Danger ahead

There is real danger of a market crisis this autumn in spite of the recent surge in equities. How well prepared are fund boards for something calamitous occurring in the months ahead?

An Italian default along with a possible European banking crisis lurk on the horizon as real concerns. Both are distinctly possible although the EU has proven itself to be adept at avoiding catastrophes with last minute, late night deals in Brussels.

Fund boards should be war-gaming a European banking crisis, which is a very conceivable possibility, if Italy defaults, as it well might. Discussion of the precarious situation that several EU banks would find themselves in, should Italy default, needs to be part of funds’ risk oversight discussions.

For more on this story see the August edition of The NED