Political Risk Returns to the Agenda

LONDON -- Investors who shrugged off political risk in recent years of good growth are focusing on it again after Russia and Georgia's war, former intelligence chiefs now working for troubled finance houses said Wednesday.

Former British Secret Intelligence Service head Richard Dearlove and former Central Intelligence Agency deputy director Jami Miscik told an emerging markets conference that the focus was moving away from terrorism toward more conventional threats.

"Three years ago, it was almost impossible to get anyone to talk about risk," Miscik said. "It was a period of unprecedented growth, and people were not interested. ... Russia's move into Georgia really put political risk back on the agenda."

Investors dumped Russian assets in the aftermath of the war, with the market impact spreading to the country's neighbors and banking worries hitting emerging markets across the board.