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Regulation is shrinking capital markets
April 16, 2018--On 7 December last year, agreement was reached on the remaining proposals on bank capital requirements from the Basel Committee, thereby completing the main body of the post-crisis regulatory reforms. While they remain to be implemented, we are now clearly rebalancing away from rule making towards evaluating the effectiveness of the reforms.
It is generally acknowledged that that adoption of the Basel rules has made both banks and the overall financial system more resilient. A new post crisis regulatory framework was needed and has been broadly supported by the industry. However, there is not much empirical research available on the actual costs and benefits of the reforms. Instead, policymakers have been forced to rely on forward-looking studies which provide best guesses of what the impacts were likely to be in the future.
view the Impact of Regulation on Banks' Capital Markets Activities An ex-post assessment
The Eurekahedge Report-April 2018
April 16, 2018--Highlights from this month's report
Hedge funds were down 0.13% as of Q1 2018-their worst quarterly showing since Q1 2016. Assets of the industry expanded by US$31.1 billion over the past three months largely on account of investor subscriptions which stand at US$31.8 billion since the start of 2018.
The US$256.0 billion CTA/managed futures mandated hedge fund industry has seen its asset base contract by US$13.5 billion year-to-date, with managers witnessing the highest performance-based losses of US$12.6 billion among strategic mandates for Q1 2018, while investor redemptions stood at US$0.9 billion over the same period. The Eurekahedge CTA/Managed Futures Hedge Fund Index was down 1.54% year-to-date.
The US$1.65 trillion North American hedge fund industry posted the steepest performance-based losses among regional mandates for Q1 2018, totalling US$1.2 billion while net asset inflows to the region stood at US$20.1 billion-almost 17% lower compared to the net asset inflows recorded in Q1 2017.
Multi-strategy mandated hedge funds saw the highest net outflows among strategic mandates for Q1 2018 following steep redemptions worth of US$15.3 billion in February – the highest monthly redemption on record. The Eurekahedge Multi-Strategy Hedge Fund Index was down 0.71% in March and down 0.08% year-to-date.
ETF Securities Weekly Flows Analysis-Gold inflows strengthen as geopolitical risks take centre
April 16, 2018--Geopolitical risk drives US$33.2mn into long gold ETPs and US$13.6mn into long silver ETPs.
Inflows into copper ETPs rebound with US$29.1mn inflows last week.
US dollar ETP positions widened for the second week in a row to US$10.2mn, as investors positioned against the Euro.
Gold ETPs attracted the largest inflows in 23 weeks as risk aversion took
centre stage amidst military activity in Syria and ongoing trade tensions.
Following days of sabre rattling by Mr Trump, the US, UK and France launched a
missile attack on Friday in an attempt to destroy the Assad regime's chemical weapon
capabilities in Syria. In response, Russian president Vladimir Putin condemned the
attack and warned that such action would inevitably lead to chaos. As the first port of
call in times of political uncertainty, we expect gold to remain in demand for as long as
the conflict between the US and Russia continues on the back of the Syrian crisis. In
fact, for most of this year gold has been sporting its safe-haven hat.
ETFGI reports ETFs and ETPs listed globally gathered net inflows of US$18.99 Bn in March 2018
April 16, 2018--ETFGI, a leading independent research and consultancy firm on trends in the global ETF/ETP ecosystem, reported today that ETFs and ETPs listed globally gathered US$18.99 Bn in net inflows in March 2018. YTD 2018 net inflows are at US$137.12 Bn which is less than the US$197.28 Bn in net inflows at this point last year. (All dollar values in USD unless otherwise noted.)
Highlights
Net new assets gathered by ETFs/ETPs listed globally were $18.99 Bn in March
March 2018 marked the 50th consecutive month of net inflows into ETFs/ETPs listed globally
The majority of these net inflows have gone into lows cost, core and market cap ETFs/ETPs
DECPG Global Weekly
April 13, 2018--Taking Stock
U.S. inflation rose in March; FOMC minutes revealed members' optimism about the U.S. economy. The U.S. producer
price index (PPI) rose 3.0 percent (y/y) in March, above expectations and up from 2.8 percent in February, reflecting an
increase in the cost of services.
The core PPI-which excludes food and energy prices-rose 2.9 percent, up from 2.7 percent in February. The consumer price index (CPI) rose 2.4 percent (y/y), following February's 2.2 percent increase, while the core CPI rose 2.1 percent (y/y), up from 1.8 percent in February (Figure 1). Minutes from the Federal Open Market
Committee (FOMC) March meeting revealed that its members had become more optimistic about the outlook for the
economy, and expected inflation to reach its 2 percent target in the near term.
BlackRock growth dented by market volatility
April 12, 2018--BlackRock suffered a sharp slowdown in inflows in the first quarter of this year after an increase in stock market volatility, but the recent US tax cut and a strong showing by its technology platform buttressed the results of the world,s largest asset manager.
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S&P warns leveraged loan market could 'turn sharply'
April 12, 2018--he current credit cycle is approaching its peak that could "turn sharply," putting lenders and borrowers at risk at a time when the leveraged loan market is increasingly popular with investors, S&P Global Ratings said.
A report by S&P warned that the cycle could "turn sharply, particularly given global trade tensions and rising interest rates. Lenders and borrowers are, thereforem increasingly vulnerable to a dramatic and sustained change in risk appetite and capital flows," the report said.
World Bank-Blockchain & Distributed Ledger Technology (DLT)
April 12, 2018--Blockchain is one type of a distributed ledger. Distributed ledgers use independent computers (referred to as nodes) to record, share and synchronize transactions in their respective electronic ledgers (instead of keeping data centralized as in a traditional ledger). Blockchain organizes data into blocks, which are chained together in an append only mode.
Blockchain/ DLT are the building block of "internet of value," and enable recording of interactions and transfer "value" peer-to-peer, without a need for a centrally coordinating entity. "Value" refers to any record of ownership of asset--for example, money, securities, land titles--and also ownership of specific information like identity, health information and other personal data.
view the World Bank Distributed Ledger Technology (DLT) and blockchain Fin Tech Note| No.1
Patchwork financial regulation is a $780 billion drag on the economy
April 11, 2018-Fragmentation in global financial regulation costs more than
USD $780 billion annually, according to a survey released today by IFAC (International Federation of Accountants) and Business at OECD
(BIAC).
The survey, Regulatory Divergence: Costs,, Risks, Impacts: An International Financial Sector Study, examines the cost of regulatory divergence by taking the pulse of more than 250
regulatory and compliance leaders from major global financial institutions. The results
quantify the massive impact of fragmented regulation: material economic costs, financial
system risk, and barriers to economic growth.
http://biac.org/wp-content/uploads/2018/04/IFAC-OECD_Regulatory-Divergence_V9_singles.pdf" TARGET="_blank">view the Regulatory Divergence: Costs, Risks, Impacts: An International Financial Sector Study,
Harmonisation of critical OTC derivatives data elements (other than UTI and UPI)-technical guidance issued by CPMI-IOSCO
April 9, 2018--A new report provides technical guidance to authorities on harmonised definitions, formats and usage of a set of critical data elements for over-the-counter (OTC) derivative transactions reported to trade repositories, excluding the Unique Transaction Identifier (UTI) and the Unique Product Identifier (UPI).
Entitled Harmonisation of critical OTC derivatives data elements (other than UTI and UPI), the report is published jointly by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO).
view the Harmonisation of critical OTC derivatives data elements (other than UTI and UPI)