Monthly Economic Overview – December 2010

摘要

The recent debt tensions in Europe have once again stirred up excitement in global debt markets. Unfortunately, it hasn’t been excitement in the traditional sense of the word. The state of European public sector finances and the perceived possibility of a sovereign default has brought back to the front and centre what expectations investors have of bonds. Whilst this may now seem obvious, it has become apparent that up until the recent ‘crunch’ , the search for yield meant that many of the latent risks of holding bond investments were ignored. Indeed, it was not until after Ireland sought a bail out that some of the ratings agencies decided to downgrade their Irish ratings.