Impact

Explanatory text: The graphics show that the terrorist attack of 11 September 2001 had a telling effect on the capital markets in the short term. In the course of the first ten days, share prices worldwide fell by around 12%, with no big difference visible between US markets and the rest of the world. Shares in insurance companies fell only slightly more than the market as a whole. The striking thing was that the losses were almost completely made up over the next ten days.

There were strong reactions in the fixed-income markets too. Thus, within a few days of trading resuming, US interest rates fell by almost one full percentage point. European interest rates (EURIBOR) also fell by some 50 basis points. The erratic fluctuations in the interest rate set by the Federal Reserve for US Federal Funds illustrate the authorities' great uncertainty. Unlike the situation in the stock markets, the downward trend in interest rates continued. (Source: Datastream, 2004)