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rise in risk aversion

Page history last edited by PBworks 11 years, 10 months ago

 

This is one of the major developments to come out of the housing bust of 2007, and the credit crisis of 2007-8.

 

As investors shy away from all sorts of US financial innovations such as asset backed mortgages,  and as we see a general distrust of fancy derivatives.... lending standards are getting tighter, and as a result we are seeing investors move away from risky investments.

 

 

 

Currency:

 

Growing risk aversion has prompted investors to focus again on economic fundamentals and punish the currencies of countries that have high current account deficits

 

 

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