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Leverage and liquidity are risks to watch 

November 26, 2015

Rick Lacaille, Financial Times

 
Seven years after the Lehman debacle, the world is still unsure whether market reforms have contained systemic risk sufficiently to maintain global financial stability. We have seen a barrage of bank regulation as governments rushed to make the banking industry “safe” again. Today, many of these regulations are blamed for causing other potential risks to financial stability affecting non-banks, notably in reduced liquidity in bond markets.
 
But broader risks remain poorly understood, and regulatory proposals are highly contentious. To properly mitigate risks, we need better information gathering and more collaboration across the wider financial industry. For their part, asset managers need to work with regulators to scrutinise these risks and establish long-term solutions. Read more
 
 
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