Profiting from divergence

Interest Rates


The credit crisis of 2007 challenged some long-held assumptions about how greatly central bank policy can influence the behaviour of financial markets and institutions. Efforts by the US Federal Reserve, the European Central Bank (ECB) and the Bank of England (BoE) to inject more than $1 trillion into global money markets to boost liquidity throughout the second half of the year met with limited success as banks remained stubbornly reluctant to lend to each other. That reticence was best illu