From a simple statistical indicator used mostly by risk management teams, volatility has become a key variable in financial markets over the last few years, scrutinised widely by investors and analysts.
The increasing popularity of implied volatility indices such as the VIX, and the rise of management processes based on risk budgeting, have helped convert what had been the subject of expert discussions into a topic of coffee-time conversation, at least within financial circles. Recently, the debate seems to be focused on one question: why is volatility so low and how long can it remain so?
