The Financial Stability Board (FSB) today published Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities. The document sets out 14 final policy recommendations to address the following structural vulnerabilities from asset management activities that could potentially present financial stability risks:
- liquidity mismatch between fund investments and redemption terms and conditions for open- ended fund units;
- leverage within investment funds;
- operational risk and challenges at asset managers in stressed conditions; and
- securities lending activities of asset managers and funds.