The Bank of England's financial markets chief has issued a clarion call for banks and investors to buy up the troubled asset-backed securities at the heart of the financial crisis.
It is a "serious puzzle" that no one is buying this "supposedly undervalued" paper, Paul Tucker said, adding that unless these frozen markets restarted soon, the credit crisis would reach a new intensity...
Just as remarkable, however, was his statement about parts of the mortgage-backed securities market, which has ground to a standstill amid fears that the instruments could be tainted by sub-prime defaults.
He said: "Financial markets have swung from a prolonged period of underpricing risk to now plausibly overpricing risk on at least some products.
"The serious puzzle... is why there is a dearth of buyers for the supposedly undervalued paper."
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/03/cnbank103.xml
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