There are some concerns that the shift to higher volatility may not necessarily be orderly against the background of fears of protectionism, increased geo-political risks, Page 3 of 8  and uncertainty over the pace of monetary policy normalisation. This may lead to an abrupt tightening of financial conditions, which in turn may curtail global growth.
Even with some recent corrections, asset valuations remain generally stretched, and currency mismatches arising from large amounts of USD denominated debt incurred to take advantage of low rates (by both corporates and sovereigns), could make financial markets vulnerable to financial conditions tightening at a faster pace than currently anticipated.