Short-term US interest rates turned negative on Thursday as banks frantically stockpiled government securities in order to polish their balance sheets for the end of the year.
The development highlighted the continuing distortions in the financial system more than a year after Lehman Brothers’ failure triggered a global crisis.
The growing appetite for short-term government debt reflects an effort by banks to present pristine year-end balance sheets to regulators and investors – an effort known as “window dressing” on Wall Street, analysts said. (more)
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