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Addressing fund liquidity risks

Day 2 Morning

Thursday 09 September

Room :

Plenary Room 2


Robert Ophèle
Chair - Autorité des Marchés Financiers (AMF)
Public Authorities
Gerry Cross
Director of Financial Regulation, Policy and Risk - Central Bank of Ireland
Dietrich Domanski
Secretary General - Financial Stability Board (FSB)
Francesco Mazzaferro
Head of the European Systemic Risk Board Secretariat - European Systemic Risk Board (ESRB)
Industry Representatives
Omar Chanan
Head of Global Risk Management - Capital Group
Dennis Gepp
Senior Vice President, Managing Director and Chief Investment Officer, Cash - Federated Hermes – International
Simon Janin
Head of Group Public Affairs - Amundi

This session will first discuss the main vulnerabilities that remain to be addressed regarding money market funds (MMF) and whether additional tools and measures are needed in the EU to avoid future episodes of stress, taking into account the lessons of the Covid crisis and the policy proposals recently made by the FSB to enhance MMF resilience. 

The panel will also assess whether other open-ended fund categories are exposed to significant liquidity risks (e.g. certain corporate bond and real estate funds which experienced stress episodes during the Covid crisis) and whether additional tools and measures (at product level, at the level of the underlying markets or macro-prudential tools) are needed to ensure their resilience.

Points of discussion 

  1. What are the main vulnerabilities that remain to be addressed concerning MMFs? What policy options proposed by the FSB seem most effective for significantly reducing the financial stability risks linked to MMFs in the EU, while retaining their benefits? How important is reforming the underlying short term paper market for enhancing the resilience of MMFs and is this feasible?
  2. What are the other open-ended fund categories that remain exposed to significant liquidity risks? Does intermediation by a fund increase liquidity risks that are inherent in all financial markets? Are existing tools, notably liquidity management tools, sufficient to mitigate these risks or are additional measures needed?