Global ETF News Older than One Year
IMF-Rise in Emerging Market Corporate Debt Driven by Global Factors
September 29, 2015--Firm borrowing has quadrupled in past decade
Low interest rates, investor search for higher returns play role
Emerging markets must prepare for higher interest rates
Debt levels of firms in emerging market economies have risen, particularly in construction, and oil and gas, due to low interest rates in advanced economies, as well as other global factors, according to new research from the International Monetary Fund.
Low interest rates in advanced economies such as the United States, Europe, and Japan have encouraged this borrowing. The increase in firms' debt-to-asset ratio, commonly known as leverage, has often included a higher share of foreign-currency liabilities.
Incurring leverage can be beneficial, since it can facilitate investment and thereby faster growth-but it also entails risks.
view the CORPORATE LEVERAGE IN EMERGING MARKETS-A CONCERN?"
Source: IMF
IMF Working Paper-The Impact of Global Liquidity on Financial Landscapes and Risks in the ASEAN-5 Countries
September 29, 2015--Summary: This paper analyzes the transmission of global liquidity to the ASEAN-5 countries (ASEAN-5), including the impact on financial landscapes and risks to financial stability.
It finds that global liquidity transmission and changing financial landscapes have contributed to increases in risks to financial stability in ASEAN-5. Therefore, policymakers in ASEAN-5 should prepare for possible liquidity tightening, strengthen regulation of nonbanks, and establish a comprehensive financial stability framework. A number of couontries are well-advanced in this process.
Source: IMF
S&P: Turkey among most susceptible to emerging market risks
September 29, 2015--Turkey has been grouped among the countries most vulnerable to the global economic trends facing developing markets in recent years, the rating agency Standard & Poor's (S&P) noted on Tuesday.
In a recent report titled "Who's At Risk? Emerging Market Sovereigns Are Facing Adverse Global Trends," the agency said emerging economies are encountering the risk of contraction in the global economy as a result of expectations of a rate hike by the US Federal Reserve, a slowdown in Chinese economic growth and shrinkage in the volume of domestic loans.
Source: Today's Zaman
Market Liquidity Not in Decline, but Prone to Evaporate
September 29, 2015--Low interest rates have supported market liquidity
Changes in market structure make liquidity prone to evaporate in case of shocks
Policymakers need to monitor risks, prepare for normalization of monetary policy
The level of liquidity in financial markets-the ability to buy or sell a large quantity of a financial asset at a low cost in a short time-has not shown a marked decline in most asset classes; however, low interest rates may be masking an erosion of its underlying resilience, according to new research from the International Monetary Fund.
view MARKET LIQUIDITY-RESILIENT OR FLEETING?
Source: IMF
IMF Working paper-Getting the Dog to Bark : Disclosing Fiscal Risks from the Financial Sector
September 28, 2015--Summary: Fiscal reporting is intended to warn of fiscal crises while there is still time to prevent them. The recent crisis thus seems to reveal a failure of fiscal reporting: before the crisis, even reports on fiscal risk typically did not mention banks as a possible source of fiscal problems.
One reason for silence was that the risk arose partly from implicit guarantees, and governments may have feared that disclosure would increase moral hazard. The crisis cast doubt, however, on the effectiveness of silence in mitigating risks. This paper discusses how fiscal risks from the financial sector could be discussed in reports on fiscal risk, with a view to encouraging their mitigation.
Source: IMF
Global Financial Centres Index 18
September 28, 2015--London has moved ahead of New York to reclaim the number one position. London climbed 12 points in the ratings to lead New York by eight points. The GFCI is on a scale of 1,000 points and we believe that a lead of fewer than 20 points indicates relative parity.
London and New York are often as much complementary as competitive. It is noticeable that assessments for London have been higher since the general election in May 2015.
London, New York, Hong Kong, and Singapore remain the four leading global financial centres. New York (2nd) is now only 33 points ahead of Hong Kong (3rd). Tokyo (5th), is only 25 points behind the leading four centres.
view The Global Financial Centres Index 18
Source: Z/Yen Group Limited
IMF Survey-Adjusting to Lower Commodity Prices
Commodity Exporters Facing the Difficult Aftermath of the Boom
September 28, 2015--Commodity-exporting economies likely to slow further given weak commodity price outlook
Slowdown reflects in part lower growth in potential output
Structural reforms to boost growth potential, exchange rate flexibility policy priorities
With a weak outlook for commodity prices, particularly for energy and metals, growth in commodity-exporting emerging and developing economies could slow further over the next few years, says a new study.
Source: IMF
IOSCO Research reports on Corporate Bond Markets in Emerging Markets
September 25, 2015--The Research Department of the International Organization of Securities Commissions today published a Staff Working Paper entitled Corporate Bond Markets: An Emerging Market Perspective.
The report is the second in a series on Corporate Bond Markets. It presents findings from an in-depth study on the development and functioning of corporate bond markets in emerging markets specifically.
view the Corporate Bond Markets: An Emerging Markets perspective report
Source: IOSCO
China Europe eyes November launch date
The new market is backed by Deutsche Boerse and two Chinese exchanges
September 21, 2015--The China Europe International Exchange (CEINEX) will launch in November, initially supporting the cash
market, with initial products likely to include exchange-traded-funds and bonds, ahead of futures and derivatives in the second phase.
The exchange is a joint venture between Deutsche Boerse, the Shanghai Stock Exchange (SSE) and the China Financial Futures Exchange, and has the remit of supporting the internationalisation of the Chinese currency.
Source: fow.com
IMF-Monetary Policy and Financial Stability
September 21, 2015--Summary:The issue of using monetary policy for financial stability purposes is hotly contested. The crisis was a reminder that price stability is not sufficient for financial stability, financial crises are costly, and policy should aim to decrease the likelihood of crises, not only rely on dealing with their repercussions once they occur.
It is clear that well-targeted prudential policies (including micro and macroprudential regulation and supervision) should be pursued actively to attenuate the buildup of financial risks.
The question is whether monetary policy should be altered to contain financial stability risks. Should it lend a hand by temporarily raising interest rates more than warranted by price and output stability objectives? Keeping rates persistently higher is also possible, but more costly.
Source: IMF
