I just read a very interesting article in the Financial Times, written by Michael Gordon the former CIO for Fidelity international, which questions the risk-free nature of government bonds. This is quite fascinating as government bonds were the last investments that were considered “risk-free” or at least so we have been taught. However with the recent near bankruptcies of Greece and Dubai this reputation of investments in governments to be “risk-free” is now seriously threatened.
In relation to my previous article (here) about the need for new investment and financial theories because investors obviously do not act rationally in reality, the news about government bonds is quite stunning. I had already expressed my interest in alternative banking systems like “Islamic banking“, which has been gaining significant attention lately.
Considering that two of the most important underlying notions for the current financial theories are invalid, I am extremely curious what new schools of thought will come out of this crisis. Does ESADE have the capabilities to come up with alternatives? I truly hope so and that I can still experience it. What do you think?
My ESADE MBA 