A big drop in global stock markets would only need a "small trigger", warns Citi Bank. Investors worldwide are becoming complacent, with embedded bias meaning global markets are more at risk from "unexpected outcomes to expected events" taking market participants by surprise than from hard-to-predict black swan events. It cites Brexit as an example where the markets were almost certain that the Brexit would vote to remain, making the market shock all the greater when the result came in.
A big drop in global stock markets would only need a "small trigger", warns Citi Bank. Investors worldwide are becoming complacent, with embedded bias meaning global markets are more at risk from "unexpected outcomes to expected events" taking market participants by surprise than from hard-to-predict black swan events. It cites Brexit as an example where the markets were almost certain that the UK would vote to remain, making the market shock all the greater when the result came in.