Global ETF News Older than One Year
Markets swing on trade and monetary policy: BIS Quarterly Review
September 22, 2019--Trade and monetary policy dominated market developments during the last quarter, with the prices of risky assets falling on escalating trade tensions and rebounding on monetary easing.
The prospect of higher trade tariffs reversed the early-year rally in equity and credit markets. Central banks' willingness to loosen monetary policy contributed to a recovery, but this was short-lived as a renewed focus on trade and weakening economic activity kindled risk aversion. Amid this uncertainty, yield curves in major economies inverted in August, which was seen in some quarters as signalling a growing risk of recession. However, other indicators painted a more mixed picture.
Source: BIS
IMF Working Paper-More Gray, More Volatile? Aging and (Optimal) Monetary Policy
September 20, 2019--Summary:
The evidence on the inflation impact of aging is mixed, and there is no evidence regarding the volatility of inflation. Based on advanced economies' data and a DSGE-OLG model, we find that aging leads to downward pressure on inflation and higher inflation volatility.
Our paper is also the first, using this framework, to discuss how aging affects the transmission channels of monetary policy. We are also the first to examine aging and optimal central bank policies. As aging redistributes wealth among generations and the labor force becomes more scarce, our model suggests that aging makes monetary policy less effective and in more gray societies central banks should react more strongly to nominal variables.
view the IMF Working Paper-More Gray, More Volatile? Aging and (Optimal) Monetary Policy
Source: IMF
Taxes on polluting fuels are too low to encourage a shift to low-carbon alternatives
September 20, 2019--Taxing polluting sources of energy is an effective way to curb emissions that harm the planet and human health, and the income generated can be used to ease the low-carbon transition for vulnerable households. Yet 70% of energy-related CO2 emissions from advanced and emerging economies are entirely untaxed, offering little incentive to move to cleaner energy, according to a new OECD report.
As world leaders gather for a UN Summit on climate change amid mounting public pressure for action, a preview of Taxing Energy Use 2019 shows that for 44 countries accounting for over 80% of energy emissions, taxes on polluting sources of energy are not set anywhere near the levels needed to reduce the risks and impacts of climate change and air pollution.
Source: OECD
Digital Currencies: The Rise of Stablecoins
September 19, 2019--A battle is raging for your wallet. New entrants want to occupy the space once used by paper bills or your debit card.
The adoption of new, digital payment methods could bring significant benefits to customers and society: improved efficiency, greater competition, broader financial inclusion, and more innovation. But it could invite risks to financial stability and integrity, monetary policy effectiveness, and competition standards, as outlined in a recent IMF staff paper, the first of a new series of Fintech Notes.
Source: IMF
Long Finance-Global Financial Centres Index 26
September 19, 2019--London hung onto its second place ranking in the Global Financial Centres Index 26, launched today by Z/Yen Group in partnership with the China Development Institute (CDI) in both London and Shenzhen.
New York extended its lead over London to 17 points. Strong performances from other centres, in particular Paris, put London's second place in the index at risk next time.
If London and Paris have similar falls and rises in the ratings for GFCI 27, London would be reduced to a two point lead over Paris and lie behind Shanghai.
The new FinTech index, published for the first time alongside the GFCI, is dominated by Chinese centres taking five of the top seven places in the index, led by Beijing and Shanghai. New York, London, Singapore, San Francisco, and Chicago also feature in the top ten for FinTech.
Source: Long Finance
OECD sees rising trade tensions and policy uncertainty further weakening global growth
September 19, 2019--The global economy has become increasingly fragile and uncertain, with growth slowing and downside risks continuing to mount, according to the OECD's latest Interim Economic Outlook.
Economic prospects are weakening for both advanced and emerging economies, and global growth could get stuck at persistently low levels without firm policy action from governments, according to the Outlook.
Escalating trade conflicts are taking an increasing toll on confidence and investment, adding to policy uncertainty, aggravating risks in financial markets and endangering already weak growth prospects worldwide.
The OECD projects that the global economy will grow by 2.9% in 2019 and 3% in 2020- the weakest annual growth rates since the financial crisis, with downside risks continuing to mount.
Source: OECD
Climate change and artificial intelligence seen as risks to investment asset allocation, finds new report by BNY Mellon Investment Management and CREATE-Research
September 16, 2019--Research outlines impact on asset allocation as a result of these 'supertanker' trends.
Two secular forces or 'supertanker' trends, climate change and artificial intelligence (AI), are reshaping the future of investing, finds a new research study launched today by BNY Mellon Investment Management and CREATE-Research.
89% of the institutional investors ("investors" or "respondents"), with combined assets under management of approximately $12.75 trillion, that took part in extensive and structured interviews as part of the study regard the two supertanker trends as investment risks.
view the Future 2024: Future proofing your asset allocation in the age of mega trends
Source: BNY Mellon
IMF Working Paper-A Guide to Sovereign Debt Data
September 13, 2019--Summary:
The last decade or so has seen a mushrooming of new sovereign debt databases covering long time spans for several countries. This represents an important breakthrough for economists who have long sought to, but been unable to tackle, first-order questions such as why countries have differential debt tolerance, and how debt levels affect the scope for countercyclical policy in recessions and financial crises.
This paper backdrops these recent data efforts, identifying both the key innovations, as well as caveats that users should be aware of. A Directory of existing publicly-available sovereign debt databases, featuring compilations by institutions and individual researchers, is also included.
view the IMF Working Paper-A Guide to Sovereign Debt Data
Source: IMF
Global disinvestment from fossil fuels tops $11trn
September 11, 2019--Global disinvestment from fossil fuels has crossed the $11trn mark-a massive leap from committed disinvestment of just $52m in 2014.
This represents around 16% of global investment in fossil fuels.
The disinvestment figure was announced at briefing in Cape Town on Monday before the start of an international summit, 'Financing the Future', organised by the global fossil free movement, a collaboration of non-government organisations campaigning for banks, pension funds, insurers and other large institutions to disinvest from fossil fuels.
Source: FIN24
IMF-Staff Discussion Note-A Capital Market Union For Europe
September 10, 2019--Summary:
This note weighs the merits of a capital market union (CMU) for Europe, identifies major obstacles in its path, and recommends a set of carefully targeted policy actions. European capital markets are relatively small, resulting in strong bank-dependence, and are split sharply along national lines. Results include an uneven playing field in terms of corporate funding costs, the rationing out of collateral-constrained firms, and limited shock absorption.
The benefits of integration center on expanding financial choice, ultimately to support capital formation and resilience. Capital market development and integration would support a healthy diversity in European finance. Proceeding methodically, the note identifies three key barriers to greater capital market integration in Europe: transparency, regulatory quality, and insolvency practices. Based on these findings, the note urges three policy priorities, focused on the three barriers. There is no roadblock-such steps should prove feasible without a new grand bargain.
view the IMF-Staff Discussion Note-A Capital Market Union For Europe
Source: IMF
