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EFAMA Reply to ESMA CP on Guidelines on Art. 25 of Directive 2011/61/EU (AIFM)

30 August 2020 | Policy position
EFAMA Reply to ESMA's CP on Guidelines on Article 25 of Directive 2011/61/EU

A holistic approach is recommended when establishing whether the use of leverage of AIFs poses leverage-related systemic risk and materially contributes to financial instability. Any regulatory policies on leverage need to be evidence-based and developed with empirical evidence showing the extent to which the use of leverage in AIFs contributes to the build-up of systemic risk. The Covid-19 pandemic is testament that no major dysfunction was reported in terms of use of leverage by AIFs.

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