Today, the world is threatened with a repeat of the 2008 financial meltdown – but on an even more cataclysmic scale. This time it is centred in Europe, rather than the United States. And this time, the financial mechanisms involved are not highly comple...

On the surface, at least, the situation in the eurozone today and South Korea in the fall of 1997 look very different. Both are cases of severe economic crisis, to be sure. But the eurozone’s problems stem from high levels of government debt, while Sout...

This year has witnessed a global wave of social and political turmoil and instability, with masses of people pouring into the real and virtual streets: the Arab Spring; riots in London; Israel’s middle-class protests against high housing prices and an i...

They can bring down governments, impoverish entire nations by triggering sharp rises in the cost of their debt, and drive heads of state to rage and frustration. They are the credit rating agencies that, essentially, issue opinions on credit worthiness. P...

Ratings are forward looking opinions of relative creditworthiness, so their performance can be measured by how well they correlated over time with defaults, and by the rate at which they change. While investors, fund managers and advisers may use credit r...

In an extreme case, the poor risks will be the only purchasers of coverage, and the insurer can expect to lose money on each policy sold. This situation, referred to as adverse selection, occurs when the insurer cannot distinguish between members of good-...

Insurance is an economic institution that allows the transfer of financial risk from an individual to a pooled group of risks by means of a two-party contract. The insured party obtains a specified amount of coverage against an uncertain event...

With the second year of the recession upon us, there are a growing number of administrations looking seriously at introducing programmes to help stimulate trade flows and drive economic recovery. While these programmes come in various guises, they all hav...

What do you think is the right framework for a healthcare system? Hassan Khan, founding partner, The Khan Partnership The provision of a high quality standard of care that is delivered through a market efficient system with insurance for all by the stat...

Do you think governments are running the risk of flooding markets with cash? Paul Corcoran, Financial Director, Nord Stream This is a very extraordinary situation and governments are taking the necessary measures to prevent the situation from worsenin...