24 July 2014

Poll: Which Military Conflict Has the Greatest Potential to Disrupt Financial Markets?

Posted In: Economics

On any given day, there are far more military conflicts raging worldwide than the few that make international headlines.

Some conflict areas (e.g., Ukraine, Gaza, and Syria) may sound familiar, whereas others (e.g., Central African Republic, Northwest Pakistan, or Mexico) may not. But when we asked CFA Institute Financial Newsbrief readers which conflict had the greatest potential to disrupt the world’s financial markets in the next 12 months, 69% of our 895 respondents pointed to Ukraine.

Which of the following areas of ongoing military conflict do you think has the greatest potential to disrupt global financial markets in the next 12 months?

After the alleged downing of Malaysia Airlines Flight 17 by pro-Russian forces in Ukraine and calls for tougher sanctions by the United States and its allies, the Russian ruble, stock market, and credit default spreads came under pressure, as did the euro. Western financial markets have not felt the same degree of pressure, and gold — long seen as a safe haven — has not posted any dramatic gains.

There are too many possibilities for what will happen next, be it a lull or a storm. Global investors, it appears, are opting to wait and see.

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Tags: Polls

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About the Author(s)

Usman Hayat, CFA

Usman Hayat, CFA, writes about sustainable, responsible, and impact investing and Islamic finance. He is the lead author of "Environmental, Social, and Governance Issues in Investing: A Guide for Investment Professionals;" the literature review, "Islamic Finance: Ethics, Concepts, Practice;" and the research report "Sustainable, Responsible, and Impact Investing and Islamic Finance: Similarities and Differences." He is interested in online learning and has directed three e-courses for CFA Institute: "ESG-100," "Islamic Finance Quiz," and "Residual Income Equity Valuation." The other topics he writes about are macroeconomics and behavioral finance. He has experience working in securities regulation and as an independent consultant. His qualifications include the CFA charter, the FRM designation, an MBA, and an MA in development economics. He has served as a content director at CFA Institute. He is a former executive director at the Securities and Exchange Commission of Pakistan (SECP) and former CEO of the Audit Oversight Board (Pakistan). His personal interests include reading and hiking.