The Decade of Deleveraging Didn’t Quite Turn Out That Way

Bloomberg has a very interesting interactive article that describes the increased leveraging of the global financial system. Even though in some cases banks and other financial institutions has their balance sheets slimmed down, especially as off-balance sheet liabilities are concerned, the risk has not decreased. It has just shifted to other places, which are not backed by government implicit, or explicit (in case of deposits) guarantees.

In our view this picture of failed deleveraging presents considerable concern for debt holders. As banks (e.g. depositors) and governments are shielded by legal provisions the debt holders are likely to be left out in the cold. Therefore Deriveum is particularly appropriate for those of the debt holders that want to achieve certainty and get higher yield out of their dollars.

Please click on the picture to read the full article.


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