Investors Complacent About Financial Market Risks, FSB Says
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Investors are becoming complacent about risks in financial markets as loose monetary policy spurs a search for yield, the Financial Stability Board said today.
Asset valuations are “stretched” and volatility is compressed, increasing the risk of a sharp reversal in prices, the board said in a statement following a two-day meeting in Cairns, Australia. While regulation has reduced leverage in the banking system, it has picked up in other parts of the financial system, including the market for corporate debt, it said.