The are about three main sources of

role of the fund managers is very important for increasing efficiency and
stability in the market but under some circumstances it may cause a systematic risk.
There are three sources of systematic risk in the financial system which arises
from fund management; insufficient credit risk transfer to fund managers; runs
on funds that cause sudden reductions in funding to banks and other financial entities;
and contagion through business ties between fund managers and their sponsors.


Best services for writing your paper according to Trustpilot

Premium Partner
From $18.00 per page
4,8 / 5
Writers Experience
Recommended Service
From $13.90 per page
4,6 / 5
Writers Experience
From $20.00 per page
4,5 / 5
Writers Experience
* All Partners were chosen among 50+ writing services by our Customer Satisfaction Team

to the author Elias Bengtsson the main purpose of the study is evaluating fund
management and systematic risk.The fund managers play very important role in
the financial market as they are responsible for increasing the efficacy and
durability in the market but with all these good contributaions of the fund
managers in the financial market there are few circumstances which later become
the cause of systematic risk and severity of financial crisis. Global financial
crisis give us a more clear idea of how financial managers contribute towards
systematic risk.There are about three main sources of systematic risk in the
financial market that are possibly arised from fund management, that are
insufficient credit risk transfer to fund managers , Funds that cause sudden
resuctions in funding to banks and other finanical entities ,Contagian through
business ties between fund managers and their sponsers. All of these three are
the main sources of systematic risk and there are several ideas are suggested
to reduce the systematic risk.This article is also about the the experiences
from the Globa finanical Crisis (GFC) to know more effectively how fund
management become the cause of systematic risk. The main role of the fund
managers is to attain high risk-adjusted returns for their clients. GFC has
pointed to a number of ways that FMs contribute to systematic risk and the
resent used different rearches to distinguish and discuss three ways in which
FMs contribute to systematic risk. They also discuss two types of fund managers
Traditional fund managers(TFMs) and other are Hedge funds(HFs).These systematic
risks were previously ignored by the policy managers.Kinga and Maier(2009)
notes that destructive channels between banks and HF are mostly intersecting.
After these systematic risk were highlighted the policy makers are not idle and
get to work to minimize the systematic risk in order to enhance their bank
performance.The main policy work is done by FSB’s program on Shadow
banking(2012).there are several other initiatives were taken to reduce the risk
of runs on funds.A committee has been created called Basel committee which make
sure the risk is minimum and strengthened the organization.Still after all of
these measurements the question is still open that will these all strategies
reduce the risk from Financial managers.All of these strategies are not fully
implemented and it is still not sure that these strategies to reduce the risk
can help or will not help at all or may help upto some extent.To get an answer
to this question we will have to wait and implement all these strategies to get
the results.But the extent of effectiveness is still a question and will only
be answered after strictly implimentations of the strategies.History told us
that the business which provide financial services are greatest and the risk is
very low. At the end of this discussion the policy makers are left with a big
job to find the most effective strategies to create a right balance between the
systematic risk.