PrefBlog

IIROC has released a 113 page report on ABCP. For those who have no time to read the entire thing, here’s the official PrefBlog summary: Don’t sell stuff that goes down, OK guys? Only sell stuff that goes up.

The focus of the report is on “suitability”; the words “concentration” and “diversification” each appear exactly once, in the sections describing the paper itself, not the client’s portfolio. Given that the Capital Asset Pricing Model, with its emphasis on risk reduction via diversification, is only about 40 years old, it is hardly surprising that the concept is foreign to the regulators.

This entry was posted on Friday, October 17th, 2008 at 5:58 pm and is filed under Interesting External Papers, Regulation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.