Saturday, May 19, 2012

Yet another reason for abandoning the Japanese model

In his Telegraph column, Tom Stevenson, a director at Fidelity Worldwide Investment, provides yet another reason for policymakers and financial regulators to switch from the Japanese model to the Swedish model for handling a bank solvency led financial crisis.
Taking a couple of steps back from the immediate crisis, the volatility of markets is something that we are going to have to get used to. 
Indeed, the dramatic ups and downs that have characterised the Japanese market over the 20 years of its post-bubble deleveraging could be the template for Europe as the painful process of mending the region’s balance sheets is endured for years to come. 
This is an extremely difficult environment for investors, especially if your main experience of investing was during the aberrational years between 1982 and 2000, when everything went up and the investment industry’s idea of risk was moving too far from a rising benchmark.

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