It is not only that the financial markets distort real relationships. The relevant adjustments are often sudden and violent, as in the case of the European Monetary System early in the nineties, or of Mexico.
It is precisely such crisis-like upheavals that prompt the question of whether and, if so, to what extent today’s financial markets have become more unstable, and whether systemic risk has increased? Some people fear that the advance of professionalism among fund managers and institutional investors, in particular, might increase the incidence of such dangers.