Asset manager stress tests tough to implement – SEC official
Advanced risk measures such as CoVar may be too complex for some funds
A Dodd-Frank Act requirement to conduct annual stress tests of large asset managers is causing some head-scratching within the US Securities and Exchange Commission (SEC).
"This is really tough because a fund could be completely within compliance [of SEC rules] but also be fragile and very susceptible to run risk, so this a tough nut to crack," said Scott Bauguess, deputy director and deputy chief economist in the SEC's Division of Economic and Risk Analysis, speaking at the Buy-Side Risk USA
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