Originally published to CNBC | March 6, 2015
In most superhero movies, a dysfunctional government struggles to maintain law and order before a caped crusader comes to the rescue. For European markets, central banks have played the superhero role to great effect in recent years. But what happens if their powers fade? Are we prepared for a return to the volatility of old and a more challenging path for investors?
Since the global financial crisis, markets have had two principal Guardians of the Galaxy: the U.S. Federal Reserve’s Ben Bernanke and the European Central Bank’s (ECB) Mario Draghi. They have been supported, Avengers-style, by a host of other central bankers, who have engaged in an unprecedented, coordinated period of loose monetary policy.
But the days of omnipotent central bankers saving the day are over. That old foe, Greece, is dominating the headlines again but the situation now is very different to 2011. While there may well be further easing measures to come, our superheroes’ marginal impact will be minimal. Continue Reading.