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Carney says see risk of disorderly unwinding of portfolios
March 26, 2015 / 6:10 PM / in 3 years

Carney says see risk of disorderly unwinding of portfolios

FRANKFURT, March 26 (Reuters) - The global financial system is safer but there is no room for complacency because of to concerns about the international bond market, Financial Stability Board Chairman Mark Carney said on Thursday.

The FSB coordinates financial regulation for the Group of 20 economies (G20) and has been introducing tougher rules for banks and markets to plug gaps highlighted by the 2007-09 financial crisis.

Carney, who is also governor of the Bank of England, said the financial system was now safer, simpler and fairer but there were concerns about liquidity, or the ability of investors to sell holdings smoothly, in bond markets.

“Market adjustments to date have occurred without significant stress. However the risk of a sharp and disorderly reversal remains given the compressed credit and liquidity risk premia,” Carney told a news conference after a meeting of the FSB.

“As a result, market participants need to be mindful of the risks of diminished market liquidity, asset price discontinuities and contagion across asset markets,” he added.

Reporting by Paul Carrel and Frank Siebelt, writing by Huw Jones, editing by

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