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Euro area economic and financial developments by institutional sector: fourth quarter of 2020
April 29, 2021- Euro area net saving decreased to €508 billion in four quarters to fourth quarter of 2020, from €549 billion one quarter earlier
Household debt-to-income ratio increased to 96.3% in fourth quarter of 2020 from 93.8% one year earlier
Non-financial corporations' debt-to-GDP ratio (consolidated measure) at 84.0% in fourth quarter of 2020, up from 76.8% one year earlier
Total euro area economy
Euro area net saving decreased to €508 billion (5.6% of euro area net disposable income) in 2020 compared with €549 billion in the four quarters to the previous quarter. Euro area net non-financial investment decreased to €274 billion (3.0% of net disposable income), due to decreased investment by non-financial corporations, and to a lesser extent households, while net investment by financial corporations and government slightly increased.
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Source: ECB
Monetary developments in the euro area: March 2021
April 29, 2021--Annual growth rate of broad monetary aggregate M3 decreased to 10.1% in March 2021 from 12.2% in February (revised from 12.3%)
Annual growth rate of narrower monetary aggregate M1, comprising currency in circulation and overnight deposits, decreased to 13.6% in March from 16.4% in February
Annual growth rate of adjusted loans to households increased to 3.3% in March from 3.0% in February
Annual growth rate of adjusted loans to non-financial corporations decreased to 5.3% in March from 7.0% in February
Components of the broad monetary aggregate M3
The annual growth rate of the broad monetary aggregate M3 decreased to 10.1% in March 2021 from 12.2% in February, averaging 11.6% in the three months up to March. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate M1, which comprises currency in circulation and overnight deposits, decreased to 13.6% in March from 16.4% in February.
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Source: ECB
Setting Europe's economic recovery in motion: a first look at national plans
April 29, 2021--Plans for spending European Union recovery funds submitted by the four largest EU countries reflect rather different priorities. So far, only Italy is interested in borrowing from the EU.
European Union countries are starting to set out how they plan to spend money from Next Generation EU (NGEU), the EU's landmark instrument for recovery from the coronavirus pandemic.
In late April, countries began submitting their recovery and resilience plans. A first quick analysis shows that the plans of the four largest EU countries, France, Germany, Italy and Spain, reflect rather different priorities, even if all meet the minimum expenditure benchmarks of 37% for climate and 20% for digitalisation.
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Source: bruegel.org
Confronting the risks: corporate debt in the wake of the pandemic
April 28, 2021--As European economies emerge from lockdowns, it is becoming clearer that corporate debt has reached critical levels. A new French scheme, in which the state guarantees portfolios of subordinated debt, shows how financial support could be targeted better.
ublicly guaranteed credit and moratoria have been the main instruments used by governments to support companies during the pandemic. By the end of 2020, €318 billion in loans was subject to moratoria according to the European Banking Authority, with the bulk of suspensions then expiring in the first quarter of this year. There has also been substantial use of public credit guarantees, with Italy and Spain among the most active users of this instrument. Additional credit of 8% and 9% of GDP respectively was created in these two countries by end-2020, in part backed up by the European Investment Bank's €25 billion European Guarantee Fund.
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Source: bruegel.org
Economic Rebound in Turkey this Year Could Be Impacted by Domestic Macroeconomic Volatility and Evolving Global Uncertainties
April 27, 2021--The World Bank issued today its latest edition of the Turkey Economic Monitor (TEM), which takes stock of recent economic developments and provides the World Bank's analysis of economic prospects in Turkey.
Policy responses to the COVID-19 pandemic and its economic impact led to a sharp rebound in economic activity in the second half of 2020.
Taking account of quasi-fiscal measures to support credit, Turkey's stimulus program was larger as a share of GDP (gross domestic product) than the average of G20 emerging market countries.
A stimulus-induced credit boom and relaxation of restrictions on mobility and shop closures in June and July drove a sharp rebound in economic activity, making Turkey one of the few G20 countries with positive growth in 2020. But this growth came with rising inflation, falling international reserves, a weakening of the Lira, a sharply expanded current account deficit and increasing corporate stress.
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Source: World Bank
Top German court tosses objection to EU coronavirus recovery fund
April 21, 2021--The German Constitutional Court's decision paves the way for Berlin to ratify the EU's £s;750 billion recovery fund. Judges said they had not found any indication that the approval was unconstitutional.
Germany's Constitutional Court gave the green light to approve legislation ratifying the European Union's recovery fund on Wednesday, as it dismissed legal challenges against the debt-financed investment plan.
The decision is key to launching the bloc's £s;750 billion ($900 billion) recovery spending to mitigate the consequences of the coronavirus pandemic.
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Source: dw.com
Britcoin' not bitcoin? UK considers new digital currency
April 19, 2021--British finance minister Rishi Sunak told the Bank of England on Monday to look at the case for a new "Britcoin", or central bank-backed digital currency, aimed at tackling some of the challenges posed by cryptocurrencies such as bitcoin.
A BoE-backed digital version of sterling would potentially allow businesses and consumers to hold accounts directly with the bank and to sidestep others when making payments, upending the lenders' role in the financial system.
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Source: reuters.com
IMF-Regional Economic Outlook for Europe
April 15, 2021--With new waves of COVID-19 infections hitting Europe, the recovery remains halting. However, vaccinations are progressing and thus Europe's GDP growth is projected to rebound by 4.5 percent in 2021. The main priority is to quickly ramp up the production and administration of vaccines.
At the same time, policymakers need to continue providing emergency support to households and firms. And they need to prepare measures to stimulate hiring and investment once the pandemic is under control. Such measures will foster a quicker and fuller recovery, by reducing scarring from unemployment, missed education and training, and low investment.
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Source: IMF.org
Widely used UK fund comparison tool adds ETFs for the first time
April 15, 2021--UK investors are expected to be able to compare the performance of index-tracked exchange-traded funds with the performance of actively managed products for the first time increasing the popularity of passive ETFs in the country.
Approximately 530 ETFs from 11 asset managers, including BlackRock, Vanguard, Legal & General Investment Management and Fidelity, will be included in the Investment Association's Fund Sector Comparison Framework from April 19th.
The IA sector provides an important tool for financial advisors and individual investors to make similar comparisons among thousands of funds by dividing them into well-defined groups, each with a clear investment target.
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Source: londonnewstime.com
First WisdomTree Bitcoin ETN tradable on XetraEasy access to the performance of Bitcoin/product with physical collateral/central clearing reduces risks during settlement
April 14, 2021--The first WisdomTree crypto ETN has been tradable via Xetra and Börse Frankfurt since Wednesday.
With the WisdomTree Bitcoin, investors get easy and inexpensive access to the performance of the crypto currency Bitcoin without having to set up crypto wallets.
The exchange traded note is physically secured by Bitcoin. The reference price is the Bitcoin settlement price on the Chicago Mercantile Exchange (CME). Due to the central clearing, investors also benefit from significantly reduced risks in the processing of transactions. The product is only available for institutional investors.
Name: WisdomTree Bitcoin
Asset class: ETN
ISIN: GB00BJYDH287
Ongoing charges: 0.95 per cent
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Source: Deutsche Börse