Russia is the source of the biggest political risk facing investors at the moment, with president Vladimir Putin “repeatedly” having the potential to create volatility, according to Björn Wahlroos, chairman of Sampo Group, Nordea Bank and UPM-Kymmene in Finland.

Speaking at the IPE conference and awards in Berlin, he warned about the danger ahead from the European Central Bank’s tapering its bond purchases but said that, arguably, the biggest challenge facing investors was “the return of political risk”.

This, all of a sudden, is “back with a vengeance”, said Wahlroos.

He spoke of three aspects of political risk: China, the rise of populism and Russia.

The biggest short-term political risk facing investors is from Russia, he said.

“Russia is a huge problem,” he said. “Russia is a huge problem for a very simple reason, and the simple reason is that Vladimir Putin cannot leave.”

He said his estimated net worth was “way too much” for Putin to be able to “quietly walk away”.

He said we do not know what would happen with Russia because “I’m pretty sure Putin will go to very great length to provide his people with what they think is glory, and, as long as he does that, he will repeatedly have the potential to create volatility in financial markets”.

He said there was no need to be “dramatic” about this but that investors needed to recognise the risk.

In terms of what this set of political and other risks meant for being a “good” long-term investor, he said “the key is to be boring”.

“Boring is absolutely the best thing we have going for us,” he said. “Please be boring – boring is the best asset we have.”

He also encouraged investors to “try to be a bit analytical”.

“The world does lend itself to analysis,” he said, adding that it “will still pay off”.

Lastly, he said “getting a feel for risk” is key to being a good asset manager, as risk-measures no longer work that well anymore because tail-risk has become so dominant.