G7 says Facebook's Libra poses 'serious risks'
July 18, 2019--G7 ministers listed on Thursday (18 July) the requirements Facebook's new 'coin' Libra should meet, as regulators are increasingly wary of the "serious risks" posed by the new digital currency.
The outstanding work needed for Facebook to meet the regulators' demands suggests that Libra, unveiled in June, would not start functioning anytime soon.
Libra was part of the discussions held by the finance ministers of the Group of 7 (G7) on Wednesday and Thursday near Paris. view more
Source: euractiv.com
Rebalancing the Global Economy: Some Progress but Challenges Ahead
July 17, 2019--Following the global financial crisis, overall current account surpluses and deficits fell sharply from about 6 percent of global GDP in 2007 to about 3.5 percent in 2013. Since then, as shown in our new External Sector Report, global current account imbalances have declined only slightly to 3 percent of world GDP in 2018, while rotating toward advanced economies and away from emerging economies, including China whose current account is now broadly in line with fundamentals.
Trade actions and tensions have so far not significantly affected global current account imbalances, as trade has been diverted to other countries with lower or no tariffs. Instead, as highlighted in an earlier blog, these trade tensions and related uncertainties are weighing on global investment and growth, especially in sectors most integrated into global supply chains (where production is carried out across multiple countries).
view the IMF 2019 External Sector Report: The Dynamics of External Adjustment July 2019
Source: IMF
IMF Working paper-The Rise of Digital Money
July 15, 2019--Summary:
This paper marks the launch of a new IMF series, Fintech Notes. Building on years of IMF staff work, it will explore pressing topics in the digital economy and be issued periodically. The series will carry work by IMF staff and will seek to provide insight into the intersection of technology and the global economy.
The Rise of Digital Money analyses how technology companies are stepping up competition to large banks and credit card companies. Digital forms of money are increasingly in the wallets of consumers as well as in the minds of policymakers. Cash and bank deposits are battling with so-called e-money, electronically stored monetary value denominated in, and pegged to, a currency like the euro or the dollar. This paper identifies the benefits and risks and highlights regulatory issues that are likely to emerge with a broader adoption of stablecoins. The paper also highlights the risks associated with e-money: potential creation of new monopolies; threats to weaker currencies; concerns about consumer protection and financial stability; and the risk of fostering illegal activities, among others.
view the IMF Working paper-The Rise of Digital Money
Source: IMF
ESG money market funds grow 15% in first half of 2019
July 14, 2019--Big asset managers are launching more socially responsible options to meet investor demand
Money market funds that incorporate environmental, social and governance metrics are growing rapidly, with a spurt of activity by big asset managers such as State Street Global Advisors, BlackRock and DWS.
Assets in the sector rose 15 per cent to $52bn during the first half of 2019, after growing 1 per cent through all of 2018, according to research from Fitch Ratings. view more
Source: FT.com
Investors flee active funds at highest rate in 3 years
July 7, 2019--Investors in the US and Europe have fled active mutual funds at the highest rate in at least three years, pulling more than $30bn so far in 2019 as stockpicking comes under intense scrutiny.
Source: FT.com
Deutsche Bank to Exit Global Equities, Trading Business
July 7, 2019--German bank will cut 18,000 jobs by 2022 and will focus on serving European companies and retail-banking customers, including wealthy clients
Deutsche Bank AG moved Sunday to gut its global ambitions as a trading powerhouse, cutting 18,000 jobs and retreating to its German banking roots in a radical overhaul to try to save itself after years of decline.
Deutsche Bank's restructuring plan reorders the bank's executive ranks under Chief Executive Christian Sewing, with several senior officials leaving and business lines redrawn for the third time in four years.
Source: Wall Street Journal
The Biggest Cybersecurity Crises of 2019
July 5, 2019--Six months of 2019 are on the books already, and certainly there have been six months' worth of data breaches, supply chain manipulations, state-backed hacking campaigns, and harbingers of cyberwar to show for it. But the hallmark of 2019, perhaps, is feeling like the worst is yet to come.
Ransomware is an ever-growing threat, corporate and US government security is still a mess, and geopolitical tensions are rising worldwide.
Source: wired.com
'Oil' and 'gas' become dirty words in FTSE rebranding
July 2, 2019--Oil has long been known as a dirty fuel. For investors, it is now a dirty word.
The London Stock Exchange caught many by surprise this week when a little-known rule tweak relabelled a group of oil and gas producers as "non-renewable energy".
Source: FT.com
IMF Working Paper-Long-Term Returns in Distressed Sovereign Bond Markets: How Did Investors Fare?
July 1, 2019--Summary:
Sovereign debt restructurings are perceived as inflicting large losses to bondholders. However, many bonds feature high coupons and often exhibit strong post-crisis recoveries.
To account for these aspects, we analyze the long-term returns of sovereign bonds during 32 crises since 1998, taking into account losses from bond exchanges as well as profits before and after such events. We show that the average excess return over risk-free rates in crises with debt restructuring is not significantly lower than the return on bonds in crises without restructuring. Returns differ considerably depending on the investment strategy: Investors who sell during crises fare much worse than buy-and-hold investors or investors entering the market upon signs of distress.
Source: IMF
Alternative assets under administration jump 18.8% in 2018-eVestment
July 1, 2019--Alternative assets under administration as of Dec. 31 totaled $10 trillion, up 18.8% from the prior year, according to a new survey from eVestment.
SS&C Technologies ranked first among firms with total alternative assets under administration of $1.69 trillion as of Dec. 31.
State Street Alternative Investment Solutions was second with $1.202 trillion, followed by Citco Fund Services at $1.2 trillion, and Bank of New York Mellon's alternative investment services business at $963.2 billion.
Source: pionline.com