Global ETF News Older than One Year
IMF Working paper-Liquidity Trap and Excessive Leverage
July 21, 2014--Summary: We investigate the role of macroprudential policies in mitigating liquidity traps driven by deleveraging, using a simple Keynesian model. When constrained agents engage in deleveraging, the interest rate needs to fall to induce unconstrained agents to pick up the decline in aggregate demand. However, if the fall in the interest rate is limited by the zero lower bound, aggregate demand is insufficient and the economy enters a liquidity trap.
In such an environment, agents' exante leverage and insurance decisions are associated with aggregate demand externalities. The competitive equilibrium allocation is constrained inefficient. Welfare can be improved by ex-ante macroprudential policies such as debt limits and mandatory insurance requirements. The size of the required intervention depends on the differences in marginal propensity to consume between borrowers and lenders during the deleveraging episode. In our model, contractionary monetary policy is inferior to macroprudential policy in addressing excessive leverage, and it can even have the unintended consequence of increasing leverage.
view the IMF Working paper-Liquidity Trap and Excessive Leverage
Source: IMF
ETF Securities-Precious Metals Weekly-Rising Geopolitical and Market Risk Favours the Precious Metals
July 21, 2014--Global events and equity valuations point to further gold gains. Gold and silver prices
declined 2.1% and 2.2% respectively last week on futures led profit taking. The gold price recovered from a dip below US $1,300/oz. as geopolitical risk buffeted investor confidence.
Contrary to the consensus view at the onset of 2014, gold ended the week still up about $100 on the year.
A key shift has been the widely unexpected decline in real interest rates. Last week, German Bund yields dipped to new historic lows and US 10yr bond yields have also dropped sharply. In addition, recent flows into gold ETF's have been positive. Some equity money has been moving back into gold and the precious metals for diversification purposes as the equity rally becomes increasingly extended. At a time of escalating geopolitical risk in the Ukraine, Russia, and the Middle East, with increasing volatility in equity markets and declining real yields investors are again looking to gold’s defensive properties to offset potential declines in more cyclical assets.
Source: ETF Securities
IMF Working paper-First-Time International Bond Issuance-New Opportunities and Emerging Risks
July 18, 2014-- Summary: International bond issuance by debut issuers has risen in recent years. The uptick was a result of both demand and supply factors. The search for yield and demand for portfolio diversification have resulted in demand-driven easy financing conditions. At the same time,rising financing needs for many debut issuers,coupled with reduced access to concessional financing,relatively undeveloped domestic markets,and a favorable interest rate environment have made international bonds an attractive financing alternative for many countries.
As bonds issued in the international markets are typically denominated in hard currencies,have large volumes and a bullet structure,exposure to exchange rate and refinancing risk has increased. Therefore,risk-mitigating policy actions are needed to prepare for redemption,support debt sustainability,and secure adequate debt management capacity.
Source: IMF
ETF Securities-Global Commodity ETP Quarterly
July 18, 2014--The Q2 2014 edition of the Global Commodity ETP Quarterly is now available.
The report includes:
A comprehensive and fully up-to-date reference guide to investing in global commodity ETPs and indexes-no ETP type or geographic area is excluded. The report details the large and growing choice of commodity ETP exposures and strategies around the world.
Summary analysis of global commodity ETP flows, trading volumes and AUM trends. Includes a detailed analysis of the main trends in Q2 2014 and the outlook for the rest of the year.
Source: ETF Securities
July 18, 2014--Bank of New York Mellon, under pressure to boost flagging returns to shareholders including the activist investor Nelson Peltz, has shelved the sale of its corporate trust business
after failing to find a buyer willing to pay enough for the division...
Source: FT.com
Gold Fix Banks Said to Propose Changes to Pricing Process
July 16, 2014--The banks running the century-old London gold fixing that's used by miners and central banks to trade and value metal are proposing changes to the process, according to two people with knowledge of the matter.
The proposal is for an independent chairman and third-party administrator, said the people, who asked not to be identified because the information is private.
Source:Bloomberg
Wealth gaps lead investors to rethink risk in emerging markets
July 16, 2014--Middle-class anger at not seeing enough of the fruits of economic growth is growing in developing economies, and that anger is forcing the world's biggest investors to rethink how they rank emerging markets.
Political risk has always been a fact of life for investors focused on the developing world, but many money managers are now assessing which countries have institutions and governments robust enough to stop the kind of anger boiling over into the chaos seen after the Arab Spring uprisings.
Source: Reuters
iShares architect to leave Barclays (again)
July 16, 2014--Rory Tobin, one of the Barclays executives instrumental in the development of the iShares exchange-traded funds business that was acquired by BlackRock in late 2009, is to leave the UK bank for a second time.
Ashok Vaswani, head of personal and corporate banking at Barclays, said in a statement: "Rory Tobin, head of global investments and solutions at Barclays' wealth and investment management business, has decided to step down from Barclays and return to institutional asset management."
Source: Financial News
9th quarterly BNY Mellon ETF Services Newsletter
July 14, 2014--Market Commentary
At the end of May 2014, the global ETF industry had 3,749 ETFs, with 8,015 listings and total
assets of $2.40 trillion. The global ETF asset growth YTD 2014 through the end of May is
6.6%. This is from a total of 192 ETF providers on 57 exchanges.
Global inflows into ETFs in 2014 through the end of May was $88.74 billion.
U.S. Market Commentary
As of the end of May 2014, the US ETF industry had 1,314 ETFs/listings and total assets of$1.71 trillion. The US ETF asset growth YTD 2014 through the end of May is 6.2% from a
total of 42 providers on 3 exchanges. In 2014 through the end of May, there have been 74 new ETFs launched by 18 providers, while 19 ETFs have delisted.
Source:BNY Mellon
Regulators discuss "clock drift"
July 14, 2014--As trading hits warp speed, market cops have a growing headache: Clocks can't always keep up.
Most brokers and trading firms now use high-speed computers to fire off thousands of orders in the blink of an eye, and the acceleration is hindering regulators' ability to know precisely when buyers and sellers are matched up.
Source: Wall Street Journal
