BoE paper finds benefits from swing pricing
Cost-benefit analysis suggests net benefit to curbing non-bank liquidity risk through swing pricing
Swing pricing appears to yield a net benefit when used to reduce the impact of liquidity mismatches on financial stability, economists at the Bank of England find in a new paper.
Benjamin King and Jamie Semark carry out a cost-benefit analysis of more extensive use of swing pricing by open-ended funds (OEFs) operating in the UK corporate bond market. “Promoting greater consistency” of swing pricing was one proposal backed by UK regulators in a recent review of liquidity risks in the non-bank
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