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SEC Commissioner: PIMCO Outflows Aren't Disrupting Markets

SEC Commissioner: PIMCO Outflows Aren't Disrupting Markets

There’s no evidence that the recent turmoil at PIMCO caused any disruption in any of the underlying markets, Securities and Exchange Commission Republican member Michael Piwowar said Thursday.

Piwowar has been closely watching the situation. “We are monitoring it and I’ve asked the staff to keep me briefed on it on a weekly basis in terms of assets leaving the firm, outflows, those types of things,” he told attendees of the Financial Services Roundtable's Global Financial Summit.  He added that the recent activity at PIMCO—investors pulled $23.5 billion out of PIMCO Total Return Fund in the last month—would make a perfect case study for the Office of Financial Research, OFR.

“Here we have a huge asset manager, just in general terms, but also a very big player in a number of the specific sectors and we’re seeing massive outflows coming out of this fund—they seem to be tapering off the latest data suggest, as one would expect—but we’ve seen no evidence that its creating and disruptions or any potential instability of the financial system.”

It remains to be seen if this will last, however, with Sanford C. Bernstein estimating 30 percent of PIMCO’s $2 trillion in assets could migrate to other managers.

What do you think? Will the leadership changes and recent performance of PIMCO eventually cause wider market disruption?

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