, Columnist
Move Over VIX, Pain Has a New King
Basis-swap spreads have become a good measure of European banks' shrinking capacity to provide loans in Asia.
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Rest in peace, VIX. You're no longer the fear gauge for global markets.
The Bank for International Settlements has found a better barometer to capture the nervousness that starts as a slight reduction in global banks' leverage, is magnified by European lenders as a dollar squeeze in Asian supply chains, and reverberates around the world as a financial tightness felt by everyone.