Global ETF News Older than One Year
IMF Working Paper-Taming Financial Development to Reduce Crises
May 8, 2019--Summary:
This paper assesses whether and how financial development triggers the occurrence of banking crises. It builds on a database that includes financial development as well as financial access, depth and efficiency for almost 100 countries.
Through estimation of a dynamic logit panel model, it appears that financial development, from an institutional dimension and to a lesser extent from a market dimension, triggers financial instability within a one- to two-year horizon. Additionally, whereas financial access is destabilizing for advanced countries, it is stabilizing for emerging and low income ones. Both results have important implications for macroprudential policies and financial regulations.
view the IMF Working Paper-Taming Financial Development to Reduce Crises
Source: IMF
Basel Committee reports on Basel III implementation progress
May 7, 2019--The Basel Committee on Banking Supervision today issued the Sixteenth progress report on adoption of the Basel regulatory framework. As noted by the Group of Central Bank Governors and Heads of Supervision (GHOS), the Committee's oversight body, its members expect full, timely and consistent implementation of the finalised Basel III reforms by member jurisdictions.
The progess report sets out the adoption status of Basel III standards for each Committee member jurisdiction as of end-March 2019. It includes the Basel III post-crisis reforms published by the Committee in December 2017 and the finalised market risk framework published in January 2019. These reforms will take effect from 1 January 2022.
view the BIS Sixteenth progress report on adoption of the Basel regulatory framework report
Source: BIS
IMF Working Paper-Discriminatory Pricing of Over-the-Counter Derivatives
May 7, 2019--Summary:
New regulatory data reveal extensive price discrimination against non-financial clients in the FX derivatives market. The client at the 90th percentile pays an effective spread of 0.5%, while the bottom quarter incur transaction costs of less than 0.02%.
Consistent with models of search frictions in over-the-counter markets, dealers charge higher spreads to less sophisticated clients. However, price discrimination is eliminated when clients trade through multi-dealer request-for-quote platforms. We also document that dealers extract rents from captive clients and market opacity, but only for contracts negotiated bilaterally with unsophisticated clients.
view IMF Working Paper-Discriminatory Pricing of Over-the-Counter Derivatives
Source: IMF
Growth and economic well-being: fourth quarter 2018, OECD
May 7, 2019--OECD household income growth picks up in the fourth quarter of 2018, outpacing GDP growth
Growth in real household income per capita, which provides a better picture of changes in households' economic well-being than real GDP growth per capita, picked up to 0.5% in the OECD area in the fourth quarter of 2018, compared with 0.1% in the third quarter of 2018, outpacing real GDP growth per capita, which stood at 0.2% in the fourth quarter.
Source: OECD
World Gold Council-Global gold-backed ETF holdings fell 2% in April, resulting in net 2019 outflows to date
May 7, 2019--In April, holdings in global gold-backed ETFs and similar products fell across all regions by 57 tonnes(t) to 2,424t, equivalent to US$2.2bn in outflows. Global assets under management (AUM) in US dollars fell by 3% to US$100bn, as the price of gold of gold fell 1% during the month. Global gold-backed ETFs have now lost assets of US$377mn, 0.4% AUM on the year, reversing January's strong start.
Regional fund flows
North American funds saw outflows of 46t (US$1.9bn, 3.7% AUM)**
Holdings in European funds fell by 8t (US$257mn, 0.6%)
Funds listed in Asia decreased by 2.5t (US$114mn, 4%)
Other regions saw outflows of 0.4t (US$16mn, 1.3%).
Individual fund flows
In North America, SPDR(R) Gold Shares lost 38t (US$1.6bn, 5%) and iShares Gold Trust lost 6t (US$252mn, 2%), the lion's share of the region's outflows
iShares Physical Gold and ETFS Physical Gold in the UK each lost ˜6t, collectively losing around US$500mn
Source: World Gold Council
Wahed Becomes the First Globally-Accessible Halal Robo-Advisor
May 7, 2019--Wahed Inc. ("Wahed"), the parent company of Wahed Invest LLC, the first halal robo advisor in the United States, today announces it is expanding its operations globally.
The platform, which was previously available only to US and UK communities, now provides access to Islamic value-based investing to residents of over 130 countries including key markets across Nigeria, India, Pakistan and the MENA region.
Wahed looks to change how the Muslim community participates in global financial markets by making investing accessible and ethically compliant for the 1.8 billion Muslims globally.
Source: Wahed Inc.
IMF Working Paper-Inefficient Fire-Sales in Decentralized Asset Markets
May 6, 2019--Summary:
Classic models of fire-sales that emphasize liquidity-constrained natural buyers can-not fully account for the asset fire-sales during the Financial Crisis of 2008. I present a model to demonstrate that fire-sales may happen even when there is a sizable pool of natural buyers and in the absence of asymmetric information, due to a coordination failure among buyers.
In particular, I show that when trade is decentralized and participation is endogenous, constrained asset demand and liquidity needs that are ex-pected to increase over time create complementarity among buyers' decisions to wait. This complementarity makes competitive markets prone to coordination failures and fire-sales which may be inefficient. I also discuss various policy options to eliminate the risk of fire-sales in such a setup.
Source: FTSE Russell
Who to Sue When a Robot Loses Your Fortune
May 5, 2019--The first known case of humans going to court over investment losses triggered by autonomous machines will test the limits of liability.
Robots are getting more humanoid every day, but they still can't be sued.
So a Hong Kong tycoon is doing the next best thing. He's going after the salesman who persuaded him to entrust a chunk of his fortune to the supercomputer whose trades cost him more than $20 million.
The case pits Samathur Li Kin-kan, whose father is a major investor in Shaftesbury Plc, which owns much of London's Chinatown, Covent Garden and Carnaby Street, against Raffaele Costa, who has spent much of his career selling investment funds for the likes of Man Group Plc and GLG Partners Inc. It's the first-known instance of humans going to court over investment losses triggered by autonomous machines and throws the spotlight on the "black box" problem: If people don't know how the computer is making decisions, who's responsible when things go wrong?
Source: Bloomberg
