Risk

The first three months of 2020 go down in history as the worst Q1 ever for global stock markets. Many measures of market stress reached levels last seen in the financial crisis and some price moves were on a scale not witnessed since the great Crash of 1929. The surge in market volatility reflects one of the most abrupt adjustments in investor sentiment ever seen...

As the coronavirus continues to impact the global economy, Charles Hepworth, Investment Director, GAM Investments, discusses the risks that a second wave of epidemics could pose in the future.

The operating environment for European banks will be challenging, but resolution and senior debt bail-in are extremely unlikely. Banks will have to be a key piece of the puzzle as authorities seek to minimise long-term economic loss.

Markets last week scrambled to come to terms with two major exogenous shocks: the spread of the COVID-19 virus and the oil price slump. Such shocks to the global economy are rare. Two huge and unconnected shocks coming within days of each other is an unprecedented event.

This new risk indicator, based on a concept derived from the classic Sharpe ratio, integrates the already existing range of prudential risk measures into the analysis of the strategic asset allocation process and its optimization.