Liquidity Crunch Is the New Bubble Gripping Credit Investors
- BofAML survey finds fears have shifted from two months ago
- ‘The concern is a more pervasive rush for the exit,’ bank says
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From excess to scarcity, a liquidity crunch has climbed to the top of the credit market’s wall of worry -- a volte face from June when debt investors fretted bubbles.
Angst over “vanishing” liquidity is now the chief concern among credit buyers in Europe, according to Bank of America’s client survey this month. Late-cycle worries, European political risk and sharp price moves this year -- particularly in Italy -- are feeding fears money managers will be unable to relinquish their positions in the next downturn.