MacroBusiness Access Subscriber Only Content at 1:00 pm on February 16, 2021 | 16 comments Back in 2016, David Murray – the chairman of the Financial System Inquiry (FSI) – recommended self-managed superannuation funds (SMSFs) be banned from borrowing to invest because of risks to the financial system: “Superannuation funds should not be leveraged, including SMSFs, because leverage magnifies risk. If the system is unleveraged, then if asset prices rise, bubble and fall then all the loss is contained within the superannuation funds and does not have another contagion effect because there are no forced sellers of other assets”. In 2019, the Council of Financial Regulators (CoFR) backed David Murray’s call, recommending the federal government ban property investment via SMSFs after 18,000 of these Funds were found to have more than 90% of their savings in a single asset class, specifically investment properties. However, its recommendation was snubbed by Treasurer Josh Frydenberg.