Finance Isn’t Prepared for an Iran Crisis. It Should Be

With the war in Iran entering its second month, markets are starting to look worried. Financial regulators should be, too.

After an initial period of calm, investors appear to be recognizing the possibility that the conflict could get out of control and inflict long-term economic damage. Prices of bonds and stocks have fallen in unison, with the MSCI World Index down more than 5% and the CBOE Volatility Index — known as the “fear gauge” — hitting its highest point since the US unveiled its “Liberation Day” tariffs nearly a year ago.