3.6.Venter

Exist when a mkt price disruption impact investor behavior in a such way as to cause even further decline in the price of these assets

Insr typically rely on reins as a substitute for holding capital

• Important to include specific stress scenarios, and account for dynamic responses to:
• 1. possiblity and consequence of other mkt participants simultaneously following the same strategies
• 2. possibility of liquid assets becoming illiquid
• 3. possibility that off-balance sheet commitments might be triggered