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BlackRock urges fund scrutiny to contain redemption risk 

June 21, 2014
Regulators, seeking to avoid a replay of the 2008 financial crisis, are contemplating ways to reduce the likelihood that an exodus from funds could freeze financial markets during a sell-off and much of the focus is on bond mutual funds.
 
BlackRock, the world’s biggest money manager, is encouraging regulators to scrutinize the risk of an investor flight from mutual funds and consider potential restrictions that would help prevent asset sales.
 
“There is no historical evidence that this type of run has ever occurred, however, it’s worth doing deeper analysis to understand the questions better,” Barbara Novick, BlackRock’s vice chairwoman, said Wednesday.
 
Regulators, seeking to avoid a replay of the 2008 financial crisis, are contemplating ways to reduce the likelihood that an exodus from funds could freeze financial markets during a sell-off. Much of the focus is on bond mutual funds and whether they might lose assets rapidly if interest rates rise. Investors poured $1 trillion into U.S. bond funds from 2008 to 2012 and pulled $80.5 billion last year, according to data from the Investment Company Institute.
 
Read More: The Seattle Times

 

 
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