Monday, May 11, 2009

Yes Mandy

Some fund managers are critical of bank aggression in setting pricing.

Craig Tyson, investment manager at ING, says banks are effectively gouging to restore their own margins.

The OCR has dropped from above 8% to 2.5% while credit spreads have ballooned from 50 basis points to as high as 350, he says.

Could it be that the spread represents a closer to true reflection of risk while the OCR represents political aspirations?

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