ICI's Paul Stevens at GMM
ICI's Paul Stevens spoke on "Financial Stability: A Conversation with Investors" at GMM Tuesday. He says, "[M]y topic today is the ongoing debate about asset management and financial stability. Both U.S. and global regulators now are examining whether asset managers and investment funds -- including U.S. mutual funds -- should be treated like the largest banks and designated "systemically important financial institutions," or SIFIs. This is not a debate about "regulation" versus "no regulation." ICI and all of its members, both U.S. and global funds, favor sound regulation to address risks to investors and the capital markets. In the past six years, we actively have supported efforts to address abuses and close regulatory gaps exposed by the global financial crisis. No -- this is instead a debate over where and how risks to the financial system at large may occur -- and what the most effective tools are to address such risks, out of the many tools that regulators have at hand. On that score, our position is clear: regulated funds and their managers do not pose risks to the financial system at large; designation of funds or asset managers as SIFIs is unnecessary; and cramming our funds into a framework of bank-style regulation will be deeply harmful to funds, their investors, and the capital markets. If you have followed this debate at all, you may have noticed that this concept of "systemic risk" is pretty slippery -- those bent on finding it seem to detect it everywhere. That is why ICI and many of its members have worked hard to assemble a large, growing body of hard data and analysis; to describe industry norms and practices; and to educate policymakers about the structure and experience of regulated funds both in the U.S. and abroad -- all to bring some rigor to the dialogue. Ultimately, the critical voices in this debate will be the voices of fund investors -- the 90 million Americans who seek to meet their financial goals by investing in our diversified, well-regulated, and relatively low-cost funds. It is important that we make sure our investors understand what’s at stake—the consequences they will suffer if regulators insist on regulating mutual funds as if they were banks."
