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<\/p>\nTony Hall shares insights into how to reassess risk, liquidity and capital flows and diversify with intent.<\/p>\n
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At the recent Standard Chartered Global Markets Forum, 2026 \u00a0in Hong Kong, a consistent theme emerged across conversations with clients, policy makers and experts: we\u2019re no longer managing risk within a global system, but more actively managing it in an increasingly fragmented one.<\/p>\n
Behind closed doors, the discussion wasn\u2019t about the headlines of the day. It focused on the deeper, structural forces now shaping global markets, and how they are changing the way risk is priced, managed and monetised.<\/p>\n
Three reflections stand out.<\/p>\n
01<\/p>\n
Risk requires more active management<\/p>\n
For decades, global markets operated on a relatively stable set of assumptions: global integration would deepen, capital would flow efficiently, and risk could be diversified within a broadly coherent system. That assumption no longer holds.<\/p>\n
Today, geopolitical fragmentation, sanctions and shifting alliances are not just something absorbed by the markets \u2013 they are core drivers of market behaviour. Policymakers are prioritising resilience over efficiency, and security over pure growth.<\/p>\n
The implications could be significant. Risk is no longer something to hedge passively. It is something that moves quickly across asset classes and geographies. Increasingly, it needs to be managed dynamically, not modelled statically. For market participants, this means one thing: agility has become a core advantage.<\/p>\n
02<\/p>\n
Structural divergence is creating both friction and opportunity<\/p>\n
Look beyond the headlines, and a more complex picture emerges. We are seeing diverging growth paths across regions, persistent inflation volatility driven by supply-side constraints and increasingly difficult trade-offs for central banks balancing growth, inflation and currency stability.<\/p>\n
At the same time, capital is not retreating, it is reallocating. Large-scale investments into areas such as AI and strategic infrastructure are creating pockets of strong, self-sustaining momentum, often disconnected from broader macro cycles.<\/p>\n
In global markets, this shows up clearly as greater dispersion across rates and currencies, a widening gap between short- and long-end yields and more pronounced relative-value opportunities across regions.<\/p>\n
For instance, portfolio opportunities are arising in non-US assets that are potentially less correlated than they have been historically. In fixed income, the sharp divergence in yields between short and long dated assets is being driven by factors such as sustained government fiscal deficits and central bank policy parameters.<\/p>\n
In other words, fragmentation is not just a source of risk. It is a source of alpha.<\/p>\n
03<\/p>\n
The financial system is evolving \u2013 slowly, but meaningfully<\/p>\n
One of the most important, and often underappreciated, shifts is happening beneath the surface: the gradual reconfiguration of the global financial architecture. The increased use of financial sanctions and asset restrictions has prompted a rethink of reserve composition, a gradual move toward greater currency diversification and the steady development of parallel liquidity pools and financial channels. Alternative reserve currencies such as China\u2019s renminbi are gaining prominence, boosted by a deepening pool of offshore liquidity and the steadily increasing use of the currency in trade payments (as our report on renminbi for corporates<\/a> shows).<\/p>\n None of this happens overnight. The incumbent system \u2013 especially US dollar dominance \u2013 remains deeply entrenched. But, the trend is coming into focus: local currency markets are deepening, trade settlement patterns are diversifying and new funding and liquidity corridors are gaining relevance.<\/p>\n At the same time, the utility of digital assets and transition technologies such as stablecoins, which promise 24\/7 connectivity, is gaining credence among investors, corporates and sovereign issuers. It remains to be seen whether such technologies remain on a parallel track, or whether the entire industry moves to blockchain, but progress towards real-time settlement and diversified digital assets is clear.<\/p>\n For investors and corporates alike, the implication is less about abrupt change \u2013 and more about incremental but persistent drift.<\/p>\n What this means: From mitigation to optimisation<\/p>\n In this environment, the focus is shifting from mitigating risk to reallocating and pricing it more precisely.\u00a0 The need to navigate multiple, overlapping systems is accelerating, while the strategic focus shifts from efficiency to resilience and flexibility.<\/p>\n That requires robust cross-border liquidity strategies, multi-currency funding and hedging frameworks, and access to a broader set of capital pools and market structures<\/p>\n Just as importantly, it requires recognition that fragmentation itself creates opportunity, particularly in relative value, diversification and access to new growth corridors, including across ASEAN and Central Asia.<\/p>\n If the last decade was defined by global integration, the next will be shaped by how effectively institutions operate with resilience across a more fragmented landscape. Traditional approaches to risk management are no longer sufficient. Today, it\u2019s not only about mitigation. It\u2019s about optimisation, too.<\/p>\n \t\tGlobal Markets<\/p>\n Your local advocate in high-barrier markets across Asia, Africa and the Middle East.<\/p>\n","protected":false},"excerpt":{"rendered":"Tony Hall shares insights into how to reassess risk, liquidity and capital flows and diversify with intent. At…\n","protected":false},"author":2,"featured_media":79134,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21387],"tags":[623,35251,35252,20677],"class_list":["post-79133","post","type-post","status-publish","format-standard","has-post-thumbnail","category-standard-chartered","tag-article","tag-foreign-exchange","tag-global-credit-markets","tag-standard-chartered"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116884557250530197","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/79133","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=79133"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/79133\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/79134"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=79133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=79133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=79133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}