The extreme gyrations in the financial markets in recent days illustrate the erosion of liquidity, which is even more worrying for certain markets such as emerging debt and high yield credit. Faced with the large share buyback requests expected, regulators are watching.

In a few days, market professionals went from complacency to panic, with the volatility index on the Euro Stoxx 50 which returned to its highest levels of the financial crisis.

The financial markets have never experienced such a steep and rapid fall. Within days, operators went from complacency to panic. The volatility index on the Euro Stoxx 50 has returned to its highest levels of the financial crisis, carried by repeated falls and rebounds. Over the past week, the S&P 500 has gained or lost more than 4% in each of its daily sessions, unheard of since the Great Depression of 1929.

The first victims did not take long to emerge. The American company Solus has announced the liquidation of its Sola fund, which specializes in very risky corporate debt, because it is unable to honor the requests for withdrawals from its investors. All markets are affected by the erosion of liquidity, but assets that are illiquid in normal times are even more affected.