Dear Ladies and Gentlemen,
Last week, the European Central Bank (ECB) published its bi-annual report on financial stability and addressed a number of potential risks to financial stability that could also selectively emanate from the fund industry. In this context, the Bundesverband Alternative Investments e.V. (BAI), the central lobby of the alternative investment industry in Germany, advocates for a differentiated analysis.
BAI Managing Director Frank Dornseifer comments the ECB report as follows: “The ECB's warning words in the latest Financial Stability Report show the dilemma or causally linked dilemmas in a remarkable way. In the ongoing low-interest environment, classic interest-bearing securities, especially those with a high credit rating, have more or less become obsolete while investors of all kinds have to restructure; partly into bonds from the corporate or government sector with a lower credit rating, or into alternative investments such as infrastructure, private equity, private debt, etc., in order to avoid the risk of a crisis. This shift is not necessarily, but can potentially be, associated with higher risks in individual cases.”
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