Market Risk Trends for 2015

Expert views were collected from regulators across the globe on risks to (and within) global securities markets, offering us some insights into what is happening both at home and abroad, and what investment risks are at the top of the list for the market. 

This year’s survey covers two extra areas compared to the previous three years, including investor protection and issues that may impede fair, efficient and transparent markets.

The main areas of concern are:

Financial Security

  • Cyber security is a major and ongoing concern
  • Banking vulnerabilities, exit strategies, housing markets and capital inflow are great sources of risk
  • Government scandals – fixings, conduct issues, corporate governance problems
  • Financial risk disclosure, shadow-banking activities, poor conduct, in particular by regulatory conduct
  • Regulators are more concerned with corporate governance issues, while market participants are more concerned on changes to market regulations
  • Emerging markets are concerned about capital flows
  • Risks were identified outside of the system that impact the system, rather than stemming from inside the securities system, for example banking vulnerabilities and the housing market increase securities system risks

Investor Protection

  • Harmful conduct rates at the top of investor protection – capital market participant behaviour matters
  • Concerns are high regarding disclosure and suitability issues, particularly with retail products – cryptocurrencies, crowdfunding, retail FX trading platforms and fund platforms all received a mention

Market Efficiency

  • Market liquidity was considered the greatest challenge to fair and efficient markets

Download the full report SWP7