Capital Markets Snapshot: Interest rates likely to rise sharply

BUT ANOTHER CRASH IS UNLIKELY, AS MOST BORROWINGS ARE WELL-STRUCTURED

By Cain Brothers

The capital markets are in an interesting but fragile equilibrium that is likely to experience a significant shift in the near future.

The markets achieved stability after the tumult of 2008-09, but that stability resulted from aggressive intervention by central banks, which have shifted unsustainable borrowing from the private sector to unsustainable borrowing to the public sector.

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