Glenn Stevens, Governor of the RBA, has had a speech distributed by the BIS in today’s email alert. It covers the Australian economy, with particular reference to the market waves last week.
The speech is here. It is worth a read but, to summarise, from my reading he agrees with everything I have said over the last few days – the credit problem arising from this is distributed through the system but is small in total. The problem is that no-one is sure where it is – causing liquidity to dry up.
The real economy is unaffected.
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