Concerns over the possibility that ETFs could lead to systemic risk are hardly new.
I’ve certainly written about them enough, starting with a controversial report in September about whether an ETF could collapse, and another, in November, with the Kauffman Foundation study about systemic risk.
In each case the critics assailed the reports as having been written by people who in, in some way, are biased in favor of the traditional mutual fund industry.
Never mind how nonsensical that is: The risks are and were real — even if they never amount to anything.
But now several warnings are coming back-to-back-to-back that can't be ignored:
- from the International Monetary Fund,
- and the The Bank for International Settlements — no slouch organization, considering that it is the central bank of all central banks.