Global ETF News Older than One Year
CPMI and IOSCO publish guidance, call for comments on stablecoinarrangements
October 6, 2021--CPMI and IOSCO call for comments on new consultation report confirmingthat the Principles for Financial Market Infrastructures (PFMI) apply to systemically important stablecoin arrangements (SAs).
The report proposes additional guidance on how certain aspects of the PFMI apply to the novel features of SAs
CPMI and IOSCO may further examine regulatory, supervisory andoversight issues associated with SAs and coordinate with other standard-setting bodies.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) today published for public consultation preliminary guidance that confirms and clarifies that stablecoin arrangements should observe international standards for payment, clearing andsettlement systems. "The payments landscape has undergone rapid transformation in recent years andcontinues to evolve at pace. This is happening at the same time as financial innovation offers the prospect of new payment services and greater competition in payments but also potential risks to the financial system.
Source: IOSCO
IMF Annual Report-Build Forward Better-A recovery is underway, but the economic fallout from the global pandemic could be with us for years to come
October 5, 2021--With the crisis exacerbating prepandemic vulnerabilities, country prospects are diverging. Nearly half of emerging market and developing economies and some middle-income countries are now at risk of falling further behind, undoing much of the progress made toward achieving the UN Sustainable Development Goals. Within countries, inequality is on the rise as well; workers with fewer skills, youth, women, and those informally employed are suffering disproportionate income losses.
Sustaining the recovery will require an ongoing policy push, including to secure and expand access to vaccines and to maintain economic lifelines and targeted policy support, tailored to the stage of the pandemic, the strength of the economic recovery, and countries' structural characteristics. Multilateral cooperation will be vital to ensure all countries have equitable access to vaccines and financially constrained economies have adequate access to international liquidity.
view the 2021 IMF Annual Report-Build Forward Better
Source: IMF
Disappearing water in a warming climate: a story in four visuals
October 4, 2021--Water scarcity is poised to exact an increasingly heavy toll.
The issue will likely be a focus of the upcoming COP26 climate summit.
The World Economic Forum has created visualizations of vanishing water in several locations.
Water scarcity will be the biggest climate-related threat to corporate assets like factories within the next few decades, according to a recent report-but it seems to have barely registered on investors’ radar.
Of course, the human cost of worsening scarcity is already fully apparent; about one out of every four people in world don't have access to safely managed drinking water at home, and in just a few years about two-thirds of the global population could face water shortages.
A lack of water is triggering violent conflict in places like India's Northern Plains, and creating new migrants and refugees who may contribute to further shortages wherever they resettle. Sydney will endure shortfalls within 20 years if the city continues growing at its current rate, according to a recent estimate, while residents of San Jose, California, (the "Capital of Silicon Valley") are being threatened with penalties if they don't cut their water use by 15%. Kenya’s drought has been declared a national disaster.
Source: weforum.org
How Investment Funds Can Drive the Green Transition
October 4, 2021---Sustainable investment funds need to be scaled up to support a successful transition to a green economy
The transition to net-zero greenhouse gas emissions requires unprecedented change by companies and governments, as well as additional investment of as much as $20 trillion over the next two decades. Strong fiscal policies, complemented by a broad range of regulatory and financial policies, will be necessary to facilitate the green transition.
The world's $50 trillion investment fund industry, especially funds with a sustainability focus, can play an important role financing the transition to a greener economy and helping to avoid some of the most perilous effects of climate change, according to our recent analysis as part of the IMF's Global Financial Stability Report.
Source: IMF
Crypto Boom Poses New Challenges to Financial Stability
October 1, 2021--As crypto assets take hold, regulators need to step up.
Crypto assets offer a new world of opportunities: Quick and easy payments. Innovative financial services. Inclusive access to previously "unbanked" parts of the world. All are made possible by the crypto ecosystem.
But along with the opportunities come challenges and risks. The latest Global Financial Stability Report describes the risks posed by the crypto ecosystem and offers some policy options to help navigate this uncharted territory.
The Crypto Ecosystem—What Is It, What's at Risk?
The total market value of all the crypto assets surpassed $2 trillion as of September 2021-a 10-fold increase since early 2020. An entire ecosystem is also flourishing, replete with exchanges, wallets, miners, and stablecoin issuers.
Source: IMF
Central banks and the BIS explore what a retail CBDC might look like
September 30, 2021--Seven central banks and the BIS take forward their work on retail central bank digital currencies and analyse policy options and practical implementation issues
New set of reports explores how CBDCs could best meet users' future needs through developing interoperable systems that support private innovation while preserving public trust.
Extensive cooperation and dialogue will be required to develop and run a CBDC, preserving the centrality of central bank money for future systems that anchor public trust and support public welfare
For central bank digital currencies (CBDC) to work effectively, public and private institutions need to cooperate to ensure integration with existing payments systems; to anticipate customers' future needs; and to support innovation while preserving public trust, privacy and stability in the broader financial system.
These are the main conclusions of a new set of reports issued by seven central banks and the Bank for International Settlements (BIS) that looked into users, needs, technological design options and financial stability implications of retail or "general purpose" CBDCs.
Source: BIS
ETFGI reports record assets and net inflows of US$327 billion and US$109 billion respectively into ESG ETFs and ETPs listed globally at end of August 2021
September 28, 2021--September 28, 2021-- ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs and ETPs ecosystem, reported today that Environmental, Social, and Governance (ESG) ETFs and ETPs listed globally gathered net inflows of US$11.24 billion during August, bringing year-to-date net inflows to a record US$108.73 billion which is much higher than the US$41.47 billion gathered at this point last year and US$20.25 billion over the full year 2020 record net inflows US$88.45 billion.
Total assets invested in ESG ETFs and ETPs increased by 6.1% from US$308 billion at the end of June 2021 to US$327 billion and 69% YTD in 2021, according to ETFGI's August 2021 ETF and ETP ESG industry landscape insights report, an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Record assets of $327 billion invested in ETFs and ETPs listed globally at the end of August 2021.
Record YTD 2021 net inflows of $108.73 Bn beating the prior record of $41.47 Bn gathered in YTD 2020.
$108.73 Bn YTD net inflows are just $20.25 Bn over full year 2020 record net inflows $88.45 Bn.
$155.7 billion in net inflows gathered in the past 12 months.
Assets increased 69% YTD in 2021, going from US$193 billion at end of 2020, to US$327 trillion.
66th month of consecutive net inflows.
Equity ETFs and ETPs listed globally gathered a record $81.20 Bn in YTD net inflows 2021.
Source: ETFGI
Monetary arithmetic and inflation risk
September 28, 2021--Between 2007 and 2020, the balance sheets of the European Central Bank, the Bank of Japan, and the Fed have all increased about sevenfold. But inflation stayed low throughout the 2010s. This was possible due to decreasing money velocity and the money multiplier. However, a continuation of asset purchasing programs by central banks involves the risk of higher inflation and fiscal dominance.
Fiscal and monetary policy responses to the 2007-2009 global financial crisis (GFC) and the 2020-2021 COVID-19 crisis led to rapid increases in public debt and central bank balance sheets in most advanced economies. However, inflation remained at record-low levels until early 2021. At first glance, this looks like an invalidation of the identities that describe the relationship between money supply and inflation. This entails the risk of over-optimism: downplaying inflation risks in economic policy debates could have negative macroeconomic consequences. In fact, the monetary arithmetic has not stopped working. Rather, changed parameters must be correctly understood, in particular in the context of increased engagement of central banks in public debt financing. view more
Source: bruegel.org
IMF-Carbon Pricing: What Role for Border Carbon Adjustments?
September 27, 2021--Summary:
This Climate Note discusses the rationale, design, and impacts of border carbon adjustments (BCAs), charges on embodied carbon in imports potentially matched by rebates for embodied carbon in exports. Large disparities in carbon pricing between countries is raising concerns about competitiveness and emissions leakage, and BCAs are a potentially effective instrument for addressing such concerns. Design details are critical, however.
For example, limiting coverage of the BCA to energy-intensive, trade-exposed industries facilitates administration, and initially benchmarking BCAs on domestic emissions intensities would help ease the transition for emissions-intensive trading partners. It is also important to consider how to apply BCAs across countries with different approaches to emissions mitigation. BCAs are challenging because they pose legal risks and may be at odds with the differentiated responsibilities of developing countries. Furthermore, BCAs provide only modest incentives for other large emitting countries to scale carbon pricing-an international carbon price floor would be far more effective in this regard.
Source: IMF
Passive investment blamed for inflating stock market bubble
September 27, 2021--Research suggests index funds have insulated US equities from threat of a sustained bear market.
The trillions of dollars that have flooded into passive funds in recent years have inflated valuations, radically reshaping the US stock market and insulating it from the threat of a sustained bear market, research has claimed.
Source: ft.com
