Although the U.S. government and Federal Reserve reacted quickly to the collapse of Silicon Valley Bank, a closer look at the spreads and pricing of bank bonds indicates that investors might have lost some faith in the resiliency of U.S. banks. 

The SEC has proposed changes to standards for classifying the liquidity of fixed-income instruments held by open-end funds. The new approach may not pick up differences between funds and may not signal worsening liquidity amid market stress, however.

Russian bond market losses have cut deep. Still, certain sectors fared better than others. The question now is how trade policy and sanctions may be shifting, and whether there may be greater impact on sectors that have shown relative strength.

Following up on our earlier research on contagion indicators, we looked at how the liquidity of corporate bonds from Eastern European countries (the Czech Republic, Hungary, Poland, Slovakia and the Baltic states) has changed since the start of the Russia-Ukraine war.