Discounting [32]

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Bullet points include: Sudden jump in uncertainty in money markets and credit markets in late July and early August 2007 Loss of risk appetite led to reining in of leverage banks were willing to extend to certain active quantitative hedge fund managers Knock-on position unwinds in ‘crowded’ trades led to significant losses for some managers Term structure of Euribor versus Eurepo Source: Kemp (2009) and Bloomberg

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