Global liquidity flows less sensitive to risk – NBER paper
Capital flows are more stable despite shift into bonds since global financial crisis
Capital flows have become less sensitive to changes in risk sentiment in aggregate, notwithstanding a rise in bond finance, which is typically a less stable source of funding than bank credit, new research finds.
A working paper published by the US National Bureau of Economic Research examines risk sensitivity in the context of the changing composition of capital flows since the 2008 global financial crisis. The paper notes that patterns of global liquidity, made up of bank lending and bond
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