Banks seize liquidity but fear brief calm is just eye of storm
The issuance valves were wrenched open this week and a flood of covered bonds and senior FIG paper was released on to a thirsty market. But, far from signifying that the worst is over, this surge — after weeks of inactivity — suggests that borrowers fear conditions will deteriorate further.
In these circumstances, it pays to seize any window of opportunity and issue debt whenever possible.
The principle of "liquidity now, not later" guided financial issuers this week. Funding officials were prepared to be more flexible, no longer quibbling over every last basis point and not insisting on
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