1Y LIBOR-OIS spread continues to widen …

Close to levels we last saw summer 2007. Anytime the spread is much higher than 10 bps there is stress in the markets and something is gonna give. Sooner rather than later.

The big banks get bigger …

The Financial Stability Board have published their list of banks considered “too big to fail” [ .pdf ].

There are now 29 global systemically important financial institutions or G-Sifs that are considered integral to the stability of the world’s banking system. These institutions – 17 European, eight US , three Japanese and one [...]

Whats got The Fed spooked?

US Banks have to stress test their portfolios, forecasting the impact of The Fed’s worst case assumptions – US unemployment hitting 13% and a severe EU recession, although a drop of some 6.9% in European GDP is pretty darn severe.

The Fed took pains to emphasise the scenarios were “not forecasts” but you’ve [...]