Super-regulator warns of 'disquieting developments' in ETFs

The FSB, established to coordinate the work of financial regulators across the globe, made the comment in its note entitled Potential financial stability risks arising from recent trends in ETFs. The paper, published today, argues the "remarkable" growth of the industry warrants increased attention from both supervisory bodies and the ETF industry as a whole, "including providers, market-makers and investors". A specific area of concern is the increased provision of synthetic ETFs, where the use of swaps "may constitute a powerful source of contagion and systemic risk." However, pr...