BoE sounds ETFs warning

Introducing the new Committee's first Financial Stabilty Report, Bank governor Mervyn King outlined members' concerns around the use of "complex and opaque funding structures" which might disguise the build-up of risk. "ETFs provide one example of a contributory factor to this tangled web," he said. "For good and proper reasons, these funds have grown rapidly in recent years, with the size of the European ETF market now estimated to exceed $300bn. "But complexity has begun to creep in, especially through so-called synthetic ETFs. And the assets of ETFs are increasingly being used as a...