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Global Economic Prospects: Europe and Central Asia
April 4, 2019--Recent Developments
Growth in Europe and Central Asia is estimated to have slowed to 1.6% in 2019, a four-year low, partly reflecting a sharp weakening of activity in Turkey. Trade continues to weaken across the region, as goods trade volumes have slowed in parallel with sluggish activity in the Euro Area, the region's largest export destination.
Monetary policy tightening has paused in the region and fiscal policy has loosened in 2019. Inflation has been trending up in some of the larger economies in the region since the start of the year, notably in Hungary, Poland, and Russia, driven in part by rising oil prices.
IOSCO examines regulatory-driven market fragmentation and considers how to enhance cross-border cooperation
June 4, 2019--The Board of the International Organization of Securities Commissions today published a report that examines instances of regulatory-driven fragmentation in wholesale securities and derivatives markets and considers what actions regulators can take to minimize its adverse effects.
The report, titled Market Fragmentation and Cross-border Regulation, focuses on market fragmentation that arises as an unintended consequence of financial regulation. It provides examples of market fragmentation that IOSCO members consider to be significant and potentially harmful to the oversight and supervision of financial markets.
view the IOSCO Market Fragmentation & Cross-border Regulation report
World's biggest companies face $1 trillion in climate change risks
June 4, 2019--15 biggest global companies report almost US$1 trillion at risk from climate impacts, with many likely to hit within the next 5 years
Companies report potential US$250 billion in losses due to the write-offs of assets
Climate business opportunities calculated at US$2.1 trillion, nearly all of which are highly likely or virtually certain
Potential value of sustainable business opportunities almost 7x the cost of realizing them (US$311bn in costs, US$2.1 trillion in opportunities)
Financial companies forecast US$1.2 trillion in potential revenue from low emissions products & services
Financial services industry represents almost 80% of the total potential financial impacts in the sample set
Fossil fuels companies report more opportunities than risks from the low-carbon transition, raising questions about what they are reporting.
FSB Report on Market Fragmentation
June 4, 2019--This report, which was delivered to G20 Finance Ministers and Central Bank Governors ahead of their meetings in Fukuoka on 8-9 June, sets out the conclusions from the FSB's work on market fragmentation and identifies several areas for further work to address it.
The report looks at some examples of financial activities where supervisory practices and regulatory policies may give rise to market fragmentation.
It discusses potential trade-offs that authorities have considered between the benefits of increased cross-border activity and a need to tailor domestic regulatory frameworks to local conditions and mandates. The areas the report examines are the trading and clearing of over-the-counter (OTC) derivatives across borders; banks' cross-border management of capital and liquidity; and the sharing of data and other information internationally.
view the FSB Report on Market Fragmentation
Regulating the Growth of ESG Investing
A look at the landscape of ESG regulation around the world, across three main areas
June 3, 2019--The growth of environmental, social, and governance investing has been astronomical over the past few years. Our latest report, "The Evolving Approaches to Regulating ESG Investing," shows that investments in European and U.S. ESG-oriented funds increased 44% between the end of 2014 and the end of 2018, reaching a total of EUR 761 billion (further detailed in the Morningstar Sustainability Atlas and U.S. Landscape Report).
This growth naturally leads policymakers to examine a spectrum of ESG regulation and policy interventions to facilitate sustainable investing.
In this report, we explore the scope of these interventions across three broad areas and how regulators' ambitions vary by location.
ESG regulation in investment management and advice
European policymakers have been at the vanguard of this effort with the European Commission's Sustainable Finance Package of Measures, the multiple elements of which continue to move through the legislative process and are expected to be adopted this summer.view more
UBS-Led Group to Launch Blockchain-Based Trade-Settlement Platform
June 3, 2019--Companies have invested $63.2 million in Fnality International
A group of financial firms led by UBS Group AG plans to start using a bitcoin-like token to settle cross-border trades, one of the biggest developments yet in the effort to make use of nascent blockchain technology.
The 14 firms-a group that includes big banks in the U.S., Europe and Japan-have created a new company to control development of the token, called the utility settlement coin, or USC. They have collectively invested £50 million ($63.2 million) in the company, Fnality International.
FSB reports on work underway to address crypto-asset risks
May 31, 2019--The Financial Stability Board (FSB) today published a report on crypto-assets, which considers work underway, regulatory approaches and potential gaps. The report is being delivered to G20 Finance Ministers and Central Bank Governors for their meeting in Fukuoka on 8-9 June.
International organisations1 are working on a number of fronts, directly addressing issues arising from crypto-assets. As described in the report, they are mainly focused on investor protection, market integrity, anti-money laundering, bank exposures and financial stability monitoring. They are monitoring and analysing developments in these markets, setting supervisory expectations for firms and clarifying how international standards apply to crypto-assets.
Rethinking the Bid/Ask Spread for ETF Investors
May 31, 2019--Jason Xavier, head of EMEA ETF Capital Markets at Franklin Templeton, is on a quest to demystify exchange-traded fund (ETF) investing. In this article, he explores why some investors misunderstand the significance of bid/ask spreads in assessing the attractiveness of ETFs.
This post is also available in: Italian German
Over a series of articles, we have been trying to resolve the misconceptions some investors have about ETFs.
Previous articles have looked at the role of trading volume and size and market resilience.
In this article, we're going to look at "bid/ask spreads" and illustrate why some of the most widely used metrics can potentially be misleading.
Global Trade Watch 2018: Trade Amid Tensions
May 29, 2019--Global Trade Watch is an annual publication that tracks emerging trends in global trade. The 2018 edition seeks to answer key questions like:
What are the recent developments in global trade, up to Q1 2019?
What has been the trade impact of the tit for tat tariffs on U.S., China and third countries?
Why certain targeted products show little effects, while others experience large swings?
What happened to export prices in response to tariffs?
What is the long-term effect of the tensions on world poverty and global value chains?
2018 Highlights
Global trade growth showed signs of stabilizing in the first quarter of 2019, after slowing in 2018 amid weakening economic growth in China and the Euro area and rising trade protectionism. However, an escalation in U.S.-China trade tensions might change the outlook.
view the IMF Global Trade Watch 2018: Trade Amid Tensions
Dark pool and OTC crypto trading growing as market begins to resemble traditional asset classes
May 29, 2019--Aite Group report finds OTC market accounted for 60% of all cryptocurrency trades in 2018, expected share to grow to 65% in 2019.
New research has shown a growing percentage of crypto trades being executed via the OTC market and dark pools in a sign of the asset class maturing as it continues to evolve.
The report from Aite Group shows that the OTC market accounted for 60% of all cryptocurrency trades in 2018 and expects the share to grow to 65% in 2019. These numbers show a significant increase from 2016 where OTC activity accounted for 32% of trades.