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Is political risk the new norm?

Jitters over a crisis in Ukraine appear to have subsided for now, but analysts say political risk in general has become the new norm and something investors should pay more attention to.

"Geopolitical risk is no longer a tail risk," said Callum Henderson, the global head of currency research at Standard Chartered. "You have to assume that it is going to rise in the short-term and not just in the Ukraine. We've seen the rise of geopolitical risk in Latin America, Asia, in Turkey and South Africa and these are considerations that investors didn't have to think about before the [financial] crisis."

Indeed, financial markets have had a tumultuous week – with risk assets selling off sharply and safe-havens such as gold rallying on Monday after Russia tightened its grip on Russian-speaking Crimea in a move that followed the ousting last month of Ukraine's president after bloody street protests.

On Tuesday, Russia's President Vladimir Putin said he would use force in Ukraine only as a last resort, easing fears of tension between the West and Russia over Ukraine and boosting risk assets.

(Read more: Global markets rally on Putin 'climb down')

While analysts say global markets have proved resilient to bouts of geopolitical uncertainty, recent developments in both developed and developing markets suggest investors need to be more wary about pricing in political risk.

And this means safe-haven assets such as the U.S. dollar could see greater demand.

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"Investors need to get used to the idea that a continuously simmering pot of political unrest is the new reality for the global economy," said John Rutledge, chief investment strategist at Safanad in California.

"The dollar and the yen will be treated very differently by global investors. Safe dollar assets, along with gold and other "fear-based" assets will enjoy large inflows and rising prices," he added.

New era

Analysts said the global financial crisis in 2007-2008, which sparked a huge degree of social dislocation and pain, is one reason for the rise in political risk.

"Political risk reared its ugly head after the global financial crisis and has become much more pronounced over the past several years," said Nicholas Spiro, managing director at Spiro Sovereign Strategy. "Because it's difficult to assess, not to mention price, many investors chose to ignore it."

Spiro said that while in some countries political instability is usual and can be ignored, in the case of Ukraine there was a need to pay attention to further developments because of the wider ramifications for emerging markets.

In a sign that Ukraine remains a source of tension, U.S. President Barack Obama said late Tuesday he would not attend the G8 summit in Sochi, Russia, in June if the status quo in Ukraine remains.

Ukraine is not the only source of geopolitical tensions globally. In Asia, a territorial spat in the East China Sea has soured relations between China and Japan, the world's number two and three economies respectively. In Venezuela meanwhile, anti-government protests continue and have claimed about 18 lives.

(Read more: Why investors should watch out for Japan-China tensions)

Add to this is a decline in U.S. power, which adds to political risk globally, analysts said.

"To some degree, the increase in global political risk has roots in the financial crisis… The biggest cause, however, is the relative demise of the U.S. as the dominant super-power," said Safanad's Rutledge. "We are now moving from a world with one dominant power to a world with no dominant power, an inherently less stable situation."

— By CNBC.Com's Dhara Ranasinghe; Follow her on Twitter @DharaCNBC

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