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ECB moves to restore confidence in securitisation
April 23, 2010--Managers of asset-backed securities held by the European Central Bank will have to provide far more data on the loans backing the bonds under a new system designed to restore confidence in the market.
Investor appetite for ABS withered during the financial crisis when fears that all mortgage-backed bonds might be infected by poor-performing US subprime loans paralysed the market, sending prices plunging. As a result of its collateral-backed loans to banks during the crisis, the ECB is now by far the single biggest holder of European ABS.
Securitisation, which essentially frees up lenders’ balance sheets for new loans by repackaging existing consumer loans from mortgages to credit card debt into new bonds, is considered crucial to economic recovery by boosting the supply of credit to the real economy.
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Source: FT.com
IMF aid for Greece a eurozone first
April 23, 2010--The International Monetary Fund prepared Friday to aid a eurozone member for the first time since the 16-nation bloc was formed more than a decade ago, after Greece formally asked for an IMF loan.
The Fund began its preparations several months ago as officials in Athens found themselves mired deeper in a budget crisis that has threatened to spread to other eurozone members.
IMF head Dominique Strauss-Kahn said in a statement that the Fund would "move expeditiously" in response to the Greek request.
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Source: EUbusiness
Report on the lessons learned from the financial crisis with regard to the functioning of European financial market infrastructures
April 23, 2010--On April 19, 2010 the ECB released the Report on the lessons learned from the financial crisis with regard to the functioning of European financial market infrastructures
EXECUTIVE SUMMARY
This report considers issues relating to the impact of the financial crisis on the functioning of European fi nancial market infrastructures (FMIs), including systemically important
payment systems, central counterparties, and
securities settlement systems. It reflects the outcome of bilateral interviews conducted by the Eurosystem 1 central banks, the Bank of England
and Sveriges Riksbank with a representative
sample of FMIs and financial institutions
participating in these FMIs.
view report
Source: ECB
Eurosystem launches preparatory work on the establishment of loan-level information requirements for ABSs in its collateral framework
April 23, 2010--The Governing Council of the European Central Bank (ECB) has decided that work should begin on the establishment of loan-by-loan information requirements for asset-backed securities (ABSs) in the Eurosystem collateral framework. Having analysed the positive feedback received in the public consultation on the matter, the Governing Council decided that the ECB and the 16 national central banks of the euro area would proceed with the preparatory work for the establishment of loan-level information requirements.
On 23 December 2009 the ECB launched a public consultation on the establishment of loan-by-loan information requirements for ABSs. The consultation ended on 26 February 2010 and over 50 responses were received from a broad range of market participants. The vast majority of respondents support the initiative, as it would increase transparency, contribute to more informed risk assessments and help to restore confidence in ABS markets.
The preparatory work will begin immediately and should be completed by September 2010. It will address further the loan-level information requirements, as well as the technical implementation aspects covered by the public consultation. Subject to the approval of the Governing Council, market participants would have 12 months before the obligation to submit loan-level ABS information comes into force.
State Street to provide investment services for Marshall Wace ETF
April 23, 2010--State Street Corporation (NYSE: STT), one of the world’s leading providers of financial services to institutional investors, announced today that it has been appointed to provide investment services to hedge fund group Marshall Wace for its new equity-neutral exchange traded fund (ETF)– MW TOPS Global Alpha. According to Marshall Wace, it is the first ETF targeting an absolute return from a single investment strategy and the first ETF in Europe to be run by a dedicated alternative asset manager.
The innovative fund, listed on the London and Frankfurt stock exchanges, provides exposure to a range of investment strategies, comprising mainly large-cap equities and equity-related securities. State Street’s operations in Ireland will provide a comprehensive range of custody and fund administration services to the new fund.
Marshall Wace’s decision was guided by State Street’s experience in the ETF servicing marketplace, its global presence and local leadership in investment servicing, and its demonstrable expertise in supporting a complex, high volume, UCITS compliant, daily valuing fund.
“We are delighted to have been selected by Marshall Wace to provide investment services for this innovative new product,” said Gavin Nangle, vice president and Head of Business Development for State Street in Ireland. “Marshall Wace is one of the leading forces in the alternatives segment of the market and we look forward to building a meaningful and long-term partnership with them.”
Since its entry into the Irish market in 1996, State Street has grown to be one of the country’s largest fund administrators and custodians.
State Street has approximately 2,000 employees in Ireland and has offices in Dublin, Drogheda, Kilkenny and Naas.
Source: State Street
ETF Landscape: European STOXX 600 Sector ETF Net Flows, week ending 16-Apr-10
April 21, 2010--Highlights
Last week saw US$35.1 Mn net inflows to STOXX 600 sector ETFs. The largest sector ETF inflows last week were in Industrial Goods & Services with US$26.6 Mn and Retail with US$20.0 Mn while Basic Resources experienced net outflows of US$41.2 Mn.
Year-to-date, Media has had the largest net inflows with US$339.9 Mn net new assets, followed by Utilities with US$76.6 Mn YTD.
Telecommunications sector ETFs have had the largest net outflows with US$256.5 Mn YTD. In total, STOXX 600 sector ETFs have seen US$39.1 Mn net inflows YTD.
The assets invested in the ETFs are greater than the open interest in the corresponding futures contract in 18 out of 19 sectors. The data required to produce the flow analysis is available by Tuesday evening which means the earliest this publication can be distributed is on Wednesdays.
to request report
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Turkey to lead global recovery as it regains confidence
April 22, 2010--Turkey will be one of the countries to lead a “faster-than-anticipated” recuperation in global markets thanks to its growing domestic confidence amid efforts to rebound from the 2009 global credit crunch, the International Monetary Fund (IMF) has said.
Having raised its growth forecast for Turkey in a "World Economic Outlook" report released on Wednesday, the IMF has predicted that the Turkish economy will grow by 5.2 percent in 2010, higher than the 3.7 percent forecast in its October report.
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Source: Todays Zaman
Minister: Constitutional reform will attract investors
April 22, 2010--Industry and Trade Minister Nihat Ergün has said passage of a constitutional reform package currently being debated in Parliament would be conducive to an atmosphere attractive to domestic and global investors, stressing the close relationship between political stability and the economy.
“From consumers to global investors, all actors in the economy are following these developments closely, for they care about long-lasting stability. Since the implementation of constitutional change will also bring permanence to stability, obstacles in front of economic activities will be removed,” he told Today’s Zaman.
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Source: Todays Zaman
Provision of deficit and debt data for 2009 - first notification Euro area and EU27 government deficit at 6.3% and 6.8% of GDP respectively Government debt at 78.7% and 73.6%
April 22, 2010--In 2009, the government deficit1 and government debt1 of both the euro area2 (EA16) and the EU27 increased compared with 2008, while GDP fell.
In the euro area the government deficit to GDP ratio increased from 2.0% in 20083 to 6.3% in 2009, and in the EU27 from 2.3% to 6.8%. In the euro area the government debt to GDP ratio increased from 69.4% at the end of 2008 to 78.7% at the end of 2009, and in the EU27 from 61.6% to 73.6%.
View tables on actual and potential impact on government deficit and debt, by Member State
Source: Eurostat
db x-trackers launches seven daily leveraged ETFs
April 22, 2010--db x-trackers, Deutsche Bank's exchange-traded fund platform, is launching seven daily two times leveraged ETFs across Europe.
Three of the ETFs track daily leveraged short indices and four track daily leveraged long indices from recognised index providers.
The three daily leveraged short ETFs track indices that provide two times daily inverse exposure to the Dax, Euro Stoxx 50 and S&P 500.
The four daily leveraged long ETFs track indices that provide two times daily long exposure to the Dax, Euro Stoxx 50, FTSE 100 and S&P 500.
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Source: ETF Express
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