During the panel, Sir Michael shared his thoughts on the impact of unconventional monetary policy on the credit market. He assessed the potential effect of quantitative tightening, while highlighting that Chinese investment through the Belt Road Initiative (BRI) is estimated to put more money into the global economy than QE.
He also provided his perspective on recent volatility in equity markets, noting: “You have a lot more algo traders. The average holding period for stocks has gone down, leading to a huge churn in the equity market. I can see why you have a 5% drop in that you almost have a perfect storm. You have less balance sheet able to be committed by the banks, you have the algos pushing stocks around. But that’s why you do the fundamental credit work. The market structure is pushing a lot more volatility, which is good if you’re trying to take advantage of that.”