Black Monday scenario ‘increasingly likely' for markets

Barings multi-asset manager Christopher Mahon has warned the chances of a fresh Black Monday-style crash are rising, as policy decisions increasingly drive markets.

He suggested any new financial crisis would more likely be triggered by policy errors than by an overleveraged banking sector.   Mahon (pictured) said the regulator is working hard to learn from the mistakes of the period post-Lehman Brothers, but has forgotten the lessons of earlier crises. “It will be less about the financial system and undercapitalised banks, as we are on top of that risk. “The regulator is always chasing the last crisis. But, as one generation learns, a generation forgets.” On Black Monday in October 1987, the Dow fell by more than 20% in one day, and most m...