jor part of this story, with equity, credit, real estate and infrastructure assets under private management nearly tripling in the preceding decade. Worryingly, this growth in private assets implies larger pockets of unobservable risk.“ Shadow banking” has long grown outside the purview of regulators, compounding both financial and real economic risks, and now $ 124 trillion in intergenerational wealth transfers is expected by 2048. These could contribute further to global risks as beneficiaries invest in private markets and crypto.

Increased wealth transfers, combined with bubble-like markets, may benefit riskier assets for now; but under the current rules, they will also introduce systemic risks. Recent changes to regulations over 401( k) pension savings provide more opportunities for more investors to place risky bets on alternative assets such as infrastructure, venture capital, meme coins, individual stocks, sports, cryptocurrencies and gold. They also allow for more leveraged positions and shorter investment and asset-holding periods, such as through zero-day options( one-day bets on an asset’ s price movement).

As risk appetites grow, new technologies and trading platforms are increasing the speed of high-frequency and algorithmic trading. Owing to the integration of AI, quantum computing, and advanced data analytics, high-frequency trading is expected to grow by 7 % per year between 2025 and 2030, and this will deepen its influence on market dynamics, leading to higher trading volumes and greater liquidity.

When market volatility is heightened further by geopolitical and macroeconomic uncertainty( especially regarding interest rates and trade policy), trading activity will increase as investors and algorithms react rapidly to market fluctuations. Add the prospect of near- 24-hour trading on major exchanges like

NYSE Arca, and the overall volume, frequency, and volatility of trading will increase even more.

Each of these trends suggests that risk assets will be the winners in terms of returns, at least in the short term. But investors should beware, because the same trends also threaten to alter the functionality of capital markets in multiple ways, including by reducing liquidity( in cases where private ownership is on the rise), diminishing the observability of market-clearing prices, limiting price discovery( where buyers and sellers meet), and increasing asset-price volatility. These shifts offer opportunities, but they also imply many hazards, especially for those who have not properly surveyed the changing global landscape.

DAMBISA MOYO, an international economist, is the author of Edge of Chaos: Why Democracy Is Failing to Deliver Economic Growth— and How to Fix It( Basic Books, 2018). © Project Syndicate

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