Investment Funds and Financial Stability: Policy Considerations
Departmental Papers, September 17, 2021
Source details
- Canonical URL
- Investment Funds and Financial Stability: Policy Considerations
Other formats
Bibliographic details
- Authors: Ranjit Singh, Jay Surti
- Published: September 17, 2021
- Series: Departmental Papers
- DOI: https://doi.org/10.5089/9781513593951.087
Core findings
- The paper’s analysis underscores the importance of the ongoing Financial Stability Board-led process of identifying policy options, involving national authorities and the International Organization of Securities Commissions and other standard setters.
- The global nature of the investment fund business and fungibility of financial flows makes it vital to ensure consistency of global policy choices that can secure financial stability by precluding regulatory arbitrage.
- Emphasis on addressing liquidity and amplification channels exemplified during market stress episodes, such as the March 2020 market turmoil.
Policy considerations and recommendations
- Support and coordinate with the Financial Stability Board-led process to identify and develop policy options.
- Involve national authorities and the International Organization of Securities Commissions and other standard setters in designing policy responses.
- Ensure consistency of global policy choices to prevent regulatory arbitrage given cross-border flows and the global nature of investment funds.
- Address liquidity risk management for open-end funds (OEFs), including money market funds and mutual funds, to mitigate shock amplification and market illiquidity.
Key topics and areas covered
- Asset and liability management
- Asset management
- Emerging and frontier financial markets
- Financial institutions
- Financial markets
- Financial sector policy and analysis
- Financial sector stability
- International organization
- Liquidity
- Mutual funds
- Political economy
Keywords (as provided)
- Asset management
- cross-border flows
- emergency liquidity support
- Emerging and frontier financial markets
- emerging market securities
- Financial sector stability
- Global
- investor incentive
- Liquidity
- liquidity risk management
- March 2020 market turmoil
- market frictions confronting OEFs
- market illiquidity
- money market funds
- Mutual funds
- OEF liquidity risk management
- open-end funds
- regulatory reform
- shock amplification.
- Treasury market