The IOSCO Research Department published a staff working paper, titled “A Survey of Securities Markets Risk Trends 2014: Methodology and Detailed Results,” which provides a detailed analysis of responses to IOSCO’s annual survey on market trends and emerging risks.
The working paper on the survey, which was conducted in March 2014, is based on some 200 responses and aims to gather views on emerging trends within securities markets to help identify risks that may not be captured by normal statistical analysis or desk research.
The main points:
- concerns about issues considered “macro-prudential,” especially in the areas of banking vulnerabilities and capital flows;
- concerns about “micro-prudential” risks clustered around the areas of corporate governance, financial risk disclosure, shadow-banking activities and regulatory uncertainty;
- while regulators see risk as emanating from illegal conduct, corporate governance, financial risk disclosure, and benchmarking issues, market participants are more concerned with risk arising from the search for yield, resolution and resolvability plans, central counterparties (“CCPs”) and market fragmentation;
- the impact of cross-border flows, financial risk disclosure and CCPs generally has drawn more attention between 2013 and 2014 than previously;
- respondents repeatedly cited three trends as major concerns: regulatory uncertainty, banking vulnerabilities and volatile capital flows; and
- increased awareness that cyber crime and cyber-related issues could be a threat to systemic stability.