The dangers of higher risk aversion

It is likely that risk aversion will remain high, due to: The protectionist policies in the United States; The geopolitical tensions and sanctions; The uncertainty about growth; The Italian crisis. What should we be concerned about when risk aversion is high? A rise in the cost of companies’ financing, and therefore a decline in their investment; Pressure on the interest rates of the peripheral euro-zone countries as a whole ; Capital outflows from emerging countries, leading to a depreciation of their exchange rates , to rising interest rates and to declining growth in these countries.