The real cost of regulations

In our relentless pursuit to unravel the equities markets’ mysteries of 2016, Executive sat down for a further conversation with Paul Donovan, the managing director, Global Economics at UBS Investment Bank. E   What do you make of market behaviors in the first six weeks of 2016? One always expects some volatility but market volatility in 2016 has been very unusual. There is no economic justification for what we are seeing. So why do we have these problems? I think it is partly because equity markets and economies are not the same thing. Equity markets are biased towards energy and manufacturing; economies are service centric. Equity markets are [populated by] large companies, while economies are small companies. Equity markets are export focused; most economies are not. If we go back 20 or 30 years, the S&P [Standard and Poor’s index] was roughly like the United States economy; today it is