The Bank of England think that the losses from the current credit crisis could be overstated but at the same time have said that the worry of an impending financial meltdown might however become a self-fulfilling prophecy!
Well that's a comfort isn't it !
The Bank of England thinks that the worries are exaggerated, commenting that the credit markets "are likely to overstate significantly the losses that will ultimately be felt by the financial system and the economy as a whole".
"It will exaggerate to an even greater extent the potential damage to the real economy."
Interestingly, the LSE said that the bak's report might mean that the worst of the "crisis" was over but didn't give much reassurance as they then also went on to say "We now may be just moving into straight forward economic recession".
Is this some high level sitting on the fence? I think so. We're seeing the effects of consumer indebtedness and increased costs of borrowing translate to much higher levels of corporate debt. Don't get bitten or become complacent !
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