The credit cycle begins to show the first signs of what, in other times, were periods of credit tightening, especially due to an incipient deceleration in household financing. For these reasons, a reversal in the capital flows of banks from subsidiaries in the emerging world to meet liquidity and solvency requirements in their headquarters is something to closely monitor.
We are witnessing a growing use of unconventional instruments to deal with the crisis in the developed world. We have experienced an unprecedented increase in U.S. liquidity windows to avoid disruptions in the financial system and to recapitalize it.