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13 April 2011

BIZ Papier: Marktstruktur und systemische Risiken bei Exchange-Traded-Fonds


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This paper examines the operational frameworks of exchange-traded funds and identifies potential channels through which risks to financial stability can materialise.


Crisis experience has shown that as the financial intermediation chain lengthens, it becomes complicated to assess the risks of financial products due to a lack of transparency as to how risks are managed at different levels of the intermediation chain.

Exchange-traded funds, which have become popular among investors seeking exposure to a diversified portfolio of assets, share this characteristic, especially when their returns are replicated using derivative products.

As the volume of such products grows, these replication strategies can lead to a build-up of systemic risks in the financial system.




© BIS - Bank for International Settlements


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