Many countries are vulnerable to external shocks such as a spike in oil prices, a drop in a competitor's currency or a collapse in world-wide tourism following a terrorist attack somewhere else. Can governments hedge their economies against these risks using financial instruments in the same way that a home-owner insures against a flood? How would they do it and should they do it?

Avinash Persaud is the founder and Chairman of Intelligence Capital. Prior to founding Intelligence Capital and the GAM Persaud Investment Funds, he was Head of Global Research at State Street Corporation. Previously, he was Global Head of Currency and Commodity Research at JP Morgan. He held the Mercers' Memorial Chair in Commerce at Gresham College between 2002 and 2005, is a Governor of the London School of Economics and a Trustee, a member of the Board of the Global Association of Risk Professionals and the Chair of the CBC Working Group on investment flows. He is the winner of the Institute of International Finance's Jacques de Larosiere Award in Global Finance and an Amex Bank Award as well as a prolific author.