Banks intervene to calm markets
Tuesday, 14 August 2007
LONDON, Aug 13 (Reuters): Investors jumped back into riskier assets Monday, reassured by central bank moves to inject money into the banking system, driving stocks higher and raising demand for emerging market debt.
The Bank of Japan, front left, in Tokyo pumped more money into markets Monday.
Caution remained on currency markets, however, where the yen strengthened as popular borrowing-based "carry" trades unwound.
Markets have been rocked for weeks by news of problems in banks and funds exposed to risky investments in US mortgage and asset-backed markets, triggering fears that the cheap credit that has helped fuel global growth might dry up.
Central banks in Europe, Asia and North America injected huge sums into the money market late last week to prevent money markets seizing up as the number of financial institutions revealing exposure to crumbling credit markets swelled.
The Bank of Japan, front left, in Tokyo pumped more money into markets Monday.
Caution remained on currency markets, however, where the yen strengthened as popular borrowing-based "carry" trades unwound.
Markets have been rocked for weeks by news of problems in banks and funds exposed to risky investments in US mortgage and asset-backed markets, triggering fears that the cheap credit that has helped fuel global growth might dry up.
Central banks in Europe, Asia and North America injected huge sums into the money market late last week to prevent money markets seizing up as the number of financial institutions revealing exposure to crumbling credit markets swelled.