BNP AM

The official blog of BNP Paribas Asset Management

Why we shouldn’t assume that populism has peaked

populism

With the benefit of hindsight, Brexit and the election of Trump are not surprising

  • Developed economies are polarised: the gains from globalisation have not been evenly shared
  • Financial crises hurt:  the Global Financial Crisis (GFC) has had a lasting impact on living standards
  • Failure to deliver: traditional politics and politicians have not done enough to counter some of the excesses of globalisation

We shouldn't assume that populism as peaked

  • It's far from obvious that those who voted for Brexit and Trump will get what they wanted
  • There's no guarantee that those who have rejected the politicial establishment will come back into the fold
  • …but they could turn to more radical alternatives

There are profound economic and market implications

  • Bond investors: are you confident G10 sovereigns will not restructure or inflate away their debts?
  • Equity investors: are you confident that governments will not nationalise some industries, heavily regulate others, make frequent use of windfall taxes, etc.?
    Published on 7 April 2017

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