Global ETF News Older than One Year
Asset Managers and Climate Change-
How the sector performs on portfolios, engagement and resolutions-November 2019
November 26, 2019--The Task Force on Climate-Related Disclosures (TCFD) process has articulated the view from global financial regulators that climate change does indeed pose a material risk to the financial system. Since the TCFD's initial report was released in June 2017 the phrase "climate risk" as the public narrative has evolved to the "climate crisis" or "emergency" with accompanying physical manifestations and resulting economic/social costs clearly apparent.
The IPCC's Global Warming of 1.5C (2018) provides clear guidance from the world's scientific community on the need for urgent policy action from governments to facilitate a transition from fossil fuel combustion to renewable and zero-emission transport technologies. The lack of meaningful policy progress globally means there is ever-increasing pressure on the financial system to drive more ambition in this energy transition.
The asset management sector plays a pivotal role in the financial system given the vast portfolios the leading players manage, their interactions with companies in the real economy and power in shaping government policy as a key economic sector in its own right. FinanceMap's analysis shows the sector as a whole is not demonstrating the kind of leadership at present, through any of these levers, that the recent escalation in the urgency of climate change would apparently warrant.
Source: InfluenceMap
Bitcoin Drops Below $7,000 as China Euphoria Fades
November 25, 2019--Regulators reaffirm tough stance on companies involved in cryptocurrency trading and fundraising
When Chinese leader Xi Jinping touted blockchain technology in October, the price of bitcoin surged, searches for "blockchain" on one of China's biggest search engines soared and shares of related companies jumped.
A month later, the euphoria is over.
Bitcoin slumped below $7,000 over the weekend, dropping to a six-month low as China reaffirmed...
Source: Wall Street Journal
'Their house is on fire': The pension crisis sweeping the world
November 24, 2019--Jan-Pieter Jansen, a 77-year-old retiree from the Netherlands, had high hopes for a worry-free retirement after having saved diligently into a pension during his working life.
But Jansen, a former manager in the metal industry, has been forced to reappraise his plans after receiving notice from his retirement scheme, one of the Netherlands' biggest industry-sector funds, of plans to cut his pension by up to 10%. Understandably, the news has hit like a sledgehammer.
Source: latimes.com
Economic Outlook: Weak trade and investment threaten long-term growth
November 21, 2019--Trade conflict, weak business investment and persistent political uncertainty are weighing on the world economy and raising the risk of long-term stagnation, according to the OECD's latest Economic Outlook.
World GDP growth is expected to be 2.9% this year-its lowest annual rate since the financial crisis-and remain at 2.9%-3.0% in 2020 and 2021. Global GDP expanded 3.5% in 2018.
Bold action is needed to address both the high levels of uncertainty facing businesses as well as the fundamental changes taking place in the global economy. Policy-making must lead the transition to cleaner energy and to an increasingly digital world. Governments must work together urgently to boost investment and establish fair international rules on taxation and trade.
Source: OECD
World Bank-Emerging and Developing Economies Less Prepared Now for a Deeper Downturn than Prior to 2009 Global Recession: Study
November 20, 2019--Emerging and developing economies are less well positioned today to withstand a deeper global downturn, should it occur, than they were before the 2009 global recession, although they now have more resilient policy frameworks to respond, a new World Bank Group study of the global recession and its aftermath finds.
With multiple risks to global growth clouding the outlook, there is concern whether emerging and developing economies can effectively respond to a deeper economic slowdown as they were able to do during the 2009 global recession. The new study by the World Bank Group, A Decade after the Global Recession, compares emerging market and developing economies' preparedness then and now, and finds reason both for concern and for optimism.
Source: World Bank
The European Investment Bank is going to stop funding fossil fuel projects by the end of 2021
November 18, 2019--The European Investment Bank said on Thursday it would stop funding fossil fuel projects at the end of 2021, a landmark decision that potentially deals a blow to billions of dollars of gas projects in the pipeline.
The bank's new energy lending policy, which it said was approved with "overwhelming" support, will bar most fossil fuel projects, including traditional use of natural gas.
"This is an important first step-this is not the last step." EIB vice president, Andrew McDowell told reporters in a call.
Under the new policy, energy projects applying for EIB funding will need to show they can produce one kilowatt hour of energy while emitting less than 250 grams of carbon dioxide, a move which bans traditional gas-burning power plants.
Source: WEF (World Economic Forum)
How does China fare on the Russian market? Implications for the European Union
November 18, 2019-China's economic ties with Russia are deepening. Meanwhile, Europe remains Russia's largest trading partner, lender and investor. An analysis of China's ties with Russia, indicate that China seems to have become more of a competitor to the European Union on Russia's market.
Competition over investment and lending is more limited, but the situation could change rapidly with China and Russia giving clear signs of a stronger than ever strategic partnership.
The last two decades have seen a very rapid increase in trade and lending between China and Russia. The investment relationship has remained more subdued. China dominates every aspect of the bilateral economic relationship, as a net exporter, net creditor and net investor, despite Russia long being a richer country than China.
Source: bruegel.org
Frontier Market Borrowing Binge
November 18, 2019--Rock bottom global interest rates have been a boon for so-called frontier-market countries, which have been able to borrow cheaply to finance their development needs. But there can be too much of a good thing: countries that don't put the money to good use may have trouble servicing their loans and find themselves at risk of default.
As the Chart of the Week shows, hard-currency bond sales by frontier issuers—countries such as Angola, Belarus, Ecuador, and Pakistan—are poised to rise to $38 billion this year, close to the record set in 2017. Over the five years to mid-2019, the total stock of frontier hard-currency debt tripled to $200 billion.
Source: IMF
IMF Working Paper-Designing Central Bank Digital Currencies
November 18, 2019--We study the optimal design of a central bank digital currency (CBDC) in an environment where agents sort into cash, CBDC and bank deposits according to their preferences over anonymity and security; and where network effects make the convenience of payment instruments dependent on the number of their users.
CBDC can be designed with attributes similar to cash or deposits, and can be interest-bearing: a CBDC that closely competes with deposits depresses bank credit and output, while a cash-like CBDC may lead to the disappearance of cash. Then, the optimal CBDC design trades off bank intermediation against the social value of maintaining diverse payment instruments. When network effects matter, an interest-bearing CBDC alleviates the central bank's tradeoff.
view the IMF Working Paper-Designing Central Bank Digital Currencies
Source: IMF
Bassanese Bites: QE is coming
November 18, 2019--Global Markets
Global markets are currently enjoying a "no news is good news period"-ever hopeful that a US-China trade deal will get done, and no news to the contrary is encouraging as it suggests both parties are still at least talking.
What we don't want is President Trump flying off in a rage again-and jacking up tariffs-due to 11th hour haggling by the Chinese. But as I’ve discussed here previously, Trump seems less likely to do this now given growing signs that an extension of the trade dispute would put the US economy at risk as we head into the 2020 Presidential election year.
Source: BetaShares
