Sentences with phrase «liquidity risk if»
In the Minutes from the January FOMC meeting, the Federal Reserve addressed the financial situation, and noted that the increasing role of bond and loan mutual funds could pose a liquidity risk if everyone tries to get out of the market at the same time.
http://www.businessinsider.com/ Not exact matches
«Finally, the increased role of bond and loan mutual funds, in conjunction with other factors, may have increased the risk that liquidity pressures could emerge in related markets if investor appetite for such assets wanes.»
Despite having share prices that move with market prices, these funds can give rise to first - mover advantages for redeeming shareholders and create the potential for destabilizing waves of redemptions and asset fire sales if liquidity buffers and other tools to manage liquidity risk prove insufficient.
Chapter 1 concludes that although economic benefits of monetary ease are becoming more evident in some economies, market and liquidity risks have increased to levels that could compromise financial stability if left unaddressed.
The liquidity risk is particularly high if the issuer has put its money into long - term projects that can not be sold quickly to raise cash.
He also said that there's a risk of a double - dip recession «if liquidity disappears.»
If, on the margin, liquidity begins to decline in 2018 resulting from QT, fed rate hikes and other central banks ending their QE programs, there is a reasonably high probability that risk assets will suffer.
If the proposal goes through, FinTech companies applying for a special purpose national bank charter will have to have a robust, well - developed business plan, and a governance structure, capital levels, and liquidity that take into account the risks and complexity of its activities and services.
This isn't that hard to do if the products are structured and sold in a manner that is most beneficial to retirees seeking liquidity, the ability to capture a risk premium, and longevity protection.
If many market - makers are reducing risk at the same time, markets lose liquidity.
If traded, one will find these options have different payouts, fees and risks, not to mention an entirely different liquidity structure and investment process.
What happens to my funds if the volatility and liquidity risks move against Abra, causing in worst case Abra to go bankrupt?
Despite the fact that the business doesn't really have any additional risk — the product, remember, can be returned to the vendor if it is not sold — some investors and analysts treat this debt as an obligation that could threaten liquidity!
Risks to our baseline: banks do not need more central bank liquidity at the moment and even if they did, the ECB's refinancing operations continue to be conducted through fixed rate, full allotment procedures until at least end - 2017.
Weeklys give you more flexibility, like being able to invest 48 weeks out of the year (instead of only 8 months) if you want to avoid earnings risk for a particular stock, but most of them come with wider bid - ask spreads and lower liquidity, making them challenging to roll or exit early.
The worst - case risk you'd need to accept is zero liquidity and complete loss: If there's no eventual buy - out or IPO, the shares may (effectively) be worthless.
I'll have to look more into it to see if there is a real advantage for me vs. the increased risk of reduced liquidity.
Given that the company is now in hibernation mode and a sale or liquidation is imminent, however — and the strong argument the dissidents have presented that shareholders face substantial risk if the board will not guarantee downside protection for their liquidity option — we believe shareholders would be best served by replacing the incumbent board with the dissident slate of nominees.»
Sean Ryan, Senior Analyst, Research, at MPI (Markov Processes International) asks if there is more danger in High Yield Bond Funds, warning that investors reaping rewards from high yield returns should beware the dangers of liquidity risk.»
There is something — lower risk, higher return, greater liquidity, an imbedded put or call option to the holder or issuer, or some other wrinkle — that makes it appear superior (new and improved, if you will) to anything that came before.
Hauptman notes there liquidity risks in these products because investors are locked in for a certain period of time — often 10 or 12 years — if they don't want to pay penalties.
In addition, risk - averse investors require higher expected return if the asset's market - liquidity risk is greater.
The liquidity risk I've exposed myself to is significant and I wouldn't have purchased these securities if I wasn't confident in the underlying business, their cashflows, credit ratings or business models.
• Investments in the commodities market and the natural - resource industry may increase the fund's liquidity risk, volatility and risk of loss if adverse developments occur.
With uncertainty over Fed moves, there's also liquidity risk — if banks decide to stop making the large short term loans, the value of the underlying REIT will decrease.
Okay, two more if you are a glutton for this kind of stuff: Liquidity Management is the First Priority of Risk Management, and The First Priority of Risk Control.
Edit: As Michael Pryor points out in a comment below, there is liquidity risk — if you need the money before the bond matures, you could lose principal.
Even if you manage investment risk and the risks associated with leverage, it is very difficult to manage the other risks of CFDs - such as counterparty risk, client money risk, liquidity risk, gapping and execution risk - and these could result in losses you did not expect.
Liquidity risk: if the bond issuer's credit rating falls or prevailing interest rates are much higher than the coupon rate, it may be hard for an investor who wants to sell before maturity to find a buyer.
The letter emphasizes, «Effective disclosure of the market risks from climate change would focus on how low - carbon scenarios would impact commodity demand and price and include the knock - on effects of those shifts on future capital expenditure plans, liquidity and reserves valuations, if any.»
«If, over the next [one to two] decades, the coin market evolves to a more mature state such that one day most coins are attached to well - established companies and trade with sufficient liquidity so as to reduce risk, we believe the gap between ICOs and IPOs will look fairly small.
The biggest risk, in our view, is the GBTC, as an ETN [exchange - traded note], could face a liquidity problem --- if there is an all out panic.
If the regulatory burden was not literally impossible to get through — we would have fully operational and regulated bitcoin exchanges in the US — regulated by US regulators — which would also add liquidity to the market and help with the volatility risks.
«If regulators express that they are comfortable with bitcoin and bitcoin businesses operating in the US, large entities, who are very wary of legal risk, would enter the market, greatly increasing liquidity.»
Insufficient liquidity: If the borrower doesn't have a heavy down payment (20 % -30 % for most banks) and strong excess liquidity, banks don't want to take the risk on funding their loan.