Bankers and Regulators Voice Fears on Bond Market Volatility
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Barney Frank, former representative from Massachusetts and an author of the Dodd-Frank Act, says fears over bond market volatility are overstated. CreditChip Somodevilla/Getty Image
Wall Street chieftains, huge investment firms and top bank regulators are all sounding the same alarm.
In recent months, they have been warning that the world’s bond markets, where companies and countries borrow trillions of dollars, are in danger of breaking down.
Their fear is that in an event like a surprise increase in interest rates, trading could rapidly dry up, causing violent movements in bond prices and even disrupting the functioning of the market. According to this view, the destabilizing volatility in the bond market could make it harder and more expensive for companies and countries to borrow…
Bankers and Regulators Voice Fears on Bond Market Volatility
