Financial Times FT.com

Year-end squeeze fears start to recede

By Krishna Guha in Washington, Saskia Scholtes in New York, Ralph Atkins in Frankfurt and Gillian Tett in London

Published: December 19 2007 15:12 | Last updated: December 20 2007 00:20

Fears of a year-end money market funding crisis eased on Wednesday as central banks’ emergency operations showed signs of working, but market relief was swiftly undermined by fresh concerns over bond insurers.

Standard and Poor’s, the credit ratings agency, downgraded one bond insurer and said five others could lose their top credit ratings in a move that unsettled equity markets and sparked a new flight to safety rally in bonds.

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