How it ends

This is not 2008. However, markets have had their confidence in banks rocked, and investors have had to digest significant losses in both equity and credit markets. There may be more problems ahead as investors withdraw from certain bank-related assets and concerns remain about deposits. There is also the risk of credit impairments, losses in other sectors such as real estate, and a wave of banks reporting loan-loss provisions. The interest rate market seems to know how this story ends – rate cuts. If they materialise, fixed income returns will outrun those on cash.