ASR in the Times: Quantitative Destruction is a huge new challenge for central banks
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?”
To read the full article from Simon Nixon, see HERE (Times subscription may be required)
ASR clients can read ASR notes Quantitative Destruction – The End of an Era (13 October) and CPI Relief as Quantitative Destruction Persists (14 Nov 2022)
To request a copies as part of a free trial, kindly reply HERE