It was only hours after US president Donald Trump told us, in an address from the Oval Office last week, “this is not a financial crisis”, when markets began acting very much as though it was.
Investors dumped assets resulting in the worst trading day since 1987. Bond markets seized up, putting pressure on banks, and the US Federal Reserve swooped in with yet more emergency funding for short-term borrowing markets (known as repurchasing or repo markets), a tactic which suggests we may see quantitative easing to infinity — and beyond.
So when exactly does a coronavirus-triggered corporate market meltdown officially turn into a full-blown financial crisis? That’s a question many market participants, and banks in particular, must be asking themselves.