ESMA’s asset management warning

ESMA has just published its Trends, Risks and Vulnerabilities (TRV) report for 2019. The report says that there is a deteriorating outlook for the asset management industry and continued very high market risk.

ESMA writes the following: ‘Recent trade tensions have triggered renewed volatility, and concerns over a no-deal Brexit remain key risk drivers for the second half of 2019. Investors are facing very high market risk, as they navigate an environment of potentially inflated asset valuations, subdued economic growth prospects, and flattening yield curves. Changed monetary policy expectations may boost their risk appetite and reignite search-for-yield strategies, leaving investors vulnerable to volatility episodes and abrupt shifts in market sentiment. Credit risk and liquidity risk remain high, with isolated events highlighting pockets of risk in the asset management industry.

To read more on this story see the September issue of The NED.