Nonetheless, we don’t have full visibility of those risks and there has been a notable build-up of debt overall in some emerging markets. The other factor of importance is a set of structural changes in capital markets, where there are two key features worth noting. One is the expanding role of asset managers.
The mind-set was that only a fool had personal savings, and the quick and the clever were in debt up to their eyeballs. Indeed, those attitudes were sensible from an individual’s point of view, with negative real interest rates and rising asset prices. Those attitudes no longer make sense.