Plain-vanilla investment products such as mutual funds and exchange-traded-funds can pose financial stability risks, notes IMF report.
In its April 2015 report on “The Asset Management Industry and Financial Stability”, the IMF notes oversight of asset management industry should be strengthened, with better microprudential supervision of risks and through the adoption of macroprudential orientation.
Asset management industry intermediates $76 trillion assets
According to the IMF report, in advanced economies, the asset management industry has been playing an increasingly significant role in the financial system, especially through enhanced credit intermediation by bond funds. The report notes globally, the industry now intermediates assets amounting to $76 trillion, translating into 100% of world GDP and 40% of global financial assets:
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