fed speech, 2006-05-16
This wave of innovation in credit markets has occurred in an environment in which:- the price of insurance against credit risk has fallen substantially as realized losses have declined and perceptions about corporate credit fundamentals have improved;- volatility has declined in many different types of asset prices, as have expectations of future volatility- the number of bank failures in the United States have fallen to levels not seen in a generation or more, and the price of protection against default by the largest financial institutions has fallen to levels that suggest a very low probability of failure; and- overall liquidity in markets has been high.
Sentiment: neutral
Topic: financial_stability