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ESMA’S consultation paper on the review of the methodology included in the guidelines on stress test scenarios under the MMF regulation (MMFR)

EU Fund regulation | Money Market Funds
02 May 2023 | Policy Position
EU Fund regulation
Money Market Funds

In our response to ESMA on its review of the guidelines on stress-testing parameters for Money Market Funds (MMFs), EFAMA cautions against using overly simplistic assumptions.


These include modelling unrealistic weekly portfolio outflows from retail investors, when historically these have never materialised. We also question the assumption that MMF redemptions must and can always be met by selling assets, as asset managers’ experience over recent market events suggest otherwise. Lastly, aggregating individual stress-test results to create macro-systemic shock scenarios will inevitably yield “false positives”, particularly in the absence of sufficient and reliable market data on money market instruments.

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