Where Did Market Volatility Go?

In fact, the competent international financial institutions had responded appropriately to recent market volatility.

SEC said that these tweets actually had no evidences and the volatility in market triggered by them had hurt investors.

Developing countries were particularly vulnerable to the type of market volatility which had led to the crisis in East Asia.

That said, in such a complex environment, investors can be expected to reach widely disparate conclusions, which will sustain if not increase market volatility.

It would seem that bid offer spreads are falling, which we might regard as positive. But volatility has risen, as has cross market contagion.

(e) Price volatility

It doesn t anymore. And today s lack of clarity has become a major contributor to market volatility the last place the Fed should want to be.

The financial volatility seen in Asian and other emerging market economies in 1997 and 1998, however, suggests that some regulatory gaps remain in developed economies.

Banks and investors consider them to be high risk due to their limited assets, low level or lack of collateral, lack of business history and market volatility.

28. In this regard, there has been considerable interest in policy experiments that use broad, market based measures rather than selective administrative restrictions to discourage financial volatility.

Moreover, market volatility of portfolio investments was not a serious problem in Africa (especially in equity markets in Egypt and South Africa), particularly when compared to other markets.

The major problem with these flows was volatility, and was characterized by heavy concentration on the most mature markets with a large stock market capitalization and high levels of liquidity.

And government intervention to block the exits is inadequate. On the contrary, until China s stock market opens up and its institutional foundation becomes predictable, volatility will be its only guiding rule.

The overall objective will be to bolster high quality growth, attract long term foreign investment, minimize excessive market volatility, and facilitate rapid integration into the global economic, financial and trading system.

Volatility has increased only modestly, while asset prices have held up. Noise about these risks has occasionally (but only briefly) shaken investors confidence, and modest market corrections have tended to reverse themselves.

Management of volatility and its effects on development

As long as China continues to pursue pro market reforms, it will remain the largest single country contributor to global GDP growth over the medium term unperturbed by stock market volatility. If reforms stall, falling stock prices are likely to be the least of China s worries.

On the occasion that holidays in China and other regions of Asia lead to a bleak data for the region next week, the European political situation may become a source of market volatility.

OXFORD Recent evidence suggests that much of the world has entered a period of low financial market volatility. But this is no time for complacency more turbulent times are likely to lie ahead.

In fact, the explanation for market calm probably lies elsewhere. So, if a conspiracy of Asian central banks is not to blame for the volatility drought that is parching traders earnings, what is?

Beginning in October 1997, moreover, the nervousness spawned by the South East Asian situation spilled over into financial and currency market volatility in Hong Kong, China Brazil South Africa the Russian Federation and elsewhere.

In short, though central banks creation of macro liquidity may keep bond yields low and reduce volatility, it has also led to crowded trades (herding on market trends, exacerbated by HFTs) and more investment in illiquid bond funds, while tighter regulation means that market makers are missing in action.

This volatility highlights the challenges of ensuring a smooth process of financial liberalization in China. After extensive government intervention prohibited some selling of shares and froze trading for the bulk of the market, prices rebounded.

How can the need for large foreign exchange reserves experienced by emerging market developing countries to provide self insurance against volatility in international trade and financial flows, and the cost of those reserves, be reduced?

Security problems and disruptions in production also increased price volatility.

A combination of volatility and nuclear weapons can be lethal.

MILAN Since the global economic crisis, sharp divergences in economic performance have contributed to considerable stock market volatility. Now, equity prices are reaching relatively high levels by conventional measures and investors are starting to get nervous.

They held large inventories of these assets, thus providing liquidity and smoothing excess price volatility. But, with new regulations punishing such trading (via higher capital charges), banks and other financial institutions have reduced their market making activity.

That prospect has already sparked renewed financial market volatility. In July, Bernanke attempted to calm investors with remarks signaling that, amid inadequate employment gains and persistently low inflation, the Fed would not abandon monetary stimulus anytime soon.

Indeed, a major disadvantage of voluntary pledges lies in their volatility.

STANFORD The Chinese government s heavy handed efforts to contain recent stock market volatility the latest move prohibits short selling and sales by major shareholders have seriously damaged its credibility. But China s policy failures should come as no surprise.

Strong financial market supervision will also be needed to contain risks stemming from credit booms, asset bubbles, and financial market volatility. On the structural front, measures to enhance wage and price flexibility would improve resiliency to asymmetric shocks and would help the new countries' cyclical fluctuations become more attuned to the rest of the EU.

However, the volatility of exchange rates at times had destabilized trade flows.

Concern remained, however, about the degree of exposure to potential financial volatility.

Even after the market volatility following the crisis in Greece and the Chinese stock market s plunge, valuations appear to be high. The S P 500 has surpassed pre 2008 levels, with companies shares trading at 18 times their earnings.

One would think that market prices should be volatile as investors try to absorb what this earnings volatility means. But we have learned time and again that stock markets are driven more by psychology than by reasoning about fundamentals.

BEIJING China s stock market has been a hot topic since the summer, when a rapid rise gave way to a major plunge, triggering a global equities sell off. The question now is what can be done to prevent further volatility.

LAGUNA BEACH The world is increasingly characterized by divergence in economic performance, monetary policy, and thus in financial markets. Global divergence has already contributed to stock market volatility, unprecedented declines in advanced economies' government bond yields, and outsize currency movements.

They should also mitigate the impact of the excessive volatility of financial markets.

The aim should be to avoid volatility and to ensure stability and fairness.

Fortunately, there is little reason to believe such dire predictions, or that the market gyrations that have been driving recent headlines represent anything more than short term volatility. After all, equity price movements are a poor predictor of the real economy s performance.

In these days of froth, the persistence of extraordinary policy accommodation in a financial system flooded with liquidity poses a great danger. Indeed, that could well be the lesson of recent equity and currency market volatility and, of course, plummeting oil prices.

Even though the Dominican Republic s growth rate for 1998 was projected to be one of the highest in the region, the most dynamic sectors of its economy were in the area of services and thus subject to the volatility of the money market.

This, however, was greatly undermined by commodity price volatility, tariff peaks and tariff escalations.