The Break-up of the Soviet Union Provided Further Opportunity for the IMF to Expand its Mandate and Influence. The Giant Private Institutional Investor. Institutional investors take different forms and have different investment strategies, such that some forms of institutional investments may pose greater risks than others. Institutional investors make investing safer and easier for the individual investor. Institutional Investors, Despite their Value to Individual Investors, Inject a Large Measure of Instability and Chaos into the World's Financial Markets.
Institutional investors can wreak havoc when exhibiting herding behavior.
Institutional investors can affect the value of a developing country's currency simply because of the sheer size of their investments. Provided Mexico a Steady Supply of Capital to Drive Mexico's Renewed Economic Success A Currency Crisis Developed as Institutional Investors Pulled their Money out of Mexico, and the Mexican Government then had to Devalue the Mexican Peso. The Mexican crisis shows how, in today's world of giant institutional investors, balancing a current account deficit with a capital account surplus can mask trouble. With their size and prominence, institutional investors had an inordinate amount of political clout. As capital fled, Mexico was left with no choice and had to devalue the peso.