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Addressing fund liquidity issues: what more may be needed?

Addressing fund liquidity issues: what more may be needed?

Day 3 Morning

Friday 28 April

Room :

ROOM 1

Speakers

Chair
Francesco Mazzaferro
Head of the ESRB Secretariat - European Systemic Risk Board
Public Authorities
Mark Branson
President - Federal Financial Supervisory Authority, Germany (BaFin)
Lee Foulger
Director, Financial Stability Strategy and Risk - Bank of England
Martin Moloney
Secretary General - International Organization of Securities Commissions
Industry Representatives
Joseph J. Barry
Senior Vice President and Global Head of Regulatory, Industry and Government Affairs - State Street Bank
Joanna Cound
Managing Director, Global Public Policy - BlackRock
Simon Janin
Head of Group Public Affairs - Amundi

Objectives

This session will first discuss the main sources of liquidity risk associated with Money Market Funds (MMFs), the measures that have been proposed by the EU and international authorities for enhancing the resilience of MMFs, the main issues that would need to be tackled in a future review of the EU MMF regulation and the need for a reform of short term funding markets (STFMs).
The panel will then assess the potential vulnerabilities arising from open-ended funds (OEFs), to what extent they can be mitigated with the measures proposed in the AIFMD review, such as the extension of liquidity management tools and whether further regulatory measures are needed for tackling these risks.
Comparisons will also be made with the trends observed and actions undertaken for tackling fund liquidity risks at the global level and in other jurisdictions (e.g. the UK, the US).

Points of discussion

  1. How significant are liquidity mismatch issues posed by MMFs and to what extent are they related to structural features of MMF products? What is the most appropriate combination of options for enhancing the resilience of MMFs? What should be the next steps at the EU and international levels for addressing MMF liquidity risks? How important is a reform of the underlying short term funding markets (STFMs)?
  2. Are the main liquidity risks posed by open-ended funds (OEF) clearly identified and have recent stress events revealed any additional fragilities? Are OEF liquidity risks appropriately addressed by the measures proposed in the AIFMD review and initiatives underway at the international level? What are the factors of success of these measures and what additional actions may be needed?