The Bank of England could urge asset managers to carry out "system-wide" stress testing on investment funds' liquidity in times of crises, deputy governor Sir Jon Cunliffe said.
Speaking at the British Bankers' Association International Banking Conference, Cunliffe said "much more work" needs to be done on assessing fund liquidity as risks escalate. His comments follow the Bank's Financial Policy Committee's (FPC) investigation into how fund groups are guarding against liquidity risks in portfolios as part of July's Financial Stability Report. Cunliffe (pictured) said "a more system-wide approach to stress testing could be one promising avenue for development" in line with the Financial Stability Board's advice. Funds face scrutiny on 'correlated investmen...
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