Washington, DC – MFA President and CEO, Bryan Corbett issued the following statement in response to the Financial Stability Board’s (FSB) leverage in nonbank financial intermediation (NBFI) report released today:
“It is encouraging to see the FSB recognize the important role of leverage in supporting efficient capital markets and economic growth. We welcome its focus on enhancing central clearing and counterparty risk management as targeted tools to address risky forms of leverage, and agree that current leverage measurement approaches are inflexible and flawed. Regulators should focus on simplifying and harmonizing data collection regimes to ensure the right information is gathered to properly surveil markets.
“The report’s recommendations on blunt entity-level caps and minimum haircut requirement are not appropriate tools to reduce risk in the financial system, and could have unintended, negative consequences for economic growth and financial stability.
“The alternative asset management industry is working with jurisdictions around the world to ensure that leverage is properly understood as an important component of thriving markets.” — Bryan Corbett, MFA President and CEO
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About the global alternative asset management industry
The global alternative asset management industry — including hedge funds, private credit funds, and hybrid funds — serves thousands of public and private pension funds, charitable endowments, foundations, and other global institutional investors. The industry provides portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets throughout the economic cycle.
About MFA
Managed Funds Association (MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 fund manager members, including traditional hedge funds, private credit funds, and hybrid funds, that employ a diverse set of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate attractive returns throughout the economic cycle.
