Gwyther: Patient investors will reap rewards in volatile markets

After several volatile months, risk assets rallied strongly in late October on the expectation the latest moves by European policymakers would produce the long-awaited ‘comprehensive solution' and stabilise the debt crisis.

As well as a second rescue package for Greece, the summit announced a commercial bank recapitalisation programme and measures to secure the eurozone’s future via enhancements to the EFSF with greater fiscal coordination. About 70 cross-border banks will have to meet a core tier one capital ratio of 9% within six months. In practice, they are likely to meet this target by a combination of asset sales, retained earnings, suspending dividends/bonus payments and converting debt into equity rather than by raising fresh capital. While this is a welcome move, policymakers seem to have a somewh...