Fund managers and financial advisers should be forced to study financial history to reduce the likelihood of future market panics and crashes, according to a leading trade body for investment professionals.
A report by the Chartered Financial Analyst Society of the UK condemns “financial amnesia” among institutional investors, arguing that a failure to heed the lessons of past bubbles was a key factor behind the global financial crisis.
CFA UK, which represents 9,000 investment professionals, argues that the study of financial history should form a major part of all compulsory education for retail and wholesale investment professionals. “Financial amnesia disarms individuals, the market and the regulator,” the body said. “It causes risk to be mispriced, bubbles to develop and crises to break.”