In this analysis, we examine the IMF’s recommendation for regulating asset management based on its fears that this type of “shadow banking” poses systemic risk unresolved in the spate of post-crisis regulation. To be sure, the Fund favors the SEC’s new redemption standards for money-market funds (see Client Report MMF14), but it remains deeply concerned about an array of threats to financial stability despite recognizing that asset managers are in some ways more resilient than banks and also provide a “spare tire” of market liquidity when banks are stressed. The report takes no position on designation for specific asset-management firms despite renewed efforts by the Financial Stability Board and IOSCO to craft a designation methodology (see FSM Report SYSTEMIC70).  Instead, the Fund is focused on activities and practices that warrant policy action, an approach the FSOC is also considering (see FSM Report SYSTEMIC75).  The IMF lays these out, but also notes that it has yet to tackle operational risk, risk related to “hidden leverage,” and securities lending.  Issues related to resolution are only touched upon despite recent global protocols for this sector (see FSM Report RESOLVE29). 
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