As I had speculated a few weeks back (World Money, March 31, 2008), we could be witnessing the beginning of the end of the sub-prime crisis: most of the bad news has already come out with the publication of major banks' Q1 results. Some have reported more provisions and many are still trying to shore up capital with rights issues, getting money from sovereign wealth funds, or otherwise. To be sure, house prices in the US are yet to stabilise, and the interbank market is still not as liquid as in normal times.
Several other questions also remain and may keep dogging financial markets and their supervisors for years to come. One is the substandard assets central banks in the US and the UK have taken on their books in a bid to improve market liquidity, For example, both have swapped risk-free assets