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IMF Working Paper-Swing Pricing and Fragility in Open-end Mutual Funds
November 4, 2019--Summary:
How to prevent runs on open-end mutual funds? In recent years, markets have observed an innovation that changed the way open-end funds are priced. Alternative pricing rules (known as swing pricing) adjust funds' net asset values to pass on funds' trading costs to transacting shareholders.
Using unique data on investor transactions in U.K. corporate bond funds, we show that swing pricing eliminates the first-mover advantage arising from the traditional pricing rule and significantly reduces redemptions during stress periods. The positive impact of alternative pricing rules on fund flows reverses in calm periods when costs associated with higher tracking error dominate the pricing effect.
view the IMF Working Paper-Swing Pricing and Fragility in Open-end Mutual Funds
Growth of private capital funds accelerates as ETFs slow
November 3, 2019--Private assets sparkle with prospect of higher returns
Critics say that exchange traded funds are devouring markets.
But in reality, the hottest trend in the global asset management industry is the growth of private capital, which is swelling at nearly twice the rate of ETFs.
IMF Working Paper-Machine Learning and Causality: The Impact of Financial Crises on Growth
November 1, 2019--Summary:
Machine learning tools are well known for their success in prediction. But prediction is not causation, and causal discovery is at the core of most questions concerning economic policy. Recently, however, the literature has focused more on issues of causality.
This paper gently introduces some leading work in this area, using a concrete example-assessing the impact of a hypothetical banking crisis on a country's growth. By enabling consideration of a rich set of potential nonlinearities, and by allowing individually-tailored policy assessments, machine learning can provide an invaluable complement to the skill set of economists within the Fund and beyond.
view the IMF Working Paper-Machine Learning and Causality: The Impact of Financial Crises on Growth
Expanding Offshore Wind to Emerging Markets
October 31, 2019--STORY HIGHLIGHTS
As prices continue to fall, offshore wind power is increasingly gaining traction in emerging markets, beyond its current proliferation in Europe and China.
By some estimates, offshore wind could add anywhere between seven and 11 gigawatts (GW) per year from 2019 to 2024, with substantial potential in developing countries.
This new report estimates that the technical potential for offshore wind in Brazil, India, Morocco, the Philippines, South Africa, Sri Lanka, Turkey and Vietnam at 3.1 terawatts-which is about three times the installed electricity generating capacity of all EU countries. This includes 1,016 GW of fixed and 2,066 GW of floating potential.
view the World Bank report-Going Global: Expanding Offshore Wind To Emerging Markets
Commodity Prices Revised Down as Global Growth Weakens and Supplies Remain Ample
October 29, 2019--Energy and metal prices seen falling in 2019, 2020 on slowing demand
Energy and metal commodity prices are expected to continue to fall in 2020 following sharp declines in 2019 on a weaker outlook for global growth and consequent softer demand, the World Bank said in its October Commodity Markets Outlook.
"Slowing demand for commodities presents a challenge for exporters and an opportunity for importers," said Ceyla Pazarbasioglu, World Bank Group Vice President for Equitable Growth, Finance & Institutions. "As both of them switch from using one commodity to another due to price fluctuation and technological advance, it will be important that these resources be produced and consumed in an environmentally sustainable way."
Crude oil prices are projected to average US$60 per barrel in 2019 and weaken to US$58 per barrel in 2020. These forecasts are US$6 per barrel and US$7 per barrel lower than anticipated in the April Commodity Markets Outlook. P>view more
view the World Bank October 2019 Commodity Markets Outlook
WEF-Global Competitiveness Report 2019: How to end a lost decade of productivity growth
October 25, 2019--Ten years on from the global financial crisis, the world economy remains locked in a cycle of low or flat productivity growth despite the injection of more than $10 trillion by central banks.
The latest Global Competitiveness Report paints a gloomy picture, yet it also shows that those countries with a holistic approach to socio-economic challenges, look set to get ahead in the race to the frontier.
view the World Economic Forum-The Global Competitiveness Report
Governments Worldwide Launched 294 Reforms Over the Past Year to Make Doing Business Easier
October 24, 2019--Governments of 115 economies around the world launched 294 reforms over the past year to make doing business easier for their domestic private sector, paving the way for more jobs, expanded commercial activity, and higher incomes for many, according to the World Bank Group's Doing Business 2020 study.
This latest edition of the study documents reforms implemented in 10 areas of business activity in 190 economies over a 12-month period ending May 1, 2019. Business-friendly environments are associated with lower levels of poverty, and improved regulatory efficiency can stimulate entrepreneurship, startups, innovation, access to credit, and investment. The study is the 17th in an annual series that evaluates regulations enhancing or constraining business activity for small and medium-size enterprises.
view the World Bank Doing Business 2020 : Comparing Business Regulation in 190 Economies
Moving First on AI Has Competitive Advantages and Risks, New Report Helps Navigate
October 23, 2019--Financial institutions that implement AI early have the most to gain from its use, but also face the largest risks. The often-opaque nature of AI decisions and related concerns of algorithmic bias, fiduciary duty, uncertainty, and more have left implementation of the most cutting-edge AI uses at a standstill.
However, a newly released report from the World Economic Forum, Navigating Uncharted Waters, shows how financial services firms and regulators can overcome these risks.
Lower for Longer: Rising Vulnerabilities May Put Growth at Risk
October 16, 2019--The pace of global economic activity remains weak, and financial markets expect rates to stay lower for longer than anticipated in early 2019. Financial conditions have eased even more, helping contain downside risks and support the global economy in the near term. But loose financial conditions come at a cost: they encourage investors to take more chances in a quest for higher returns, so risks to financial stability and growth remain high in the medium term.
The latest edition of our Global Financial Stability Report highlights elevated vulnerabilities in the corporate and non-bank financial sectors in several large economies. These and other weak spots could amplify the impact of a shock, such as an intensification of trade tensions or a no-deal Brexit, posing a threat to economic growth.
view more
view the IMF Global Financial Stability Report: Lower for Longer
Basel Committee reports on Basel III implementation progress
October 16, 2019--The pace of global economic activity remains weak, and financial markets expect rates to stay lower for longer than anticipated in early 2019. Financial conditions have eased even more, helping contain downside risks and support the global economy in the near term.
But loose financial conditions come at a cost: they encourage investors to take more chances in a quest for higher returns, so risks to financial stability and growth remain high in the medium term.
The Basel Committee on Banking Supervision has today issued the Seventeenth progress report on adoption of the Basel regulatory framework. As noted by the Group of Central Bank Governors and Heads of Supervision, the Committee's oversight body, member jurisdictions are expected to ensure a full, timely and consistent implementation of the finalised Basel III reforms.
