In this opinion for the Financial Times, CalPERS Chief Investment Officer describes what keeps him up at night and his views on the threats to financial growth. Dear says, “First, we have to recognize the perils. We must be alert to the warning signals without being paralyzed by fright or despair. The work that we and other investors are doing to improve corporate governance, increase our risk intelligence, maintain our long-term perspective, build up a liquidity reserve and to prevent the Dodd-Frank reforms from being undermined or rolled back in the regulatory process is exactly what we should be doing.
Second, however daunting our challenges, they’re not potentially as bad as they seem. That awful sensation of staring into the abyss is not gone, but the corrective steps taken by Congress, the Fed and two administrations did forestall the worst. We now know more than we did about the risk of fat tails and the false comfort of stable disequilibrium. We must steer a course between excessive optimism and pessimism, seeking a realism that’s grounded on facts, unsentimental analysis and healthy debate.”
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CalPERS is working hard to ensure the retirement and health security of our members, provide help to our employers, and manage our investments to meet our long-term liabilities. We hope this information provides education, insight, and clarity.
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