Banking Calm Deceptive as deVere CEO Warns of Renewed Volatility

Markets Recover but Risks Linger

Global markets bounced back on Friday following sharp losses in financial stocks. Traders seemed reassured that recent credit issues at regional banks were isolated. However, Nigel Green cautioned that optimism might be misplaced, citing growing strains in both consumer and corporate balance sheets. According to Bloomberg (https://www.bloomberg.com), similar periods of calm in prior cycles have often preceded broader volatility.

Credit Quality and Late-Cycle Signals

Green pointed to rising bankruptcies and loan delinquencies as warning signs. Businesses across major economies are seeing higher default rates, and households are starting to miss payments. The International Monetary Fund (https://www.imf.org) recently highlighted tightening global credit conditions, underscoring the late-cycle dynamics that often unsettle investors. Green urged a sober view of fundamentals rather than sentiment-driven momentum.

Divergence Across Financial Institutions

While large institutions remain resilient, smaller lenders face growing exposure to commercial property and consumer finance. This uneven resilience, he said, creates ripple effects across global markets. Reuters (https://www.reuters.com) reports that investors are becoming increasingly selective, favoring diversified players with solid liquidity over riskier peers. The deVere chief believes this divergence could magnify volatility as capital reallocates.

Strategy for Investors Amid Fluctuations

Despite near-term jitters, Green advised that disciplined, diversified investors can still find opportunity. He stressed the importance of focusing on strong balance sheets and predictable cash flows rather than chasing market rebounds. According to Financial Times (https://www.ft.com) analysis, professional guidance and emotional restraint are critical as the credit cycle turns. “Volatility creates openings for the prepared,” Green concluded.