Liquidity risk management has been in the headlines recently, driven by regulatory concerns that another liquidity crisis similar or worse than the one endured in 2008 is inevitable.
ESMA has been the key proponent in Europe publishing various notices including new Liquidity Stress Testing Guidelines that come into effect on 30 September this year requiring fund managers operating under UCITS and AIFMD to ensure liquidity stress testing processes are effective and timely. The need for realistic liquidity management and ongoing review of both portfolios and investor profiles is mandatory. The ongoing coronavirus situation has served to emphasise the regulators' fears surrounding liquidity and while volatility is a necessary part of a manager's trading philosophy fo...
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