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As the pool of euro assets deemed "safe" dwindles, more countries may face such runs.
Many overseas investment institutions are bound by their rules to dump assets deemed to be in default.
That makes sense in principle, but assets deemed to be low risk — like AAA mortgage securities — turned out to be high risk.
Many firms in the industry were state-owned or heavily protected by governments keen to preserve assets deemed vital to national interests.
They also take issue with the so-called risk weights in the Basel rules, which allow banks to hold less capital against assets deemed less risky, calling that system flawed.
Still, the U.S. jobs report started a global move away from assets deemed risky and into those deemed havens — among them the yen, a traditional beneficiary of market nervousness.
Similar(42)
In short: one asset deemed to be below its current market value could lead to a perception that all the assets are similarly worthless.
Once the deals close by the end of the year, Citigroup will have shed roughly half of the troubled assets it deemed nonessential in the aftermath of the financial crisis two years ago.
The current rule on when assets are deemed to be impaired, and thus must be written down, has been criticized because it allows so much discretion to executives that write-downs can seem arbitrary.
Hiddleston spoke about his assets ― deemed too risky to show in the American broadcast of "The Night Manager" ― in an interview with W magazine earlier this year.
"Why Risk Managers Should be Spymasters," by ProPublica's Jesse Eisinger, on how Wall Street risk managers have been coöpted by their masters, as well as the paradoxical effect of "risk weightings" — the less risky an asset is deemed, the more crowded a trade becomes, thereby raising the odds of a bubble.
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