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Asset management poses mounting risk to stability, BoE warns

"Regulatory pressure for a clampdown on the world’s $87tn asset management sector intensified on Friday as a leading Bank of England policy maker warned the industry posed mounting risks to financial stability.

"Andy Haldane, a member of the BoE’s Financial Policy Committee, warned that the asset management industry risks exacerbating the financial sector’s boom-and-bust cycles and urged supervisors to develop new regulatory tools to deal with this challenge.

"In a speech in London, Mr Haldane said that existing tools aimed at curbing risks that were brewing in the financial system were focused on banks and their capital requirements, but that the perimeter of so-called “macroprudential” policy may need to be extended to firms which were not indebted, including asset managers. “This is the next frontier for macroprudential policy,” he said."

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