Firewall Built on Liquidity

• January brought palpable relief to global financial markets. Equities rallied across the world by more than 8%, with emerging market equities leading the charge rising by more than 15%. Credit spreads have also tightened substantially, with European financial spreads narrowing quite sharply, outperforming other sectors.
• Plentiful liquidity supplied by the ECB and other major central banks, amid recent data reflecting resilient US and emerging market economies and less-severe-than-expected European recession, have fostered the perception that European sovereign debt and banking crises have receded and contagion risk contained.
• The key question is whether the relief can be sustained to buy time for fiscal austerity to work.

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Following the publication of the Capital Markets Monitor Hung Tran hosted a teleconference on February 14, 2012. The recording of the briefing and the Q & A session is now available for replay.

Download the teleconference (.mp3)