An Yun, co-investment director of Lubomai Fund and general manager of the Public Equity Investment Division II, said that judging from the information currently available, the current risk related to US debt is not a systemic crisis, but a short-term disturbance in terms of liquidity and confidence. As to why the market reacted violently to liquidity issues, An Yun believes that related concerns stem more from “vagueness and impact.” “Liquidity issues are complex and difficult to see through at a glance, and once the short-term impact of insurance is severe, it is easy to be misinterpreted as a systemic financial crisis; however, historical cases — UK Pensions, Silicon Valley Bank, etc. — all show that liquidity shocks can be quickly intervened by the central bank, which is fundamentally different from debt crises requiring high leverage.” At the same time, supply pressure should not be excessively amplified. An Yun said that the scale of US corporate bond issuance declined significantly in July compared to June. This is not a “supply flood” that the market is concerned about; part of the pressure to issue US bonds in the third quarter was released in July, and subsequent supply pressure is expected to ease marginally.

An Yun, co-investment director of Lubomai Fund and general manager of the Public Equity Investment Division II, said that judging from the information currently available, the current risk related to US debt is not a systemic crisis, but a short-term disturbance in terms of liquidity and confidence. As to why the market reacted violently to liquidity issues, An Yun believes that related concerns stem more from “vagueness and impact.” “Liquidity issues are complex and difficult to see through at a glance, and once the short-term impact of insurance is severe, it is easy to be misinterpreted as a systemic financial crisis; however, historical cases — UK Pensions, Silicon Valley Bank, etc. — all show that liquidity shocks can be quickly intervened by the central bank, which is fundamentally different from debt crises requiring high leverage.” At the same time, supply pressure should not be excessively amplified. An Yun said that the scale of US corporate bond issuance declined significantly in July compared to June. This is not a “supply flood” that the market is concerned about; part of the pressure to issue US bonds in the third quarter was released in July, and subsequent supply pressure is expected to ease marginally.