Today’s Financial Stability Board’s (FSB) report on leverage in non-bank financial intermediation rightly recognises that leverage—when appropriately managed—can support the real economy, enhance capital markets, and contribute to effective risk management. While the report outlines potential policy tools, AIMA welcomes the FSB’s caution that any regulatory action must be carefully calibrated to avoid market disruption and unintended consequences.

A critical foundation for any such action is high-quality, consistent data. Alternative investment managers already report detailed risk and leverage exposures to regulators, but the usefulness of this data is limited by flawed definitions and fragmented collection frameworks. AIMA urges regulators not to advance further policy proposals until these issues are addressed. We are actively developing proposals to help streamline and harmonise the way data is collected and used.

Banks and other counterparties that provide leverage hold valuable, complementary information. Integrating this data with existing fund-level reporting would provide a more holistic and accurate view of leverage in the financial system. In addition, AIMA sees merit in developing a more harmonised risk reporting to financing counterparties while preserving confidentiality. This would support better risk management by leverage providers and reduce the need for blunt regulatory tools. We stand ready to work with regulators and market participants to design a pragmatic, effective framework for such reporting that enhances transparency without undermining market functioning.

Jack Inglis, CEO of AIMA, the world's largest membership association for alternative investment managers, commented:

“Many of the recommendations in today’s FSB report are already in place across jurisdictions that host the largest alternative investment managers. The real challenge is that the current data framework often obscures more than it reveals. Reforming how data is collected from non-banks—and combining that with information already held by banks—needs to come first. Only then can regulators assess whether any additional policies are needed to manage leverage-related risks.”