ALFI responded to the IOSCO consultation on a proposed framework for assessing leverage in investment funds
14 February 2019 | Statements and Position Papers
IOSCO closed the consultative period on 1 February 2019 for respondents to comment on the proposed framework to help measure leverage used by investment funds, which in some circumstances could pose financial stability risks.
The consultation followed on from recommendations published by the Financial Stability Board (FSB) in January 2017 to address risks to global financial stability arising from potential structural vulnerabilities that may result from asset management activities.
IOSCO’s proposed framework aimed to achieve a meaningful and consistent assessment of global leverage, in two steps:
- Excluding from consideration funds that are not likely to create stability risks to the financial system and identifying a subset of funds for further analysis; and
- Conducting a risk-based analysis on this subset of funds.