Global ETF News Older than One Year
IMF Working paper-Managing the Tide: How Do Emerging Markets Respond to Capital Flows?
March 27, 2017--This paper examines whether—and how—emerging market economies (EMEs) respond to capital flows to mitigate their untoward consequences.
Based on a sample of about 50 EMEs over 2005Q1-2013Q4, we find that EME policy makers respond proactively to capital inflows by using a combination of policy tools: central banks raise the policy interest rate to address economic overheating concerns; intervene in the foreign exchange market to resist currency appreciation pressures; tighten macroprudential measures to dampen credit growth; and deploy capital inflow controls in the face of competitiveness and financial—stability concerns. Contrary to conventional policy advice to EMEs, we find no evidence of counter—cyclical fiscal policy in the face of capital inflows. Overall, policies are more likely to respond, and used in combination, during inflow surges than in more normal times.
view the IMF Working paper-Managing the Tide: How Do Emerging Markets Respond to Capital Flows?
Source: IMF
Infographic-Here's 48 Hedge Fund Terms Every Investor Should Know
March 27, 2017--For many investors, hedge funds appear to be shrouded in mystery.
There's a practical reason for this. The best hedge funds are extremely careful about protecting their ideas and tactics, because they provide an important competitive advantage for making profits.
An example that illustrates the paranoia around this was described in Flash Boys by Michael Lewis, where he noted that at the ultra-secretive firm Citadel, it took five ID card swipes for an employee to simply start her day.
Source: visualcapitalist.com
Double Down: Faced With Increased Volatility, Institutions Embrace Risk
March 25, 2017--Faced with greater volatility and continued rate pressures, the 500 decision makers included in this, our fifth annual Global Survey of Institutional Investors, appear to be doubling down on their bets by increasing allocations to equities, private equities, and other high-risk assets seeking to generate returns.
Institutional investors will have their hands full balancing three critical objectives:
Managing risk-Navigating higher volatility and low yields is a risk management challenge which is compounded by more stringent solvency requirements.
Generating returns-Institutions are not shying from volatility and will look to active management to help capitalize on opportunity.
Managing the portfolio-Institutional investors see the need for outside help in managing more complex portfolio strategies.
view the Natixis Double Down: Faced With Increased Volatility, Institutions Embrace Risk report
Source: Natixis Global Asset Management
IMF Working paper-Does Prolonged Monetary Policy Easing Increase Financial Vulnerability?
March 24, 2017--Using firm-level data for approximately 1,000 bank and nonbank financial institutions in 22 countries over the past 15 years we study the impact of prolonged monetary policy easing on risk-taking behavior. We find that the leverage ratio, as well as other measures of firm-level vulnerability, increases for banks and nonbanks as domestic monetary policy easing persists.
Cross-border effects are also notable. We find effects of roughly similar magnitude on foreign financial sector firms when the U.S. eases policy. Results appear robust to a variety of specifications, and to be non-linear, with risk-taking behavior rising most quickly at the onset of monetary policy easing.
view the IMF Working paper-Does Prolonged Monetary Policy Easing Increase Financial Vulnerability?
Source: IMF
DECPG Global Weekly-March 24, 2017
March 24, 2017--TAKING STOCK
U.S. durable goods orders rose for the second consecutive month in February; jobless claims rose to their highest level since mid-December.
Euro Area composite PMI hit a 6-year high in March
Japan export growth rebounded strongly in February; manufacturing PMI fell
Brent crude oil fell below $50 for the first time this year
Inflation in Sub-Saharan Africa's three largest economies slowed in February
Source: World Bank
Eventual asset value decline will be catastrophic
March 24, 2017--The mania for average returns has been suppressing short term losses, or corrections.
Source: FT.com
MSCI seeks feedback on potential China stocks inclusion
March 23, 2017--Global index provider MSCI Inc (MSCI.N) is seeking feedback from market participants on whether to add Chinese shares to a widely tracked index, a move which could trigger billions of dollars in capital inflows into mainland stocks and ease pressure on its yuan currency.
Source: Reuters
World Economic Forum-World's Largest Economies Lag Behind in Delivering Secure, Affordable, Sustainable Energy
March 22, 2017--When it comes to achieving affordable, environmentally sustainable and secure energy systems, a group of small economies is quickly accelerating away from the rest of the world.
The top 20 performers in the fifth annual Global Energy Architecture Performance Index Report 2017 have achieved twice the average increase in their score compared to that of all other countries.
The report, developed in collaboration with Accenture Strategy and launched today at the European Commission, ranks 127 countries based on their ability to provide energy across three dimensions of the "energy triangle".
view the Global Energy Architecture Performance Index Report 2017
Source: WEF (World Economic Forum)
IMF Working paper-Private and Public Debt: Are Emerging Markets at Risk?
March 22, 2017--Using a dataset covering a large sample of emerging economies (EMEs), we study the relationship between debt and economic performance in bad times.
While previous research has shown that private debt buildups exacerbate the duration and intensity of recessions in advanced economies (AEs), we document that this effect is very pronounced in EMEs as well. Moreover, although rapid public debt buildups are unlikely to be the primary trigger of financial crises, in EMEs they are associated with deeper and longer recessions than in AEs. Part of this difference is explained by a less supportive fiscal policy in EMEs during crises.
view the IMF Working paper-Private and Public Debt: Are Emerging Markets at Risk?
Source: IMF
Fintech can help fight AML, but might also increase risk of financial contagion, head of MAS says
March 20, 2017--While novel financial technologies could reduce certain risks for financial institutions, they could also imperil them and trigger, among other things, financial contagion, according to Ravi Menon, the managing director of the Monetary Authority of Singapore.
Source: mlexfs-core.com
