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BIS Quarterly Review – September 2011

The BIS Quarterly Review for September 2011 shows how a weaker outlook for the global economy drove down the prices of risky assets and fuelled concerns about sovereign risk.

In addition, it features three articles:

-Trade balance and real exchange rate: movements in real exchange rates have only limited effects on the trade account of some countries.

-Global credit and domestic credit booms: rapidly growing foreign currency and/or cross-border credit could undermine the efforts of authorities to dampen credit growth.

-The rise of sovereign credit risk has increased the vulnerability of banks to funding shocks.