All Eyes on the ECB - by Kerry Capell and Mark Scott
Does the European Central Bank know something the rest of the world doesn't? That was the question on the minds of investors and traders in Europe on Aug. 10 as the ECB, for the second day running, injected extra cash into the European banking system with the aim of restoring calm to jittery credit markets.
The real problem is the lack of disclosure. Banks have been trying to reassure the market that their exposure to asset-backed securities is manageable. "But the market, at the moment, just doesn't buy it," says CreditSights' Adamson. Investor skepticism is understandable. With major banks such as BNP Paribas claiming the volatility in the credit markets has made it impossible to value their investments, it's little wonder investors worry whether the worst has yet to come.
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