BoE’s Cunliffe sees liquidity risk in rise of investment funds
Investors have poured money into less liquid instruments
Market finance in the UK has grown in importance since the global financial crisis, but it may be contributing to the build-up of liquidity risks, warned Jon Cunliffe on February 9.
Although the Bank of England deputy governor saw a valuable role for market-based finance in opening up access to funding and diversifying risks, he also observed rapid inflows into investment funds and hedge funds.
“The bulk of flows into funds since the crisis have been into funds invested in less liquid debt
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