About this issue
The BIS Quarterly Review for December 2011, released today, shows how concerns about sovereign risk in the euro area affected financial markets across the globe.
The December issue also provides highlights from the latest BIS data on international banking and financial activity.
In addition, it features five articles:
- FX trading strategies such as carry or momentum trades exhibit substantial downside risks to investors. One bad month can be sufficient to wipe out one to two years of excess returns.
- The Chinese policy of boosting the international role of the renminbi could undermine the effectiveness of capital controls while improving the allocation of capital.
- Policy frameworks need to take into account the liquidity cycle - liquidity and credit booms and their associated contributions to systemic risk as well as liquidity shortages or disruptions in the provision of credit.
- Federal Reserve and the Bank of England asset purchase programmes lowered government bond yields significantly.
- Large derivatives dealers have used some hard-to-value credit derivatives to transfer credit risk to non-bank financial institutions that could be considered shadow banks.
International banking and financial market developments
Special features
The views expressed here do not necessarily reflect the views of the BIS member central banks.