Turbulence for Financial Capitalism Worries Bank for International Settlements

These days, warning against capitalist collapse is no longer the domain of Marxist economists claiming the sky is falling. The Bank for International Settlements (BIS), the umbrella organization for central banks, is worried about the instability of the financial system based on the introduction of bond and hedge funds. These funds could now account for 50% of financial assets. These instruments can, and do lead to “liquidity mismatches” and “hidden leverage”. What capitalists don’t understand is that what may be prudent for individual capitalist institutions have unintended macro consequences.

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