The coordinated measures taken in recent weeks by governments and central banks worldwide seem to have had a favourable impact on financial markets as the premia on banks’ CDS contracts have fallen sharply, money market rates have fallen very significantly, spreads have narrowed and volumes traded on money markets seem to have increased somewhat while some (still smaller than usual in aggregate) term money market transactions have taken place.
Despite these improvements, the situation remains far from normal. BIS Review 147/2008  7  6. Final remarks  Uncertainty is at the root of the financial market turmoil that we are currently experiencing. Such uncertainty translated into a severe under-appreciation of the risks associated with certain classes of financial instruments and institutions.