Europe loves the easy way
Bank of England governor Mark Carney has said funds that invest in illiquid assets but allow investors instant access to their money are “built on a lie” and called for changes to regulations. ... “These funds are built on a lie, which is you can have daily liquidity,” Mr Carney told MPs at a parliamentary hearing.Jun 26, 2019This is a big deal. You can see something that could be systemic,” he told the cross-party Treasury Select Committee. “These funds are built on a lie, which is that you can have daily liquidity for assets that fundamentally aren’t liquid.”
In Europe instead of making difficult to invest in Hedge Funds and other complex instruments the regulators are packaging complex things in UCITS or ETF's and the client believes he has daily liquidity until he has a surprise.
what should the regulators do?
Clearly setting the investor liquidity with a marging for a lack of perfert markets.
to let any product with credit to have daily liquidity for the investor is ridiculos. It's a lie
Europe loves the easy way, UCITS it's the easy way. The hard way would be to buy certain complex instruments clients must accept quarterly liquidity (or whatever is appropriate). If they might need the money in a hurry they are not suitable for the product.
easy way = Problems and surprises later
hard way= difficult sell but no surprises
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