Halkin is very pleased to welcome back Russell Napier, Orlock Advisors, to address “How Do you Solve a Problem Like Marianne?”, examining France’s fiscal predicament and the risks of majority foreign ownership of its sovereign debt and an overleveraged domestic banking system. (Russell elaborates below).
“The move to financial repression and Capital Nationalism entails a return of home bias for savers. Countries particularly reliant upon foreign savings, particularly if they are highly geared, will see recession and a credit crisis as the repatriation of capital forces their bond yields higher and their asset prices lower. France is particularly exposed as only 24% of its government bond market is owned by its own savers and the assets of the banking system are equivalent to 400% of the country’s GDP. The country has a high and rapidly rising private sector debt service ratio. If the ECB does ‘whatever it takes’ to ‘preserve the euro’ will they impose capital controls on France as they did in 2013 in Cyprus and 2015 in Greece? What are the consequences for world financial markets when France, through the imposition of capital controls, brings the world the largest peacetime de facto sovereign default in history.”
Professor Russell Napier is author of The Solid Ground investment report for institutional investors. Russell has worked in the investment business for over 30 years and has been advising global institutional investors on asset allocation since 1995. Russell is author of the book Anatomy of The Bear: Lessons From Wall Street’s Four Great Bottoms (‘a cult classic’ according to the FT) and is founder and course director of The Practical History of Financial Markets at The Edinburgh Business School (now available in an Executive Education online version www.didaskoeducation.org).
In 2014 Russell founded the charitable venture The Library of Mistakes a business and financial history library in Edinburgh that now has branches in India and Switzerland. A hub of research, intellectual curiosity and conviviality, it’s home to a selection of quirky curiosities and a fine collection of books.
Russell has degrees in law from Queen’s University Belfast and Magdalene College Cambridge. He is a Fellow of The CFA Society of the UK and is an Honorary Professor at The University of Stirling and a Visiting Professor at Heriot-Watt University. His second book – The Asian Financial Crisis 1995-1998: Birth of the Age of Debt – was published in July 2021.The original Library of Mistakes has been open to readers in Edinburgh since 2014, continuing a tradition of enquiry stretching back to the work of local luminaries such as Adam Smith.