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Financial crisis update
Thu, Apr 24 2008, 08:39 GMT
by Danske Research Team
The aim of this publication is to provide an overview of current stories/issues in relation to the financial market crisis. We update this publication regularly; the previous Financial crisis update was published on April 2.
- • The relief rally has continued with declining fear of systemic risks in the financial system and increased risk appetite. The escalation of the financial crisis in mid-March and the downfall of Bear Stearns was followed by a relief rally brought on by a series of Fed initiatives, JP Morgans offer to take over Bear Stearns, and better than feared results from some US investment banks.
- • Most markets have shown continued improvement in recent weeks, but the improvement is not universal. In fact tension on money markets continues to rise. On top of this credibility of Libor calculations have been questioned.
- • IMF has recently estimated that losses stemming from the US mortgage crisis may approach USD 1 trillion. Falling US house prices and rising delinquencies may lead to USD 565bn in mortgage-market losses according to the IMF in its latest Global Financial Stability report.
- • The financial crisis has abated recently, but it can flare up again with little or no warning. And the continued problems on money markets are a major concern. We doubt that we have seen the last bout of rising risk aversion and growing fear of systemic risks in the financial sector. However, what, when and how strong the next escalation of the financial crisis will be are questions tinged with much uncertainty.
Key things to watch going forward:
- • 24 April - Credit Suisse Q1 2008 result
- • 29 April - Deutsche Bank Q1 2008 result
- • 6 May - UBS Q1 2008 results
- • 13 May - MBIA Q1 2008 results
- • 14 May - Freddie Mac Q1 2008 results
- • 14 May - Fannie Mae Q1 2008 results
- • A large number of European banks will also be reporting results in the next couple of weeks
- • Earnings season in the US will continue in the coming days, but the large investment banks have all reported.
- • How will the already implemented initiatives from the central banks work? And what new initiatives are in the pipeline from central banks?
- • Early May - US Fed Senior Loan Officers Survey on Bank lending practices
- • 9 May - ECB Bank Lending Survey
Published on Thu, Apr 24 2008, 08:49 GMT
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