The Return of the Credit Cycle: Old Lessons in New Markets - speech by Sir John Gieve

In a speech at the Euromoney Bond Investors Congress, Sir John Gieve - Deputy Governor of the Bank of England - highlights the return of the credit cycle and how some old lessons have re-emerged in the new credit markets.
Published on 27 February 2008

He says that: "As in previous banking cycles, a period of strong growth, low interest rates and rapid increases in asset prices lead to over confidence and bad lending at the top of the cycle; defaults, deleveraging and retrenchment follow in the downswing. But the way this old story has unfolded through the new credit markets has sprung some unpleasant surprises, including the speed with which losses in just one market in one country - the housing market in the US - have disrupted wider credit markets in all advanced economies."

PDFPress release

 


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