IMF warns smaller funds can pose systemic risks

The International Monetary Fund (IMF) has said large funds are not the sole contributors to systemic risk issues and has called for asset managers to be subject to stress tests.

In a chapter of its twice-yearly Global Financial Stability Report, the IMF called for further scrutiny of the asset management industry, suggesting a revamp of oversight methods is needed. It said regulators should move to a more “hands-on” supervisory approach, involving better data, risk indicators, and analysis including stress tests. The call is the latest sign that the funds industry is entering an era of greater regulatory scrutiny, as assets under management swell and fund groups become the dominant players in some markets. Certain fund houses have already prepared their re...