Financial policymakers have urged hedge funds, pension investors and commodities traders to develop stress tests and keep more liquid assets on hand to better withstand shocks from extreme market moves.
The Financial Stability Board, which includes the world’s leading finance ministers, central bankers and regulators, said on Wednesday that after assessing a series of recent market panics, many funds and traders had made “inadequate” preparation for sudden price moves.
Its call increases the scrutiny of so-called “non-bank” financial institutions, which have become a larger part of trading in financial markets since the 2008 financial crisis.