Canary or canard?
The suspension of several speculative bond funds carries only faint echoes of the onset of the credit crunch
THE three investment funds from which BNP suspended redemptions in August 2007 held less than 0.5% of the money the French bank managed at the time. Yet these humble entities turned out to be the proverbial canaries in the coal mine: their spasm was one of the first signs of the impending credit crunch. The question of the moment is whether several similarly obscure funds that recently announced forced liquidations are canaries too. Do their woes reveal financial fault-lines, or did they just take exceptional risks?
This article appeared in the Finance & economics section of the print edition under the headline “Canary or canard?”
From the December 19th 2015 edition
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