I will argue that there is an interplay between these two developments that help us to understand the relationship between macro fundamentals and the emergence of the financial crisis. The first measurable development relates to the price side and is reflected, as I mentioned before, by exceptionally low risk premia in virtually all markets.
Of course, one could provide specific explanations to any particular market that could rationalize the decline in individual risk premia. One striking feature has been, however, the persistent and  2  BIS Review 49/2009  synchronized decline in risk premia across all markets.