Global ETF News Older than One Year
Chinese banks flee London's tough rules
October 28, 2012--China's largest state-owned banks are moving big chunks of their European business to Luxembourg as they seek to escape tougher regulation in the City of London.
In a recent letter to the UK Treasury, the Chinese banks bitterly complained that uneven regulation and “rigorously demanding” liquidity rules had prompted them to transfer business and even the management of their European operations out of London.
Source: FT.com
US money market funds return to eurozone
October 28, 2012--US money market funds have increased their exposure to eurozone banks, in the latest sign of returning confidence in the stability of Europe's monetary union.
Exposure to eurozone banks of US prime money market funds at the end of September was 16 per cent higher on a dollar basis than a month earlier, according to Fitch Ratings. The third consecutive monthly rise followed a pledge in late July by Mario Draghi, European Central Bank president, to do “whatever it takes” to preserve the euro’s integrity
Source: FT.com
Gold Traders More Bullish as ETP Hoard Sets Record: Commodities
October 26, 2012--Gold traders are the most bullish in three weeks as investors' bullion holdings rose to a record on mounting speculation that central banks will add stimulus to bolster economic growth.
Fourteen of 26 analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and three were neutral. Investors boosted holdings in exchange-traded products to an all-time high of 2,585.1 metric tons yesterday, valued at $142.4 billion, data compiled by Bloomberg show. Hedge funds’ bets on a rally are near the biggest in more than a year, according to U.S. Commodity Futures Trading Commission data.
Source: Bloomberg
IMF Working paper-The Domestic Credit Supply Response to International Bank Deleveraging: Is Asia Different?
October 26, 2012--Summary: During the global financial crisis, European banks contracted foreign claims on recipient economies sharply. This paper examines the impact of that deleveraging on credit supply in recipient economies, with a particular focus on Asia.
Identification is achieved by exploiting heterogeneity in ex-ante patterns of funding reliance on different European banking systems, and in variation in the ratio of local claims in local currency to total foreign claims in recipient economies. These sources of variation are used to create instruments for the deleveraging shock. We find that the contraction in European bank foreign claims was associated with a substantial reduction in domestic credit supply in a broad sample of countries. However, the credit supply response in Asia was only about half the size of the response in non-Asian countries, possibly due to a more robust policy response and healthier local bank balance sheets at the outset of the crisis.
Source: IMF
FTSE/ATHEX Global Traders Index Series New Indices Creation
October 25, 2012--ATHEX in cooperation with FTSE, designed a new index series to enable the monitoring of the market performance of the listed companies that have highly globalised activity either in exports or through production abroad.
These indices record and highlight in the globalized investment community the transnational character of the Greek companies which is constantly strengthened.
Source: Mondovisione
Credit Suisse ETF sale could raise $150m
October 25, 2012--The sale of Credit Suisse's exchange traded funds business could raise around $150m for the Swiss bank, according to Citi.
Credit Suisse put its ETF business, which has $17bn in assets, up for sale earlier this year, drawing interest from BlackRock and State Street Global Advisors, the world’s two largest ETF providers.
Source: FT.com
IMF Working paper-Oil and the World Economy: Some Possible Futures
October 25, 2012--Summary: This paper, using a six-region DSGE model of the world economy, assesses the GDP and current account implications of permanent oil supply shocks hitting the world economy at an unspecified future date.
For modest-sized shocks and conventional production technologies the effects are modest. But for larger shocks, for elasticities of substitution that decline as oil usage is reduced to a minimum, and for production functions in which oil acts as a critical enabler of technologies, GDP growth could drop significantly. Also, oil prices could become so high that smooth adjustment, as assumed in the model, may become very difficult.
view the IMF Working paper-Oil and the World Economy: Some Possible Futures
Source: IMF
IMF Working paper-The Global Impact of the Systemic Economies and MENA Business Cycles
October 25, 2012--Summary: This paper analyzes spillovers from macroeconomic shocks in systemic economies (China, the Euro Area, and the United States) to the Middle East and North Africa (MENA) region as well as outward spillovers from a GDP shock in the Gulf Cooperation Council (GCC) countries and MENA oil exporters to the rest of the world.
This analysis is based on a Global Vector Autoregression (GVAR) model, estimated for 38 countries/regions over the period 1979Q2 to 2011Q2. Spillovers are transmitted across economies via trade, financial, and commodity price linkages. The results show that the MENA countries are more sensitive to developments in China than to shocks in the Euro Area or the United States, in line with the direction of evolving trade patterns and the emergence of China as a key driver of the global economy. Outward spillovers from the GCC region and MENA oil exporters are likely to be stronger in their immediate geographical proximity, but also have global implications.
Source: IMF
Japan Banks Hedge Bets Over New US Swap Rules
Japanese banks may reduce trading of derivatives with U.S. banks to skirt new Dodd-Frank rules, bank officials say
Officials add that banks will consider registering U.S. subsidiaries with U.S. regulators
Japanese banks remain cautious about taking clear stance until rules finalized
October 25, 2012--Japanese banks appear to be hedging their bets in response to new U.S. rules tied to the Dodd-Frank market overhaul,
with officials saying they may cut back on trading financial derivatives with their U.S. counterparts while stopping short of not registering with U.S. regulators at all.
Banks outside the U.S. have criticized the new proposals requiring them to register with U.S. regulators if they trade a certain amount of swaps with U.S. banks or for U.S. clients.
Banks in other parts of Asia are already pulling back on trading derivatives with U.S. counterparts while two large banks in Asia and Europe--Singapore's DBS Group Holdings Ltd. and Sweden's Nordea Bank AB--recently declared they wouldn't register under the rules.
Source: The Wall Street Journal
Progress note on the Global LEI Initiative
October 24, 2012--This is the third of a series of notes on the implementation of the legal entity identifier (LEI) initiative. The first progress note is available here and the second note here
Following endorsement of the FSB report and recommendations by the G-20, the FSB LEI Implementation Group (IG) has been tasked with taking forward the planning and development work to launch the global LEI system by March 2013.
The IG is collaborating closely with private sector experts through a Private Sector Preparatory Group (PSPG) of some 300 members from 25 jurisdictions across the globe. Charter for the Regulatory Oversight Committee (ROC): The IG has prepared a draft Charter for the Regulatory Oversight Committee for review and endorsement by the FSB and G20. The draft was supported by the FSB at its recent meeting in Tokyo for submission to the early November G20 Finance Ministers and Central Bank Governors meeting for final endorsement. Approval of the Charter will initiate the process for the ROC to be formed. ROC membership will be open to public authorities from across the globe that assent to the Charter. Authorities will also be able to apply for Observer status. The objective is to launch the ROC as the permanent governance body for the global LEI system in January 2013.
Source: FSB
