An uncomfortable question is being asked around offices in the City at the moment: “Is it all feeling a bit 2008-y to you?” It is easy to see why the current economic turmoil echoes the prelude to the 2008 financial crisis: sudden changes to market conditions are beginning to expose issues with investment strategies previously considered safe.
This all comes following a decade of unusual economic circumstances; incredibly low interest rates, plenty of liquidity and investors with more capital seeking increasingly high risk yield. Many businesses are not yet properly positioned for the change in market conditions and may find themselves exposed to unwanted risk that they can no longer pass off to counterparties.
