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25 years, 25 CEOs: Jerome Booth, co-founder, Ashmore Investment Management
07 February 2012
To celebrate its 25th anniversary, Global Investor/ISF interviewed 25 CEOs. As the developed economies struggle under the weight of debt and economic stagnation, Jerome Booth explains why emerging markets could provide useful lessons
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Jerome Booth
Ashmore Investment Management
There was an intellectual failure precipitating the crisis which needs a regulatory response but I’m concerned the regulatory response may go too far in some ways and not far enough in others. Risk needs completely redefining.
I’m worried, for example, that Solvency II, which assumes incorrectly that Eurozone sovereign bonds are safe, and penalises investment in less risky and diversifying investments like emerging sovereign debt, will be applied to pension funds. It would constitute financial repression should institutional savings be forced to invest where governments wants help for a crippled financial system.
Behind the current regulatory drift is a mistaken conception of risk that assumes an ascending risk scale from US and European government bonds upwards. Insurers [who are already covered by Solvency II] are already upset at the systemic risks created by forcing everyone to do the same thing.
The...
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