According to the International Monetary Fund, not only
does the risk exist, it could be triggered by the collapse of the same
genus of exotic derivatives that took us down last time. Is the global economy on the cusp of another super-bank meltdown
that would pull the world down in a domino-chain crash similar to—or
worse than—2008?
“The global derivatives markets in the post Lehman period… are unstable and they can bring about catastrophic failure,” according to a new IMF paper. The author summarizes why the derivatives market still has the entire system a breath away from yet another crisis:
of the... Source/Full story
related:
As the economic crisis continues to rage on, regulators are coming under
fire for making banks' lives easier rather than the people's. And it
appears the wider public knows little of how and where the big decisions
about the global financial future are being made, as RT's Peter Oliver
reports. Source
“The global derivatives markets in the post Lehman period… are unstable and they can bring about catastrophic failure,” according to a new IMF paper. The author summarizes why the derivatives market still has the entire system a breath away from yet another crisis:
Quite simply, a threat of failure to
any of the systemically important financial institutions (SIFIs) is an
immediate threat to the others.
The network topology where the very high percentage of exposures is concentrated among a few highly interconnected banks [JP Morgan, Bank of America] implies that they will stand and fall together....
Structurally, as will be seen, the interconnected hubs often suffer self-annihilation and thereby [not] spread[ing] contagion to the extremities—a matter of considerable significance [when considering] saving a species from epidemics.
What should immediately be noticed here is that the International
Monetary Fund (IMF) author considers the “self-annihilation”...of the... Source/Full story
related:
Basel Banksters: Secretive elite group pulls strings of finance
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