Peter Fisher: Managing risk in a volatile world

Photographs by Natalie Brasington Photography

BlackRock's Global Head of Fixed Income, Peter Fisher, understands bond markets and what moves them. Fisher began his career in 1985 at the New York Federal Reserve Bank and spent most of his time running the open market operations. He basically served as the Fed's asset manager, implementing Chairman Alan Greenspan's and the Federal Open Markets Committee's policies.

He went on to serve as an Under Secretary for Domestic Finance at the Treasury Department before taking his skill to the behemoth asset manager BlackRock. Fisher led BlackRock's Asian operation before moving to the fixed income division and eventually running it. We spoke to Fisher about the Eurozone debt crisis, its impact on the United States and what comes next for Treasuries.

Futures Magazine: Peter, how did you move from the Federal Reserve to Treasury to running BlackRock's fixed income portfolio?

Peter Fisher: I was in the asset management/risk management business for the Fed and the Treasury, and [it] was a pretty easy jump to a firm focusing on asset management and risk management.

FM: Give us an assessment of the Eurozone sovereign debt crisis. What will be the long-term impact of the liquidity injections on Nov. 30?

PF: What we should recognize while we are watching the drama unfold in Europe [is that] we are seeing the consequences of the policy mistake they made two years ago, tightening monetary and fiscal policy too quickly in the face of ongoing global deleveraging. The world financial system need to delever after the crisis in 2008 and Europe thought they could tighten fiscal and monetary policy and be unaffected by that. That is what triggered the chaos in European sovereign bond markets, and their financial sector really couldn't take that strain. Now we are seeing whether they could pull out of making that fundamental error of tightening too quickly. The liquidity injections at the end of November were a bridging operation with the central banks around the world trying to show support for Europe and whether Europe could come together with more fundamental policy initiatives. We still are waiting to see whether those will bear fruit.

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