They worry the high leverage in the system has not been reduced
Today is exactly one year to the day that United States investment bank Lehman Brothers collapsed, and for a majority of fund managers surveyed around the world, the financial crisis that failure sparked is not over yet.
Of the 153 largest institutional investors polled by business advisory firm FTI Consulting, 64 per cent felt that the crisis had not ended. Asian investors, including some from Singapore, were slightly more optimistic, with 62 per cent believing the crisis had some way to go.
British, US and Australian investors were the most pessimistic, with 73 per cent, 76 per cent and 80 per cent of investors respectively believing the crisis had not ended.
Commenting on the survey, FTI’s president and chief executive Jack Dunn said: ‘Anecdotal evidence gathered during the survey suggests that across the globe, investors were still concerned the amount of leverage in the system that caused the original problem has not been reduced.
‘The prevailing view was that there has been so much economic stimulus that markets cannot help but go up,’ he said. ‘The concern was what would happen when government money runs out.’
The paradox, said Mr Dunn, is that despite the negative outlook, global equity markets have rallied significantly in recent months. Continue reading
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