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Article: West German banks: gloves off. (analysis of banking industry in West Germany) (Finance)
- Article from:
- The Economist (US)
- Article date:
- December 17, 1988
CopyrightCOPYRIGHT 1988 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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NEW YORK
DOOMSTERS, bored with the gyrations of America's monthly trade numbers, can now become mesmerised by the shape of the yield curve-the graph which traces yields on securities of varying maturity. Since late last year yields on 30-year American Treasury bonds have fallen from 10% to just under 9%, while three-month Treasury bills have risen from 6% to more than 8%, narrowing the gap to 70 basis points from nearly 400 basis points. This is America's flattest yield curve for seven years, and, some argue, could signal a recession.
Investors normally demand higher yields on longer maturity securities to compensate them for the greater risk. But the ...