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IMF Working paper-Bank credit, asset prices and financial stability: Evidence from French banks
April 23, 2012--Summary: This paper analyses the effect of asset prices on credit growth in France and tries to disentangle credit demand and supply factors, both for the whole 1993-2010 period and during periods of financial instability.
Using bank-level panel data at a quarterly frequency, stock price growth is shown to have a significant effect on lending growth over the whole period, but without credit supply factors being singled out. By contrast, housing price growth has a significant effect during periods of financial instability only, even after controlling for credit demand effects. These results show that credit demand factors do play a large role but also provide evidence of tighter credit constraints on households in financial instability periods.
Government is on track to cut cost of delivering infrastructure
April 23, 2012--The Government has today published the first annual report of the three year Infrastructure Cost Review programme launched in March 2011 and led by Infrastructure UK.
The Cost Review set out plans to reduce the cost of delivering infrastructure in the UK by £2 to £3 billion a year by 2015. Today’s report confirms that the programme is on track to deliver these savings, with the first annual report having already identified projected savings of up to £1.5 billion through changed behaviours and practice, consistent with the Cost Review principles.
view the Infrastructure Cost Review: Main Report
Spanish economy 'back in recession'
April 23, 2012--Spain's economy has contracted 0.4% in the first quarter of the year and the country is now in a technical recession, latest figures show.
The drop, published in a Bank of Spain report, follows a 0.3% quarterly decline in the fourth quarter.
A technical recession is commonly defined as two consecutive quarters of economic contraction.
Eurozone economic activity contracts
April 23, 2012--Eurozone economic activity has contracted unexpectedly sharply this month, pushing the region deeper into recession and dashing hopes that action to combat its debt crisis would soon pave the way for a gradual recovery.
Purchasing managers' indices for the 17-country bloc fell for a third consecutive month to the lowest level for five months, pointing to an intensification of the economic contraction which started in the final three months of last year, when the eurozone debt crisis was at its most intense. Economists had expected a modest improvement.
Behind the exchange-traded label
April 22, 2012--Investors in products bearing the exchange-traded label almost invariably assume they have invested in funds regulated under European Ucits rules.
In fact, the position is far from clear-cut. Whereas exchange-traded funds are listed funds with regulated exposures, exchange-traded notes and exchange-traded commodities lack either of these characteristics.
The most common ETN and ETC exposures are wrapped into a debt security, whose value is linked to the performance of designated investments
MiFID threatens liquidity -and traders
April 20, 2012--As the sweeping reforms contained in the so-called MiFID II proposals creep closer to being incorporated into European regulations, bond specialists are preparing for a fundamental shift in fixed-income markets.
The reforms, which are designed to make European bonds trade more like equities, might batter liquidity levels - and slash the number of bond traders employed by banks - but could create new opportunities for exchanges and agency brokers.
Research says lack of data consolidation is pushing buy side flow into dark pools
April 20, 2012--New research from TradeTech Pulse suggests that the lack of data consolidation and established data standards across Europe is increasingly pushing asset managers to direct flow into dark pools, as they are finding it so hard to navigate across the fragmented nature of the markets in Europe.
The research also reveals that between 30%-40% of asset managers’ trading flow is now being executed in an OTC environment, however not all asset managers trade in dark pools. And contrary to the popular assumption, avoiding high frequency traders is not the major reason that an asset manager will direct flow into a dark pool. The majority of the respondents believe they will be trading high volumes in a greater variety of dark pools in a few years’ time.
ESMA advises Commission on short-selling regulation
April 20, 2012--ESMA has published today its final advice on possible delegated acts concerning the Short-Selling Regulation.
ESMA's advice specifies the definition of when a natural or legal person is considered to own a financial instrument for the purposes of the definition of short sale (Article 2(2) of theRegulation).
Section II of the advice relates to the net position in shares or sovereign debt covering the concept of holding a position, the case when a person has a net short position and the method of calculation of such a position including when different entities in a group have long or short positions or for fund management activities related to separate funds (Article 3(7)).
Section III sets out the advice on the cases in which a credit default swap (CDS) transaction is considered to be hedging against a default risk or the risk of a decline of the value of the sovereign debt and the method of calculation of an uncovered position in a CDS (Article 4(2)).
Turkey-Sustained and Equitable Growth for Continued Economic Success
April 20, 2012--Synopsis
Turkey is one of the greatest success stories of the global economy based on its rapid economic growth and development over the last decade. Extreme poverty has been eliminated; the Millennium Development Goals for maternal mortality and universal primary education have been achieved; and Turkey is working towards reaching the remaining goals by 2015.
Turkey's partnership with the International Bank for Reconstruction and Development (IBRD) is focused on sustained and equitable growth and has delivered results on macroeconomic stabilization, the development of a clean, sustainable, and reliable energy sector, and improved health outcomes.
Challenge
Turkey is an upper middle-income country, and with a GDP of US$ 875 billion, it is the world's sixteenth-largest economy. Total population is 75 million and per capita annual income is just above US$ 10,000. Since 2001, Turkey has stabilized its economy and other countries—most notably those in the Middle East and North Africa—look to Turkey's political and economic system as a potential model to emulate. Accession to the European Union (EU), initiated in 2005, remains a firm long-term aim.
DTCC, EFETnet Launch Global Trade Repository For Commodities Derivatives
April 19, 2012--EFETnet B.V. and The Depository Trust & Clearing Corporation (DTCC) announced today that, following their successful pilot program launched in January as the first global repository for OTC commodity swaps, they have begun accepting trade submissions from commodity market participants into the new Global Trade Repository for Commodities (GTRfC).
DTCC and EFETnet's industry governed low-cost model provides users the ability to submit trades to a single repository in order to fulfill reporting obligations to regulators globally.
