Mar 28, 11:54 AM

Private Credit Industry Debates Impact of Liquidity on Volatility Shield, Hidden Volatility Revealed

Some in the private credit business are concerned that increasing liquidity could remove the 'volatility shield' and expose misleading accounting practices. Critics argue that this move may disrupt the asset class's foundation and reveal hidden volatility. The term 'volatility shield' is criticized as a euphemism for 'volatility laundering,' seen as an attempt to mask the truth.

Written with ChatGPT (GPT-3).

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luxx_prime🏮@luxx_prime
2 years ago
No way this is real...volatility shield?! https://t.co/wOG9ORIN19
Stefan Schubert@StefanFSchubert
2 years ago
Presumably reduces, e.g. people's willingness to make leveraged investments (which is what we observe, I take it?) https://t.co/GhZApvilJU
Clifford Asness@CliffordAsness
2 years ago
Two thoughts on this article: (https://t.co/GRLfx89a5R) “Volatility shield” is just a pathetic attempt to make the accurate “volatility laundering” into a positive. It’s Orwellian. It should be ridiculed. I’m ridiculing it. In the highlighted part below I think critics get it… https://t.co/R5q4dVtHOo

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Private Credit Industry Debates Impact of Liquidity on Volatility Shield, Hidden Volatility Revealed

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