31st October 2016
Allianz Global Investors: Risk targeting: a friend in troubled times
The US Federal Reserve’s response to the 2008 Global Financial Crisis, in delivering excess liquidity through a policy of Quantitative Easing (QE), was the catalyst for a sustained decline in asset price volatility. Whilst the US concluded this policy in 2014, more recently other global central banks have either embarked on their own version, or reignited previous programs, e.g. Europe, Japan and the UK.
The increased globalisation of the economy over the last few decades has facilitated the free movement of capital. In turn, this has enabled QE policy to be exported around the world, prompting volatility in even very high risk assets, such as those in emerging markets, to become artificially supressed.
You need to be logged in to comment on this article