Dysfunctional markets are forcing banks into costly solutions for the European bridge loans they underwrote during the buyout boom, which will hit Q4 results, says Credit Agricole’s Michael Sheren.

“So the amount of places you can turn to for liquidity is shrinking quite significantly,” Sheren says. “That’s why the capital markets and the high-yield bonds and then other funds such as market value funds and hedge funds, insurance companies are very important because they’re basically your last source of deep liquidity in the marketplace.”

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