At a June 29 meeting between the US Financial Stability Board and representatives from the biggest asset management firms, it was decided that asset managers are not “systemically important”.
After 30 banks and 9 insurers were deemed to be “systemically important financial institutions”, as a consequence of which they will be more heavily supervised and regulated, asset managers led a big lobbying campaign to make sure that this would not happen to them.
The campaign was fruitful, as asset managers escaped tighter regulation; though further research and investigations focusing on market liquidity risk were launched.
The news is disappointing for smaller asset managers who would have profited from tighter regulations affecting the big players, as they could have increased their market share. Big banks also have no reason to be happy, as they can only look on as asset managers take on some of the roles that belonged to them before facing stricter post-crisis regulation.
Although efforts to subject asset managers to greater scrutiny did not work, it is interesting to note that regulatory authorities are now shifting their focus away from banks and turning to other crucial elements of finance. The increasing role fund managers play in bond trading and in other securities markets is one of the main concern for policy makers.
Full article: The Financial Times