread quickly to even the most liquid markets, as during the liability-driven investment crisis when investors started dumping eurozone and US government bonds to meet margin calls. If private equity investments come under pressure from rising interest costs or a slowing economy, will investors dump listed shares to meet capital calls?”

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