A regulator for the U.S. financial services industry said it was examining liquidity and redemption risks from asset managers and will provide an update on its findings in the next few months.
During a conference call of the Financial Stability Oversight Council, officials discussed "potential risks to U.S. financial stability from asset management products and activities" and "potential financial stability risks related to liquidity and redemption risks," according to a short statement.
The council, created by the Dodd-Frank Wall Street reform legislation, "expects to provide a public update on its analysis this spring."
Regulators are concerned about the impact on markets from sudden redemption requests after the collapse of a junk bond mutual fund run by investment firm Third Avenue in December last year, the biggest mutual fund failure since the 2007-2009 financial crisis.
Last month, a blog from the New York Federal Reserve warned that if all $280 billion of high-yield bond funds, similar to Third Avenue's fund, were to suffer a 50 percent redemption shock, the spillover losses in assets would total $9 billion for the entire open-end mutual fund sector.