IOSCO survey pinpoints key risks
17 December 2015 Madrid
Image: Shutterstock
Maintaining market liquidity of secondary trading in bond markets is among the biggest challenges to fair and efficient markets, according to a market risk analysis survey.
The International Organization of Securities Commissions’s (IOSCO) risk outlook survey found that market liquidity, cyber security, volatility in the securities market and ‘harmful conduct’ are the biggest risk factors to the financial market.
The survey, conducted between March and April, gathered views on risks to and within securities markets to help identify pockets of risk that may not be captured by normal statistical analysis or desk research.
Survey respondents also consider cyber security to be a “prominent risk” to financial markets. Shadow banking, corporate governance and financial risk disclosure were highlighted as sectors with exposure to micro-prudential risks.
Most respondents saw financial stability risks to the system either being transmitted or amplified by securities markets.
Regarding the economy, respondents thought that banking vulnerabilities, housing markets and capital flow volatility would have considerable impact on the real economy if these risks materialised.
Harmful conduct is the biggest threat to investor protection, according to survey results.
Harmful behaviour by capital market participants damages the proper function of the capital market, harms the investing public and undermines public confidence and trust in capital markets.
The survey, now in its fourth year, expanded the line of questioning to include not only risks to financial stability, but also the risks to investor protection and to the fair, efficient and transparent operation of markets.
The International Organization of Securities Commissions’s (IOSCO) risk outlook survey found that market liquidity, cyber security, volatility in the securities market and ‘harmful conduct’ are the biggest risk factors to the financial market.
The survey, conducted between March and April, gathered views on risks to and within securities markets to help identify pockets of risk that may not be captured by normal statistical analysis or desk research.
Survey respondents also consider cyber security to be a “prominent risk” to financial markets. Shadow banking, corporate governance and financial risk disclosure were highlighted as sectors with exposure to micro-prudential risks.
Most respondents saw financial stability risks to the system either being transmitted or amplified by securities markets.
Regarding the economy, respondents thought that banking vulnerabilities, housing markets and capital flow volatility would have considerable impact on the real economy if these risks materialised.
Harmful conduct is the biggest threat to investor protection, according to survey results.
Harmful behaviour by capital market participants damages the proper function of the capital market, harms the investing public and undermines public confidence and trust in capital markets.
The survey, now in its fourth year, expanded the line of questioning to include not only risks to financial stability, but also the risks to investor protection and to the fair, efficient and transparent operation of markets.
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