Loan market liquidity concerns - Financial Times Alphaville's Alexandra Scaggs is concerned that "there are currently five ETFs that invest in leveraged loans," and that these exchange-traded funds with intraday liquidity have a mismatch with the illiquid underlying loans: "The problem with using liquid open-ended vehicles (like ETFs and mutual funds) to invest in illiquid assets is not as dry as settlement time. Instead, it is the chance that a negative feedback loop will occur if this currently booming market turns sour. If poor performance in these funds leads to withdrawals, that could lead to even worse performance, and more withdrawals, and so on. In short, they create the risk of a fire sale...." Please don't tell individual investors to buy leveraged loans
Mon May 21 G20 foreign ministers in Buenos Aires. | Tue May 22 House may vote on Senate-passed Dodd-Frank bill. | Wed May 23 GSE hearing. FOMC minutes. | Thu May 24 Cybersecurity hearing. | Fri May 25 EU's GDPR takes effect.
Flipping Volcker: In a much anticipated overhaul of Volcker, the Federal Reserve and other regulators are planning to drop an assumption written into the original rule that positions held by banks for less than 60 days are speculative - and therefore banned.... Instead, banks would have leeway to conclude that their trades comply with the rule, putting the onus on regulators to challenge such judgments.... Volcker rule rewrite is said to drop trading burden on banks
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