A big drop in global stock markets would only need a "small trigger", warns Citi Bank. The US Federal Reserve has been trying to get the economy moving again by cutting interest rates and buying up bonds from banks that are holding back on lending - but it is not clear whether this will 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.
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.