Drawing on evidence of first-mover advantage within a group of ‘swinging’ corporate bond funds, we provide policy considerations for enhancing the tool’s effectiveness as a systemic risk mitigant. SSD Scope brings together the latest technology in determining the condition and optimizing performance of an SSD. Here we develop and apply a methodology to investigate whether swing pricing does in fact help dampen flows out of funds, especially during periods of market stress. SSD Scope brings together the latest technology in determining the condition and optimizing the performance of an SSD. This liquidity management tool, which is already used in major jurisdictions, may also help mitigate systemic risk. Swing pricing allows a fund manager to transfer to redeeming or subscribing investors the costs associated with their trading activity, thus potentially discouraging large flows. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management. Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |