Thirty-seven percent of executives at pension funds, sovereign wealth funds, investment management firms and other institutional investors believe the financial reform act signed by President Barack Obama July 21 will make the financial market system safer, according to preliminary results of a survey by Capital Market Risk Advisors, a risk advisory firm.
Its 2010 Risk Concerns Survey found U.S. respondents ranked “government changing the rules” as their chief concern for the year ahead. Tied for their second highest-ranking concern were market volatility and credit losses.
Among non-U.S. respondents, market volatility and credit losses tied as their top concern, with government changing the rules in third.
“The general consensus is the financial reform bill isn’t necessarily going to solve the problem,” Leslie Rahl, CMRA managing partner, said in an interview. “And even though the bill has been passed, there is lots of rulemaking to be done. The devil is in the details in figuring out how the new regulations will be implemented.”
CMRA plans to issue the full survey results Aug. 2, Ms. Rahl said.
The survey was conducted over two weeks, closing July 20, on risk-related concerns, including risk budgeting, risk appetite statements on limits and liquidity, stress testing.
