The coronavirus panic is jolting stock markets, with steep drops in major indexes grabbing the public's attention. But behind the scenes, there is less understood and potentially more worrying evidence that stress is building to dangerous levels in crucial arteries of the financial system.
Bankers, companies and individual investors are dashing to stock up on cash and other assets considered safe in a downturn to ride out the chaos. This sudden flight to safety is causing havoc in markets for bonds, currency and loans to a degree that hasn't been seen since the financial crisis of a dozen years ago.
The key concern now, as in 2008, is liquidity: the ready availability of cash and other easily traded financial instruments — and of buyers and sellers who feel secure enough to do deals.