Global ETF News Older than One Year
DECPG Weekly Economic Brief-
November 21, 2014--China's stock of credit has risen sharply in recent years, mainly reflecting public investment programs to support the economy afterthe global financial crisis.
With growth moderating, as part of policy efforts to rebalance the economy away from investment to consumption and to rein in credit excesses, risks of a disorderly unwinding of debt have emerged. Nevertheless, the likelihood of such risks appears low, not least due to the substantial capacity of the government to intervene in case of an adverse shock.
China's credit-to-GDP ratio reached 251 percent of GDP in mid-2014, up from 156 percent at the end of 2007. The amount of debt (covering government, household and corporate debt) is not unprecedented and mostly comprises domestically held corporate debt.
However, the pace of increase over the 2008-13 period is rivaled only by Ireland in runup to the global financial crisis. In addition, rising debt has been underpinned by credit-led public stimulus programs since 2007, which pushed the rate of investment to an extraordinary 45 percent of GDP in 2013.
Source: World Bank
Santander to launch investment platform
November 21, 2014--Santander UK aims to launch an investment platform next year,
which will include online guidance tools to help investors identify suitable funds without going to an adviser...
Source: FT.com
WEF-New report explores the future of direct investing
November 20, 2014--Report on Direct Investing by Institutional Investors: Implications for Investors and Policy-Makers assesses the trend towards institutional investors investing directly in private equity, infrastructure and real estate
Estimates that $700 billion is invested directly in illiquid assets by asset owners, projected to grow slightly ahead of overall institutional asset growth in the near to medium term.
Focus on motivations for and challenges related to direct investing as well as implications for asset owners, asset manager and policy-makers
The World Economic Forum today launched Direct Investing by Institutional Investors: Implications for Investors and Policy-Makers. In the report, it is estimated that about $700 billion is invested directly in illiquid assets based on estimates of total institutional assets under management and allocations to illiquid assets by sector, and then filtering for size of institutions, governance structures and motivation to invest directly.
Source: WEF (World Economic Forum)
Bitcoin Derivatives: Challenges & Opportunities
November 20, 2014--The bitcoin derivatives market is slowly developing. Lynn Strongin Dodds explores the challenges and opportunities institutional investors may encounter as this space evolves
November 20, 2014--Bitcoin may have generated a great deal of buzz recently but the bubble has been pricked with prices sliding 44% over September and
October to around $300 from last year’s $1,150 high, according to digital wallet provider coinbase.com. Threats of regulation among other reasons are spooking retail investors but ironically a tighter grip may entice the much sought after institutional crowd.
Source: DerivSource
CFTC warns EU rules may force tighter US derivatives regulation
November 20, 2014--The US may be forced into tougher regulation on benchmarks as planned stringent European rules may shut out the region's banks and asset managers from US markets, the head of the US derivatives regulator has warned.
Timothy Massad, chairman of the Commodity Futures Trading Commission, told US policy makers this week that there could be "adverse market consequences" from European Commission plans.
Source: FT.com
London Stock Exchange Derivatives Market to offer stock, depositary receipt and index options to US investors
November 20, 2014--US Securities and Exchange Commission (SEC) class no-action relief allows London Stock Exchange Derivatives Market, and its eligible members, to offer certain US investors a number of option contracts
Complements Group's global derivatives offering
Source: London Stock Exchange Group
Saudi CMA Draft Rules to Open Foreign Investment in Listed Shares
November 20, 2014--The Saudi Capital Market Authority (the CMA) has published for consultation its draft rules for Qualified Foreign Financial Institutions-Investments in Listed Shares (the Draft Rules).
Despite the restrictive eligibility criteria imposed by the Draft Rules, their circulation marks a significant move towards the long-awaited opening up of Saudi Arabia's capital markets to foreign investment.
Source: K&L Gates
Returning to a gold standard-why and how
November 20, 2014--Fraser Murrell delves into the history of the Gold Standard and how a modern day version could be put in place.
In the 1600s, Sir Isaac Newton presided over a (bi-metal) Gold and Silver Standard, with the flaw being the fix of silver to gold.
In the 1900s, John Maynard Keynes "revolutionized" economics, with the result being certain economic collapse.
In both cases there was a logical error in the key definition of "price", which is critical to the stability of the economy. This note examines the problem and then goes on to present a workable Gold Standard, which it is argued, is the most stable frame of reference for our economy.
Source: MineWeb
IMF Working paper-The Transmission of Liquidity Shocks: The Role of Internal Capital Markets and Bank Funding Strategies
November 19, 2014--Summary: We analyze the transmission of bank-specific liquidity shocks triggered by a credit rating downgrade through the lending channel. Using bank-level data for US Bank Holding Companies, we find that a credit rating downgrade is associated with an immediate and persistent decline in access to non-core deposits and wholesale funding, especially during the global financial crisis.
This translates into a reduction in lending to households and non-financial corporates at home and abroad. The effect on domestic lending, however, is mitigated when banks (i) hold a larger buffer of liquid assets, (ii) diversify away from rating-sensitive sources of funding, and (iii) activate internal liquidity support measures. Foreign lending is significantly reduced during a crisis at home only for subsidiaries with weak funding self-sufficiency.
Source: IMF
Nature-Business culture and dishonesty in the banking industry
November 19, 2014--Trust in others' honesty is a key component of the long-term performance of firms, industries, and even whole countries. However, in recent years, numerous scandals involving fraud have undermined confidence in the financial industry. Contemporary commentators have attributed these scandals to the financial sector's business culture, but no scientific evidence supports this claim.
Here we show that employees of a large, international bank behave, on average, honestly in a control condition. However, when their professional identity as bank employees is rendered salient, a significant proportion of them become dishonest.
This effect is specific to bank employees because control experiments with employees from other industries and with students show that they do not become more dishonest when their professional identity or bank-related items are rendered salient.
Surce: Nature
