18 Sep Financial Implications of Rising Political Risk in the US

US election disputes impact financial world; Fitch Ratings downgrades US credit due to governance decline. Brookings/States United survey reveals 90% institutional investors perceive rising US democracy threats, yet <30% confident public companies can manage political risk. Survey suggests only 45% corporations prepared for US political risk. Despite focusing on political risk abroad, 40% investors disregard US political risk; post-January 6, 2021, 60% pay more US political risk attention. 85% investors see increasing US political risk, influencing 60% to discuss political risk with US company boards. Survey encourages risk management strategies; investors scrutinize company lobbying, political spending, and governance structures. Despite perceived higher international political risk, some investors highlight Federal Reserve as US political/social risk buffer. Survey results underscore political risk as long-term value determinant, pushing investors to consider US political risk a fiduciary duty akin to climate change. Risk mitigation strategies include adding US political risk to asset/stewardship assessments, advocating electoral integrity, and promoting corporate lobbying transparency. Source: The Harvard Law School Forum on Corporate Governance