Financial marts likely to get more volatile, says UBS economist

Financial marts likely to get more volatile, says UBS economist

KUALA LUMPUR: Financial markets are likely to get more volatile amid rising political risk in major economies, says Paul Donovan, managing director of global economics at UBS Investment Bank.

Problems brought about by the recent recession, such as high unemployment, still exist in major markets like the US and Europe and this means that politicians will continue to run economies, he noted.

This will be seen by way of tighter banking regulations, restriction on capital controls and trade protectionism, for example.

“We are seeing rising political risk coming in, and markets don’t price political risk very well. So we’ll see more volatility as we see these surprise moves coming in,” he said at a roundtable session with reporters here yesterday.

Donovan, who is London-based, said investors are increasingly nervous about where to put their money amid this scenario.

Read more: Financial marts likely to get more volatile, says UBS economist http://www.btimes.com.my/Current_News/BTIMES/articles/20110705234517/Article/#ixzz1RIJHK5zc

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