Gensler Delivers Remarks on U.S. Capital Markets

In a recent speech at the Bloomberg Global Regulatory Forum, Securities and Exchange Commission (SEC) Chair Gary Gensler discussed capital markets and the risk of nonbank finance. In his remarks, Chair Gensler noted that “nonbank intermediation is not without risk, on balance, our entire economy benefits from the breadth, depth, and liquidity of our capital markets.” He emphasized that nonbank financial intermediation contributes to price discovery and healthy competition. He added that it is “important to focus on the activities that are more likely to contribute to fragility in the system.”

His remarks touched on the importance of money market funds and potential issues with liquidity mismatch due to the ease at which investors can enter and exit the product. He further added that after the events of March 2020, the Commission broadened the scope of transactions that require centralized clearing. Later in his speech he noted retail investors participate in credit markets through registered investment funds, adding that the Commission adopted amendments to require more frequent portfolio disclosure for registered funds because “more frequent disclosure not only gives investors more regular access to how their funds are meeting their investment objectives, but also supports the Commission’s oversight of these funds.” In his speech he also briefly touched on equity markets and private funds.

Click here to read Chair Gensler’s remarks.