The International Monetary Fund said that mutual funds can ignite global volatility, through their dealings in less liquid financial instruments, and policy makers should be wary of these risks.
And the Bloomberg news agency quoted Fabio Natalusi, deputy director of the International Monetary Fund and co-author of a report published on Tuesday, as saying that mutual funds, known as open-ended funds, have global assets worth $41 trillion, representing about 20% of the total assets of the non-bank financial sector worldwide. world level.
According to the research, as assets are sold, the cash flow may seem out of balance, and fund managers face difficulties as a result of the increased volatility.
This might cause the financial system to become unstable and would amplify the effects of any first shock.
In order to more accurately assess mutual investment funds’ vulnerabilities, the IMF demanded that public entities improve oversight over their cash management practises.
IMF: Market volatility could be sparked by mutual funds
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