A sharp decrease in market functioning is noted by the Bank of England in its latest Financial Stability Report.

US government bonds were the only primary market — out of 15 — described as ‘functioning’ in May; eight were described as impaired. The month before, eight were functioning and two were impaired. Highly recommend a closer inspection of the table to the right – though even at a distance, you get the idea.

Commercial property is the biggest headache globally. Indeed, the housing market as a whole makes an appearance in two of the six key risks noted by the Bank:

1. Exposure to european sovereign debt;
2. A sustained reversal in investor risk appetite;
3. Investors divesting Europe, buying Asia;
4. Defaulting borrowers, esp. commercial property;

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