Securities Market Risk Survey by IOSCO

Research department of IOSCO published a working paper, “A Survey of Securities Markets Risk Trends 2014: Methodology and Detailed Results,” which provides a detailed analysis of responses to IOSCO’s annual survey on market trends and emerging risks.

According to IOSCO,  "The main purpose of the survey is to gather views on emerging risks to/within securities markets and help identify/highlight pockets of risk that may not be captured by normal statistical analysis or desk research."

Six questions was sent to all potential participant and main question is to " “identify from the 

list, five areas that you see as most important to explore for your jurisdiction when it comes to 

maintaining financial stability"

The main points-

• concerns about “micro-prudential” risks clustered around the areas of corporate governance, financial risk disclosure, shadow-banking activities and regulatory uncertainty;
• concerns about issues considered “macro-prudential,” especially in the areas of banking vulnerabilities and capital flows;
• Responses differ by organisational type; regulators see risk emanating from illegal conduct, corporate governance, financial risk disclosure and benchmarking issues, while market participants are more concerned with risk in the areas of search of yield, resolution and resolvability plans, CCPs and market fragmentation.
• the impact of cross-border flows, financial risk disclosure and CCPs generally has drawn more attention between 2013 and 2014 than previously;
• Three risks have been consistently and frequently mentioned during these three years:
  regulatory uncertainty; banking vulnerabilities; and capital flows.
• Over time some risk areas have gained attention while others have lost attention. The speed of change can be very fast. Sovereign debt and the global economic slowdown were prominent two years ago, but not now.