The impact of traditional markers of health like earnings, growth, and fundamentals on global markets isn't what it used to be. Now, they play second fiddle to each new fickle trade policy and hastily made geopolitical decision. As a result, volatility mounts and the erosion of confidence in long-standing institutions continues - leaving market participants and compliance teams navigating uncharted waters.
At our recent Compliance Connect panel, invited industry leaders joined us for a panel to explore how these pressures and change are playing out in real time and what they mean for compliance officers, investors, and other policymakers. And our panelists delivered.
The conversation went beyond simple market commentary, diving into supply chain vulnerabilities, currency dependencies, and the ongoing role of policy shifts. For firms that want to understand where risks and opportunities are coming from, the insights shared offered a useful guide to what the next decade of market governance might look like.
Here are five key takeaways from our panel: Navigating geopolitical and economic turmoil - how are investment firms responding?
Markets Reflect Policy Signals
Equity markets are increasingly shaped by forces beyond corporate earnings and growth. Policy decisions, regulatory shifts, and broader ideological changes are now more directly reflected in market movements than in the past. And this shift has implications that extend far beyond short-term volatility.
For compliance teams, it means understanding that equity performance is shaped by a wider set of drivers, including sanctions, trade policy, and institutional credibility, any of which can have long-term consequences and impact regulatory requirements. To navigate effectively, compliance must expand its lens to account for these drivers of market behaviour, and be prepared to highlight vulnerabilities.
"Normally in markets, when you have [a geopolitical shock], it has an impact for a week, maybe three weeks. But there are longer-term trends in markets that play out through fiscal spending, trade policy, and even challenges to institutions like the WTO or IMF.”
Supply Chains Are Now Sovereign Strategy
The once-hidden complexities of supply chains are now front and centre in market analysis. Once viewed as a cost-management exercise, supply chains now represent a broader consideration of national security and economic sovereignty. Companies relying on overseas production in China, Taiwan, or other politically sensitive regions now face a fundamental shift: exposure is no longer only financial, it is geopolitical. For investors and compliance professionals, this means evaluating a company’s resilience also requires understanding its regulatory exposure and mapping supply chain dependencies with the same level of scrutiny applied to holdings and trading activity.
“It became a whole game of exposure to Japan or China… we’re going through the list of 3,000 companies around the world and identifying where the supply chain risks really are, and then following the news on how much that’s going to impact the bottom line.”
This illustrates the degree to which supply chain analysis has become a core investment and compliance practice. Monitoring exposure has now become a baseline requirement for both portfolio construction and risk oversight.
Currency Risk Takes the Stage
Currency dynamics, too, have shifted from background considerations to more prevalent influencers of company performance. A strong U.S. dollar hurts import-heavy businesses by raising costs, while it gives exporters an advantage. At the same time, many central banks are reducing their reliance on the dollar, often by buying more gold, which shows growing concerns about the dollar’s long-term dominance. For compliance teams and investors, paying attention to currency movements is no longer optional. Compliance must work alongside investment teams to stress-test portfolios, model different currency scenarios, and monitor how policy changes affect exposure.
“We’re having to become incredibly sensitive to currency. The companies with heavy dollar exposure, especially importers, are facing not only elevated import costs but also the challenge of buying at a devalued dollar. That creates significant implications, while exporters see the opposite effect. It has become a really important part of risk, and what happens here is critical for equity markets.”
Growth Among Risk...with Caveats
Many investors still avoid markets like China or sectors such as utilities and renewables, but there are opportunities hidden in these areas. In some cases, low valuations are driven more by fear and politics than by business fundamentals. At the same time, industries tied to long-term needs such as renewable energy, healthcare, housing, and digital infrastructure are likely to benefit from government spending and steady demand.
For compliance teams, the knock-on effect is a new layer of responsibility. Expanding into new markets or emerging sectors often means working with unfamiliar regulations, different disclosure requirements, and jurisdictional-specific rules. Compliance must be prepared to extend its understanding of these burdens so that firms can pursue opportunity while avoiding unintended regulatory risk.
“Chinese equities have very little to do with the macro fears, but they’ve been deemed uninvestable. That leaves an incredible opportunity, especially as East Asia sees a boom in interregional trade and technology.”
Policy Change and the Future of Compliance
What once looked like short-term turbulence has now become the new normal in which everybody operates. Changes in trade, tariffs, and trust in global institutions are not isolated events but part of a larger shift in how governance is being approached, and a representations of changing ideologies. The same can be said of a growing skepticism toward bodies such as the WTO or IMF.
For compliance and investment teams, this means planning for disruption as the rule rather than the exception. Building flexible systems, running scenarios, and staying engaged with policy are no longer optional. They are the foundation of long-term success.
“You have to set yourself up with the framework that this is an ideological position — a disbelief in the institutions set up through Bretton Woods. WTO, IMF, even questioning why the Fed exists. So you have to be prepared for persistent disruption throughout this entire tenure.”
This outlook suggests that volatility itself has become structural. Organizations that wait for stability may be waiting longer than they'd like, while those who adapt to constant disruption will be positioned to outperform in the long term.
Where Markets, Policy and Compliance Meet
Our panel made it clear that equity markets can no longer be understood in isolation from politics, regulation, and global policy shifts. Currency swings, supply chain realignments, and regional opportunities are all shaping performance in ways that expand the compliance team's role in evaluating risk and where it comes from.
For firms, it also means building frameworks that anticipate disruption rather than waiting for stability to return. It also means preparing compliance processes for new markets and sectors, where unfamiliar regulations and disclosure requirements will be just as important as financial analysis.
The winners in this environment will be those who stay agile, interpret market signals as early warnings of policy change, and create compliance strategies that keep pace with both risks and opportunities.
