LONDON, July 3 (Reuters) - The rising influence of "open ended" funds and the impact on developing economies if the investment flows were abruptly reversed, remains a concern for global regulators, Financial Stability Board Chairman Mark Carney said on Monday.
The rapid growth in the world's asset management sector since the financial crisis has been a largely positive development, Carney told reporters.
An issue of concern, however is around "open ended" funds supplying a substantial proportion of cross border flows into developing economies, Carney said.
This comes at a time when liquidity, or the ability to sell at short notice, appears better than it is likely to be under stressed conditions, he said.
"The question is what will the consequences be when inevitably there is a period of sharp adjustment, reduced liquidity," Carney said.
"What could the knock-on effects be, first and foremost for the economies, but also for the system as a whole. The best in the asset management industry absolutely gets it, and they try to manage those risks."
Reporting by Huw Jones