But for funds investing in corporate bonds and even less liquid assets, it could be. So perhaps it should be no surprise that funds holding corporate bonds see redemptions that are seven times more sensitive to price moves than in equity funds and twice as sensitive as in sovereign bond funds. 20 (slide 14) Fortunately – as many of you know – there are normally other measures in place, from swing pricing and dilution levies to gates and suspensions. But, in a severe market stress it is not at all clear that such measures can be calibrated with the necessary precision or (to echo Jon Cunliffe) “whether their activation would dampen or amplify redemption pressures across the market generally”  Moreover, the impact of greater selling pressure under stress could be magnified by the coincident decline in corporate bond market liquidity more generally. Market-makers have become less active in their market making. Our analysis suggests that, in response to asset sales by high-yield bond funds, the extent to which dealers are willing to see their inventories of corporate bonds increase has shrunk by a factor of about seven. 21 (slide 15)  The flipside is that market prices respond twice as much to asset sales as they did, in order to draw in other buyers in a short timeframe.22  As with derivatives and collateral, we need better diagnostic tools to assess these risks (slide 16). That’s why we’re investing in simulation models to test what it would take for there to be material market impacts.
SME Financing and Business Linkages in Zambia – Focus Financial Services. Further, the programme will include panel discussions on policy recommendations and an interactive session. The discussion panel will, among others, cover policy issues and outline some possible recommendations for action. Chairperson As I conclude, allow me to thank the presenters and panelists for accepting to facilitate our deliberations at this Forum. I urge all delegates to engage fully in these discussions so that we can collectively develop pragmatic solutions to the financing challenges facing Zambian businesses. Thank you for listening. 2  BIS central bankers’ speeches