Poor Performances Following Central Bank Liquidity Injections

A recent post showed the returns to risk assets following recent central bank interventions has been negative. DailyCapitalist looked a little further back, highlighting failed examples from 2007-2008. The below charts put the announcements into context.

12.12.2007: “Today, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing measures designed to address elevated pressures in short-term funding markets.”

9.18.2008: “Today, the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan and the Swiss National Bank are announcing coordinated measures designed to address the continued elevated pressures in U.S dollar short-term funding markets.”

6.29.2011: “Today, the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan, and the Swiss National Bank are announcing coordinated measures designed to address the continued elevated pressures in U.S. dollar short-term funding markets.”

11.30.2011: “The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system.”

Source: DailyCapitalist

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Tagged as: Fed