Low interest rates are leading investors to seek riskier investments to beat inflation which could be storing up future problems in the financial system, according to the Financial Stability Board (FSB).
The board raised concerns at a meeting in Rome yesterday to assess vulnerabilities affecting the financial system.
In a note it says there are signs the low interest rate environment, which has been necessary to support growth and financial sector recovery, may be leading investors to search for yield in more complex non-standard market segments.
The result is investors are increasing their exposure to liquidity risks, it says.
Developments in exchange traded funds (ETFs), commodities and high-yield markets are examples that warrant "closer surveillance" by regulatory authorities, including the FSA, it says.
The FSB co-ordinates at the international level the work of national financial authorities and international standard setting bodies in the interest of financial stability. It is chaired by Mario Draghi, Governor of the Bank of Italy.
No preferred charging model
To 1,552 families and businesses
HL and Liberty SIPP slowest
Lifetime and annual allowances