The market for public safety is in clear distress. Joel Cauchi, the man behind the Bondi Junction stabbing spree, now faces an additional 19 charges, bringing the total to 20 counts of murder and 40 of attempted murder. The Sydney carnage has sent shivers through the UK, where officials are quick to condemn a worrying uptick in public violence.
But as a veteran observer of the City, I see this as more than a moral panic. It is a failure of risk pricing. The cost of policing, the yield on social cohesion, and the capital flight from inner-city trust are all off-balance.
The British government, ever eager to spend, must now ask itself: is this a transient volatility or a permanent impairment of the social asset? Investors in law and order are watching closely. The gilt yield on security is rising, and the premium on violence is being repriced.
The Bondi incident is a stark reminder that the bottom line of public safety is never safe from a sudden crash.
