It is well understood that in financial markets procyclicality can be determined by behavioural phenomena (euphoria and panics), such as herding.15 In the case of the asset management industry, procyclicality can be exacerbated by the pricing rules for fund shares, the incentive structure for fund managers and the benchmarking of fund performance.16  14  15  16  Some asset managers provide their clients with indemnification, a type of insurance associated with securities lending.
Mr Hayami outlines recent economic conditions in Japan and gives his thoughts on the role of a central bank and its balance sheet Speech by the Governor of the Bank of Japan, Mr Masaru Hayami, at the Kisaragi-kai meeting in Tokyo on 22/12/98. I. Introduction I am truly honored to have this opportunity to speak to you.