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August 2011 FIF Market Share and Market Dynamics Reports – Executive Summary
September 15, 2011--U.S. Equities Market Share
Share volumes traded across Tape A, B, and C increased 74% monthly to 243 billion shares the highest since March 2009.
In August 2011, off-exchange trading accounted for 27% of the shares traded in NMS Equity Securities which is the lowest since February 2009.
Share volumes in NYSE-listed securities
increased 75% monthly to 133 billion shares, the highest since May 2009.
NASDAQ-listed securities traded over exchange increased 53% monthly to 58 billion shares, the highest since October 2008.
view August 2011 FIF Market Share and Market Dynamics Reports – Executive Summary
IOSCO announces commodity derivatives markets supervisory principles
September 15, 2011--The Technical Committee of the International Organization of Securities Commissions (IOSCO) has today published its report on Principles for the Regulation and Supervision of Commodity Derivatives Markets. The Report, prepared by the Task Force on Commodity Futures Markets, addresses the G20’s November 2010 request for further work on regulation and supervision of physical commodity derivatives markets.
The Principles are aimed at ensuring a globally consistent approach to the oversight of commodity derivatives markets which will deliver effective supervision, combats market manipulation and improves price transparency. They are aimed at contributing to enhanced price discovery in commodity derivative markets as opposed in themselves to addressing absolute price levels or price volatility in an underlying physical commodity.
The Principles update and add to the guidance in the 1997 Tokyo Communiqué which set benchmarks for contract design, market surveillance and information sharing for physical commodity derivatives markets. They are primarily intended to apply to exchange-traded futures contracts, futures contracts options and options referenced to a physical commodity, index or price series which may settle in cash or by physical delivery, although many of the principles will also be applicable to OTC markets.
Resource Summit Predicts Dangerous Future Trend towards Nationalization
September 15, 2011--More than 20 mining and metal industry leaders and cross-industry partners unanimously predicted an inevitable future increase in government nationalization of critical resources over the next two decades as a burgeoning middle class in emerging economies begins to demand higher living standards.
“The resounding answer was that nationalizations will take place and that this is not a good thing,” said Richard O’Brien, President and Chief Executive Officer of Newmont Mining Corporation, USA. The corporate executives were meeting as part of this year’s Resource Summit, a feature of the World Economic Forum’s Annual Meeting of the New Champions 2011 in Dalian, People’s Republic of China. The Summit is part of an ongoing dialogue on resource issues sponsored by the World Economic Forum. If nationalizations do take place, they will very likely have a negative impact on globalization and world trade.
By 2030, the world population will pass the 8 billion mark, and shortages are likely to be felt in water and food as well as petroleum mineral resources. In a panel discussion on resources, Sir Mohammad Jaafar, Chairman and Managing Director of the Kuwaiti Danish Dairy Company, Kuwait, noted that, by 2030, matching European living standards would require three planets of natural resources, and to match US living standards would require at least five. While it may be possible to meet some of the increasing demand with technology and innovation, prices – especially on fuel – will inevitably rise and even populations in the US and Europe will be forced to modify their lifestyles.
Report Highlights Innovative Business Practices for Sustainable Growth
World Economic Forum and Boston Consulting Group launch new report, Redefining the Future of Growth: The New Sustainability Champions
Companies from emerging markets, such as Costa Rica and the Philippines, share a unique set of practices that make for robust growth and enhance sustainability
September 15, 2011--The World Economic Forum today launched a new report, entitled Redefining the Future of Growth: The New Sustainability Champions. The report, prepared with The Boston Consulting Group (BCG), highlights innovative business practices from companies originating and operating in emerging markets. By focusing on a group of 16 exemplary companies called the New Sustainability Champions,
the report shows how those businesses create unconventional and profitable solutions that positively impact economic growth and enhance overall sustainability in their regions.
Taking into account criteria covering sustainability, innovation, scalability, geography and size, the World Economic Forum and BCG analysed over 1,000 businesses in the preparation of this report and identified 16 fast-growth companies that share a unique mindset and set of practices. The report contains valuable insights that can help business leaders better balance economic growth with responsible stewardship of Earth’s resources.
view the Redefining the Future of Growth: The New Sustainability Champions report
Survey: Inefficiencies in collateral management cost the financial sector more than €4 billion annually
Clearstream and Accenture surveys collateral management within a broad range of global banks/Fragmented internal and external collateral pools drive costs up/Upcoming regulatory changes increase need for collateral and better collateral management
September 14, 2011--The financial services sector could save more than €4 billion annually in collateral management costs by addressing operational inefficiencies, according to a survey by Accenture and Clearstream. The research, which was based on publicly available information, together with interviews with 31 executives at 16 global banks, found that decentralized operations and unaligned business objectives are limiting banks’ ability to manage collateral efficiently.
As a result, banks are unable to maximize liquidity, keep down financing costs and are forced to maintain excess collateral buffers. These inefficiencies cost the financial sector more than €4 billion annually, according to the research.
Banks use collateral mainly for secured funding from markets and central banks. It is key enabler of a variety of services and products, including traditional securities financing and the facilitation of trading and risk mitigation. Collateral management has become a critical industry issue as regulators set more rigorous capital and liquidity standards and banks confront new cost and growth challenges in the wake of the global financial crisis. Efficient collateral management can free up liquidity for banks, enabling them to offer a greater range of products and services and more readily meet these new regulatory requirements. Accenture estimates the total value of cash and securities used as collateral in the financial system globally to be more than €12 trillion.
What Fuels the Boom Drives the Bust: Regulation and the Mortgage Crisis-IMF Working paper
September 14, 2011--Summary: We show that the lightly regulated non-bank mortgage originators contributed disproportionately to the recent boom-bust housing cycle. Using comprehensive data on mortgage originations, which we aggregate at the county level, we first establish that the market share of these independent non-bank lenders increased in virtually all US counties during the boom.
We then exploit the heterogeneity in the market share of independent lenders across counties as of 2005 and show that higher market participation by these lenders is associated with increased foreclosure filing rates at the onset of the housing downturn. We carefully control for counties’ economic, demographic, and housing market characteristics using both parametric and semi-nonparametric methods. We show that this relation between the pre-crisis market share of independents and the rise in foreclosure is more pronounced in less regulated states. The macroeconomic consequences of our findings are significant: we show that the market share of these lenders as of 2005 is also a strong predictor of the severity of the housing downturn and subsequent rise in unemployment. Overall our findings lend support to the view that more stringent regulation could have averted some of the volatility on the housing market during the recent boom-bust episode.
view the IMF working paper-What Fuels the Boom Drives the Bust: Regulation and the Mortgage Crisis
Thomson Reuters Global Equities Monthly Market Share Data Updated - Reflects August 2011 Activity
September 14, 2011--Monthly Data at a Glance
The charts show the traded value of all MTF operated Dark Pools and six of the leading broker crossing services equities (in Euro € millions) recorded over the last 13 months. For the most recent month the break down for the main venues is provided.
The data for the MTFs has been sourced from our Equity Market Share Reporter whilst the Broker Crossing System data, available since June 2010 has been sourced from Markit BCS Daily reporting (http://www.markit.com/).
Assessing Systemic Trade Interconnectedness - An Empirical Approach
September 14, 2011--Summary: The paper focuses on systemically important jurisdictions in the global trade network, complementing recent IMF work on systemically important financial sectors. Using the IMF’s Direction of Trade Statistics (DOTS) database and network analysis, the paper develops a framework for ranking jurisdictions based on trade size and trade interconnectedness indicators using data for 2000 and 2010.
The results show a near perfect overlap between the top 25 systemically important trade and financial jurisdictions, suggesting that these ought to be the focus of risk-based surveillance on cross-border spillovers and contagion. In addition, a number of extensions to the approach are developed that can provide a better understanding of trade dynamics at the bilateral, regional, and global levels.
view report-Assessing Systemic Trade Interconnectedness - An Empirical Approach
Inefficiencies in Collateral Management Cost the Financial Sector More than €4 Billion Annually, According to Accenture/Clearstream Survey
Inefficiencies in Collateral Management Cost the Financial Sector More than €4 Billion Annually, According to Accenture/Clearstream Survey
September 14, 2011--The financial services sector could save more than €4 billion annually in collateral management costs by addressing operational inefficiencies, according to a survey by Accenture (NYSE: ACN) and Clearstream.
The research, which was based on publicly available information and interviews with 31 executives at 16 global banks, found that decentralized operations and unaligned business objectives are limiting banks’ ability to manage collateral efficiently. As a result, banks are unable to maximize liquidity, keep down financing costs and are forced to maintain excess collateral buffers. These inefficiencies cost the financial sector more than €4 billion annually, according to the research.
Banks use collateral mainly for secured funding from markets and central banks. It is a key enabler of a variety of services and products, including traditional securities financing and the facilitation of trading and risk mitigation. Collateral management has become a critical industry issue as regulators set more rigorous capital and liquidity standards and banks confront new cost and growth challenges in the wake of the global financial crisis. Efficient collateral management can free up liquidity for banks, enabling them to offer a greater range of products and services and more readily meet these new regulatory requirements. Accenture estimates the total value of cash and securities used as collateral in the financial system globally to be more than €12 trillion.
Carbon Disclosure Project Global 500 report: Commercial interests driving greenhouse gas emissions reduction at world’s largest companies
September 14, 2011-- The 2011 edition of the annual Carbon Disclosure Project (CDP) Global 5001 report, published today, which examines carbon reduction activities at the world’s largest public corporations, has found for the first time in the ten year history of the survey, that the majority have climate change actions embedded as part of their business strategy. The report, written by global professional services firm PwC on behalf of CDP, attributes this to growing board-level awareness of the link between energy efficiency and increased profitability.
The report, entitled Accelerating low carbon growth, analyzed disclosures from 396 of the world’s largest companies2, which revealed 68% have climate change at the heart of business strategies, compared with 48% in 2010. There was also a marked rise in the number of companies reporting reduced greenhouse gas emissions as a result of emissions reduction activities (45%, up from 19% in 2010).
A correlation was also established between higher stock market performance over time, and representation on CDP’s Carbon Performance Leadership Index (CPLI) and the Carbon Disclosure Leadership Index (CDLI). Companies with a strategic focus on climate change provided investors with approximately double the average total return of the Global 500 from January 2005 to May 2011.
Paul Simpson, CEO of the Carbon Disclosure Project, said: “The improved financial performance of companies with high carbon performance is a clear indicator that it makes good business sense to manage and reduce carbon emissions. This is a win win for business – the short ROIs many emissions reducing activities have, can help increase profitability. Companies yet to take action on climate change will have to work hard to remain competitive as we head towards an increasingly resourced constrained, low carbon economy.”
view the CDP Global 500 Report 2011: Accelerating Low Carbon Growth