The Swiss-based institution said losses on US Treasury securities alone will reach $1 trillion if average yields rise by 300 basis points, with even greater damage in a string of other countries. The loss could range from 15pc to 35pc of GDP in France, Italy, Japan, and the UK. “Such a big upward move can happen relatively fast,” said the BIS in its annual report, citing the 1994 bond crash.
Of course, it\’s all because there is talk of the Fed stopping QE. But the winding down of a bubble of artificial prices is never a pleasant thing to watch or go through.