Вы находитесь на странице: 1из 3

Bondholders would lose more than $1 trillion if yields spike - BIS | Reuters

EDITION: U.S.

Register

Sign In

Search News & Quotes

Home

Business

Markets

World

Politics

Tech

Opinion

Breakingviews

Money

Life

Pictures

Video

ARTICLE

COMMENTS(2)

Bondholders would lose more than $1 trillion if yields spike - BIS


Recommend 24 people recommend this. Sign Up to see what your friends recommend. Tweet 1

By Alan Wheatley, Global Economics Correspondent


LONDON, June 23 | Sun Jun 23, 2013 10:00am EDT

(Reuters) - Bondholders in the United States alone would lose more than $1 trillion if yields leap, showing how urgent it is for governments to put their finances in order, the Bank for International Settlements said on Sunday.
The Basel-based BIS lambasted firms and households as well as the public sector for not making good use of the time bought by ultra-loose monetary policy, which it said had ended up creating new financial strains and delaying rather than encouraging necessary economic adjustments. The BIS, a grouping of central banks, was one of the few organisations to foresee the global financial crisis that erupted in 2008. Since then, government bond yields have sunk as investors seek a traditionally safe place to park funds, regulators tell banks to hold more bonds and central banks buy bonds as a means of pumping money into vulnerable economies. The BIS said in its annual report that a rise in bond yields of 3 percentage points across the maturity spectrum would inflict losses on U.S. bond
Login or register Follow Reuters
Latest from My Wire

Share

Share this Email Print Related News

Bernanke bond announcement 'inappropriately timed:' Fed's Bullard


Fri, Jun 21 2013

Bernanke says Fed likely to reduce bond buying this year


Wed, Jun 19 2013

Wall St. drops after Bernanke hints at slowing stimulus


Wed, Jun 19 2013

investors - excluding the Federal Reserve - of more than $1 trillion, or 8 percent of U.S. gross domestic product. The potential loss of value in government debt as a share of GDP is at a

IMF urges repeal of 'ill-designed' U.S. cuts


Fri, Jun 14 2013

Facebook

Twitter

RSS

YouTube

record high for most advanced economies, ranging from about 15 percent to 35 percent in France, Italy, Japan and Britain.

RECOMMENDED VIDEO
Kaeser is new king of Siemens (1:46)

"As foreign and domestic banks would be among those experiencing the losses, interest rate increases pose risks to the stability of the financial system if not executed with great care," the BIS said. "Clear central bank communication well in advance of any moves to tighten will be critical in this regard."

Bank of Japan stands pat, leaves door open for market calming steps
Tue, Jun 11 2013

Analysis & Opinion Bernanke should be international man of mystery

Squatters right, says student

http://www.reuters.com/article/2013/06/23/economy-global-bis-idUSL3N0EW3EZ20130623[5/08/2013 6:09:11 a.m.]

Bondholders would lose more than $1 trillion if yields spike - BIS | Reuters

toilet designer

Underlining the BIS's warning, U.S. bond prices slumped after Fed Chairman Ben Bernanke said on Wednesday that the U.S. central bank expected to reduce its pace of bond buying, now $85 billion a month, and cease purchases completely by mid-2014 if the economy continues to improve.

Miley Cyrus talks image change and controversy

Bernanke sets major challenges for his successor

Related Topics

The best Nokia Lumia ever? See what else everyone is


(Nokia Blog)

The BIS acknowledged that bond yields were unlikely to rise 3 percentage points overnight. But it noted that big moves can happen quickly: in 1994 yields in many advanced economies rose by about 2 percentage points in the course of a year.

Currencies Bonds News Bonds Markets

A Singapore strategy
(HSBC Global Connections) [?]

h JUST GET ON WITH IT

FINANCIAL COMMENTARIES AND GUIDES


Test-drive our CFD trading platform, without registering your details. (IG Markets) Test-drive our CFD trading platform, without registering your details. (IG Markets) Test-drive our CFD trading platform, without registering your details. (IG Markets) Test-drive our CFD trading platform, without registering your details. (IG Markets) Test-drive our CFD trading platform, without registering your details. (IG Markets)

Brushing aside the contention that austerity is counterproductive, the BIS said countries must redouble their efforts to make their debt manageable because growth alone will not do the job. "Over indebtedness is one of the major barriers on the path to growth after a financial crisis. Borrowing more year after year is not the cure," the report said. The fiscal adjustments required in rich countries are especially sizeable when projected increases in age-related spending are taken into account. Indeed, the adjustments are so large that governments are likely instead to water down entitlements such as pensions, the report said. Not only has the debt of households, firms and governments increased as a share of GDP in most countries since 2007, but debt-service ratios are now higher in most rich countries than the 19952007 average - despite low interest rates. The country with the highest debt ratio is Sweden. And governments have balked at labour and product market reforms, despite overwhelming evidence that making it cheaper to lay off workers and reducing the barriers to competition in sectors such as retailing would deliver a big boost to growth. Expecting monetary policy to solve these problems is a recipe for failure, the BIS said.

READ

Stephen Cecchetti, the BIS's chief economist, said central banks could not do more without compounding the risks they have already created. "It is others that need to act, speeding up the hard but essential reform and repair work to unlock productivity and employment growth. Continuing to wait will not make things any easier, particularly as public support and patience erode," he said on a conference call.
CURRENCIES Recommend BONDS NEWS BONDS MARKETS

1 2 3 4 5

White House holds high-level meeting over security threat


03 Aug 2013

U.S. grand jury probing contractor that vetted Snowden: WSJ


03 Aug 2013

U.S. expected to say accused Fort Hood shooter carefully planned attack
12:13am EDT

24 people recommend this. Sign Up to see what your friends recommend. Link this Share this Digg this Email Reprints

Restaurant chain says salad linked to virus no longer served


03 Aug 2013

Tweet this

Thousands rally to support embattled Tunisia government


03 Aug 2013

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Comments (2)
birder wrote:
Snowden leaves Moscow airport, gets refugee status in Russia

DISCUSSED

228 197

And the Fed stands to loose the most having bought the most. Serves them right.
Jun 23, 201310:51am EDT--Report as abuse

Obama to propose grand bargain on corporate tax rate, infrastructure

huckel wrote: The FED did wonders in helping the economy recover from a disaster. Mr Bernake has got the timing right to start pulling out of the buying program. But it will mean that there will be a new time of volatility

http://www.reuters.com/article/2013/06/23/economy-global-bis-idUSL3N0EW3EZ20130623[5/08/2013 6:09:11 a.m.]

Bondholders would lose more than $1 trillion if yields spike - BIS | Reuters

132

Threat to U.S. embassies appears al Qaeda-linked: lawmaker

ahead as the economy learns to walk again on it own 2 feet. Thank you Mr Bernake for helping us cross this difficult time.
Jun 23, 201311:18pm EDT--Report as abuse

This discussion is now closed. We welcome comments on our articles for a limited period after their publication.
SPONSORED LINKS

See All Comments

Reuters.com Legal Support & Contact Account Information Connect with Reuters About

EDITION: U.S.

Back to top

Business

Markets

World

Politics

Technology

Opinion

Money

Pictures

Videos

Site Index

Bankruptcy Law Support Register

California Legal

New York Legal

Securities Law

Corrections Sign In Facebook Terms of Use LinkedIn RSS Podcast AdChoices Newsletters Copyright Mobile

Twitter Privacy Policy

Advertise With Us

Thomsonreuters.com About Thomson Reuters Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Investor Relations Careers Contact Us

Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

http://www.reuters.com/article/2013/06/23/economy-global-bis-idUSL3N0EW3EZ20130623[5/08/2013 6:09:11 a.m.]