One consequence of the financial crisis is that fund managers are increasingly going to come into conflict with governments. Actions taken in the best interest of fund managers’ clients are likely to be considered against the national interest. Preserving clients’ capital in the “great recession” is a big enough challenge. But this ignores the much more important structural change that has just occurred.

Developed world governments are desperate for finance; they will attempt to constrain private-sector credit growth and are likely to ease the economic pain with inflation and exchange-rate depreciation.