LONDON (MarketWatch) -- Mark Mobius, executive chairman of Franklin Templeton Investments, said Friday he fears the U.S. and other countries will fail to regulate derivatives properly, setting the stage for a repeat of current financial turmoil in a few years.
"I'm afraid that the political pressures on politicians in the U.S. and other countries will be so great that they will be unable to make the proper changes in regulations," Mobius said in an interview Friday at Franklin Templeton's London offices.
Derivatives, complicated financial agreements that derive their value from underlying commodity prices or interest rates, are at the heart of the current financial crisis, Mobius said.
Mark Mobius on 20 years in emerging marketsMark Mobius, executive chairman of Franklin Templeton Investments, talks to MarketWatch's Tom Bemis about the changes in emerging markets investing over the past two decades and his outlook for China and for frontier markets in Africa, Latin America and Asia.
"Derivatives can be a good thing, but if they're not properly regulated they can be very destructive," Mobius said. 'This will all come home to roost again,' he said.
Mobius also discussed his outlook for emerging markets and the dramatic changes he's seen over the past 20 years, including expansion from just a handful of markets to more than 40 worldwide today.
China's economy has been "steaming ahead," he said, adding "8% growth is quite remarkable" when other countries' economies are shrinking.
The Chinese government "stepped in early to make sure the banks were lending, and also took measures to have the state companies -- the biggest companies in the economy -- make investments." The combination of these actions, "plus China's desire to move away from export dependence, has created a very good environment," he said.
Mobius also is looking for opportunities in frontier markets: "nascent markets with low liquidity, where market capitalization of companies is relatively small, but they have great growth prospects, particularly markets in Africa, some of the markets in Latin America and some of the smaller countries in Asia."
Για τις αναγκες της μεταφρασης..
Marc Mobious..
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