On 4 July 2023, the European Systemic Risk Board (ESRB) published a compliance report, which provides an assessment of the implementation of its Recommendation of 7 December 2017 on liquidity and leverage risks in investment funds.

The Recommendation is addressed to the European Commission and the European Securities and Markets Authority. It aims to address systemic risks related to liquidity mismatches and the use of leverage in investment funds.

The compliance report provides a recap of the Recommendation’s policy objectives and summarises the methodology set out in the ESRB Handbook, which establishes the procedure for assessing compliance with ESRB Recommendations. Overall, the compliance report finds that there is a significant level of compliance with the Recommendation.