Buy side turning to stress tests to manage liquidity

Asset managers look beyond quantitative metrics for hard-to-model risk

stress testing

Asset managers are turning to stress testing as a way to manage the risk of illiquidity in their funds, having had difficulty quantifying it in other ways, said risk and portfolio managers at Buy-Side Risk Europe in London yesterday (April 13).

"We are not trying any more to have coincident measures of liquidity or of liquidity at a moment in time, because it can change too quickly," said Paulo Caricati, European head of risk management at Western Asset Management in London.

Instead, the firm

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