IOSCO Launches Second Securities Markets Risk Outlook

IOSCO today published the Securities Markets Risk Outlook 2014-2015. The Outlook is a forward-looking report focusing on identifying potential risks in securities markets.

As the initial impact of the 2008 financial crisis recedes, securities markets are an increasingly important financing channel for the economy. It is therefore important to identify and analyse the build-up of systemic risk in securities markets.

The Outlook is divided into two parts: Part I describes selected global trends and potential vulnerabilities in securities market, and Part II identifies the potential systemic risks in or related to securities markets.

These potential systemic risks are:

  1. The Search for Yield and the Return of Leverage in the Financial System:
    The current low interest rate environment has set off a search for yield, leading to a resurgence of high-yield products. 

  2. Search for Yield and Volatility Affecting Emerging Markets
    Capital inflows into emerging markets have recovered from the effect of the US Fed ́s suggestion in 2013 of tapering.

  3. Risks in Central Clearing
    The systemic importance of Central Counterparties (CCPs) has grown, as highlighted in last year ́s Risk Outlook. 

The full press release can be found at http://www.iosco.org/news/pdf/IOSCONEWS349.pdf

 

Originally Published: 
01/10/2014