European supervisors warn of risks in valuing illiquid assets

first_imgThe report said: “Risks resulting from low interest rates and search for yield remain unchanged.”The fragile economic recovery is still hitting profitability in the financial sector, it said.It added that market uncertainty linked to Greece’s financial situation had led to capital controls, high market volatility and renewed risks to the cohesion of the euro area, though it noted that a pact between Greece and the other euro-area countries had mitigated immediate risks.Reduced corporate bond market liquidity has exposed asset managers to valuation risks, the report said, adding that managers also face risks because they are investing more in illiquid assets. The authorities said worries about asset managers’ liquidity risks could get in the way of plans to spur economic growth by channelling funds managed by institutional investors to SMEs.Supervisors need to scrutinise efforts to clean up balance sheets and look closely to see how sustainable financial entities’ business models are, in order to manage current risks and make asset owners more able to lend, the report said.“A clear picture of institutions’ earnings potentials, funding mixes and strategies is crucial,” it said. “Promotion of rigorous valuation of assets and liabilities and transparency in the disclosure of valuation risk is essential to discourage mis-valuation tendencies.”They said regulators should go ahead with plans to support market-based funding by, for example, making suitable rules for non-bank loan origination models.They should also support “adequate, transparent and harmonised marketing of investment products”. Three European supervisory authorities have jointly warned that there are still risks in EU financial markets and said that action needed to be taken, particularly to counter the valuation risks that exist in illiquid markets.In their Joint Committee Report on Risks and Vulnerabilities in the EU financial system for August, the European Supervisory Authorities for securities (ESMA), banking (EBA) and insurance and occupational pensions (EIOPA) said risks resulting from low interest rates, the search for yield and low profitability of financial institutions were still there.These risks are just as severe as reported in the March 2015 report, they said.There are also risks related to lower market liquidity and their possible implications for asset managers, according to the supervisors’ latest assessment.last_img read more

Frank de Boer is New Crystal Palace Boss

first_imgFrank de Boer has said that he is excited to join a club that “spend a lot of money” after becoming Crystal Palace boss.The 47-year-old Dutchman, who has signed a three-year deal, succeeds Sam Allardyce, who left after helping Palace avoid relegation last season.“The aim is to be a solid Premier League team, not to struggle with relegation,” said the former defender, who won 112 caps for the Netherlands.“That is our main target – if we do more that’s nice.”Between 2010 and 2016, De Boer managed Ajax, winning the Eredivisie four years in a row between 2011 and 2015. However, he had been out of work since being sacked by Italian side Inter Milan in November after only 85 days in charge – although he said he learned “a lot” from his brief time at the San Siro.“I had a good feeling about the club and the prospect of managing a team in the Premier League was exciting,” added De Boer.“This club can grow further and further. They spend a lot of money and there is the possibility to do something well with that money.“I’ve not met the players yet. We will look at one or two signings, but I think it is necessary to see all the players here first.”American billionaires Josh Harris and David Blitzer took a large stake in the club in December 2015 and promised significant investment.Belgium striker Christian Benteke joined Palace from Liverpool for a club record £27m last summer.And the Eagles earned over £109.6m in television and prize money after finishing 14th in the Premier League last season.De Boer had stints at Ajax and Barcelona, as well as six months at Rangers, during his playing career, while he was also Netherlands assistant manager from 2008 to 2010.He said he had spoken to fellow Dutchman and ex-Manchester United manager Louis van Gaal prior to becoming Palace’s first permanent non-British manager.“I have my own type of coaching and style of playing. We want to be dominant when we can, but also dominate when we don’t have the ball,” he said.“Also for the fans, we must try to be attractive. Palace has a very enthusiastic and passionate fanbase, so they will want to see that.”Eagles chairman Steve Parish said he had been “surprised” by Allardyce’s departure but had consulted with the ex-England boss about his successor.He added that De Boer’s experience of developing young players was one of the attributes that made him suitable for the Selhurst Park club.“It’s fantastically exciting for this football club, an amazing milestone for us,” said Parish.“I am excited to work with him and by what we can achieve with the club.”Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegramlast_img read more