BIS warns of gap between cautious banks and buoyant markets
Report says exuberant market conditions may belie underlying risks
The Bank for International Settlements warns the past quarter has seen a growing divide between compressed spreads in credit markets and tighter lending conditions by banks.
“A gap opened in the way that capital markets and banks were pricing credit risk,” noted Claudio Borio, head of the BIS monetary and economic department, in a call with journalists.
The BIS quarterly review, published on December 7, highlights how in the past, conditions in the banking sector and conditions in debt markets
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