Mark Mobius from giant US money manager Templeton Asset Management thinks the financial system is inherently flawed. The 75-year-old executive chairman of Templeton’s emerging markets group warns investors that there is “another financial crisis around the corner”.
His reasoning is simple: “we haven’t solved any of the things that caused the previous crisis”. Mobius thinks that derivatives are the chief culprit. He notes that despite the crisis they continue to grow and are still not regulated. The total value of derivatives is now worth ten times as much as the total global gross domestic product and he reckons this makes volatility and crises are inevitable.
Large banks also threaten the system, says Mobius. “Are the banks bigger than they were before? They’re bigger… Too big to fail.”
Yet Mobius, who himself manages more than $50billion of investments, believes these crises provide “great opportunity”. Market crashes are a chance to “invest and do a good job”. He highlights Africa, and the Nigerian banking sector in particular, as offering “incredible” investment potential.