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Lessons from Covid on non-bank financial intermediation

Day 2 Morning

Thursday 15 April

Track :

CMU 2.0

Speakers

Chair
Robert Ophèle
Chair - Autorité des Marchés Financiers (AMF)
Public Authorities
Gerry Cross
Director of Financial Regulation, Policy and Risk - Central Bank of Ireland
Nausicaa Delfas
Executive Director of International - Financial Conduct Authority (FCA)
Francesco Mazzaferro
Head of the European Systemic Risk Board Secretariat - European Systemic Risk Board (ESRB)
Luigi Federico Signorini
Deputy Governor and Member of the Governing Board - Banca d'Italia
Industry Representatives
Joanna Cound
Managing Director, Global Public Policy - BlackRock
Timothy Cuddihy
Managing Director, Financial Risk Management - The Depository Trust & Clearing Corporation (DTCC)
Dennis Gepp
Senior Vice President, Managing Director and Chief Investment Officer, Cash - Federated Hermes – International

Objectives

The objective of this session is to discuss the potential vulnerabilities that remain to be addressed in the investment fund sector and more broadly in connection with non-bank financial intermediation activities (NBFI) in the EU and the policy measures that may be needed for ensuring the resilience of these products and activities going forward. 

More specifically, the panel will assess the main causes of the stress experienced by certain investment funds at the outset of the Covid crisis and the implications of margin calls for market liquidity, the possible vulnerabilities that this episode revealed and the measures proposed by the EU public authorities (notably ESMA, ECB) and the industry for tackling these issues. 

Points of discussion

  1. What are the possible vulnerabilities exposed by the March-April 2020 events in the EU non-bank financial intermediation (NBFI) sector and how widespread are they? What are the issues that need to be addressed in priority for alleviating market stress risks and limiting central bank intervention in the future?
  2. What are the priority policy measures needed for mitigating liquidity risks and ensuring the resilience of NBFI activities in the EU? Have they been appropriately identified by the current EU initiatives? Is a further development of the macro-prudential toolkit needed?