The 78th Annual Report of the Bank for International Settlements for the financial year which began on 1 April 2007 and ended on 31 March 2008 was submitted to the Bank's Annual General Meeting held in Basel on 30 June 2008.
Introduction: the unsustainable has run its course
After a number of years of strong global growth, low inflation and stable financial markets, the situation deteriorated rapidly in the period under review. Most notable was the onset of turmoil in the US market for subprime mortgages, which rapidly affected many other financial markets and eventually called into question the adequacy of capital at a number of large US and European banks. At the same time, US growth slowed markedly, reflecting setbacks in the housing market, while global inflation rose significantly under the particular influence of higher commodity prices.
The views expressed here do not necessarily reflect the views of the BIS member central banks.