Martina Kelly, Director of Funds at IOB, spoke to Martin Moloney about potential structural vulnerabilities associated with asset management activities and recent events related to investment fund liquidity. Martin provided a number of very interesting insights including some thoughts on the impact of high levels of leverage.
On the topic of leverage in funds he observed that… “If you allow leverage to expand uncontrolled then you will put far too much pressure on liquidity management… We really do have to take on the really difficult question of leverage but we have to do it without so constraining markets that they cannot operate properly”
Martin Moloney is the Director General of the Jersey Financial Services Commission.
Prior to taking up this role at the JFSC he was Special Advisor on Risk and Regulation at the Central Bank of Ireland. Before that, Martin headed up a number of Divisions within the Central Bank, including Markets Policy, Markets Supervision and the Legal and Finance Divisions respectively.
During his time at the Central Bank Martin carried out a number of roles at IOSCO, ESMA and the ESRB. In particular he chaired the Investment Management Standing Committee of ESMA at a time when the ESMA guidelines for stress testing money market funds and UCITS were being developed. He chaired the ESRB Expert Group on Investment Funds which was responsible for delivery of the December 2017 recommendations on liquidity and leverage risks in investment funds. He was a member of the Board of IOSCO and the Irish alternate member of the Board of Supervisors of ESMA.