Global ETF News Older than One Year
Analytics of Systemic Crises and the Role of Global Financial Safety Nets -IMF Working paper
July 25, 2011-Summary:
In response to the global crisis, the Fund overhauled its lending toolkit and boosted its resources, strengthening its ability to pre-empt financial crises.
This paper—with the companion paper on Mapping Cross-Border Financial Linkages—takes another look at the recent global crisis in the context of a broader review of past systemic crises to (i) assess whether rising linkages across countries is a source of latent systemic instability and (ii) ascertain whether the global financial safety net (GFSN) is adequate to contain crisis and contagion risks arising from such systemic instability. This paper develops a new methodology to identify systemic crises and reviews associated policy responses from a global, rather than country-level, perspective
view the Analytics of Systemic Crises and the Role of Global Financial Safety Nets paper
Source: IMF
Mapping Cross-Border Financial Linkages - A Supporting Case for Global Financial Safety Nets
July 25, 2011--Summary:
This paper maps cross-border financial linkages and identifies factors that drive them, contributing to the discussion on the appropriate design of a global financial safety net (GFSN).
It builds on previous staff work and complements the findings of the companion paper on the Analytics of Systemic Crises and the Role of Global Financial Safety Nets. This paper notes the growing roles of financial linkages and complexity in injecting latent instability into the global financial system, underscoring the value of a GFSN design that is effective in forestalling the risk that a localized liquidity shock propagates through the global financial network turning into a large-scale systemic crisis.
Source: IMF
U.S. Money Fund Exposure to European Banks Declines Moderately
July 25, 2011--Fitch Ratings has just published a report, U.S. Money Fund Exposure to European Banks Declines Moderately, which updates (as of June 30) its analysis of the exposure of U.S. prime money market funds to European banks. The study, based on a sample of the 10 largest prime money market funds (MMFs), reveals that:
European bank exposure on a dollar basis dropped by 8.7%, while total MMF assets in the sample decreased 7.5%
French exposure declined roughly in line with the overall decline in European exposure
U.K. dollar exposure remained essentially flat, but increased as a percentage of the funds' assets
Source: Fitch Ratings
LSE ramps up efforts against Deutsche Boerse-NYSE merger
July 25, 2011-The London Stock Exchange has stepped up its lobbying efforts against the merger between NYSE Euronext and Deutsche Börse, claiming,
in a document seen by Financial News, that the combined entity would “eliminate competition” in the European listed derivatives market and that the two companies have a “track record of acting against customers’ best interests”.
Source: efinancialnews
ETFS Precious Metals Weekly: Gold Soars Through $1620/oz as US Debt Deadline Looms, Deal Remains Elusive
July 25, 2011--Gold price rallies to new record high above $1620/oz as time begins to run out for raising the US debt ceiling to avoid default. Treasury Secretary Geithner remarked that Republican and Democrat lawmakers will need to find a suitable agreement by today in order to allow enough time for it to be passed into law by the deadline of Aug 2.
Investor appetite for gold accelerates amidst market uncertainty. COMEX speculative net long gold positioning reached its highest level in 8 months last week, increasing over 40% over the past fortnight.
Silver, platinum, palladium head higher as Euro debt package eases near term default concerns and US lead indicators point to a H2 rebound in the US. Futures positioning in silver, platinum and palladium have begun to recover over recent weeks after hitting their lowest levels in over a year after a COMEXrestriction related sell-off in May, with the sharpest rebound occurring in palladium.
Platinum supply issues remain at the fore as Lonmin, the No.3 global producer, announces drop in production, while Africa nationalisation issues also re-surface. Zimbabwe mooted possible expulsion of miners – including some of Africa’s largest platinum/palladium miners – that fail to meet local ownership targets last week.
Gold spikes above $1,620/oz as debt impasses stoke default concerns in the US. S&P reiterated its threat to downgrade its US sovereign debt credit rating as the Aug 2 deadline to raise the US debt ceiling looms. S&P estimates that there is a 50:50 chance that it will cut the USA AAA government debt rating within 3 months. No.1 global bond manager PIMCO suggested “In most likelihood, a last-minute political compromise will avoid a default but will leave the AAA rating extremely vulnerable”, with analysts speculating that any deal may leave longer term spending/tax questions unanswered.
visit www.etfsecurities.com for more info
Source: Source: ETFS Securities
SEC and Turkey Securities Regulator Announce Terms of Reference for Enhanced Cooperation and Collaboration
July 22, 2011--The Securities and Exchange Commission and the Capital Markets Board of Turkey (CMB) today announced a new relationship to enhance cooperation and collaboration with the aim of promoting investor protection, fostering market integrity, and facilitating cross-border securities activities between Turkey and the United States.
In light of the growing interest in the cross-border flow of financial services and investment between the U.S. and Turkey, the dialogue will provide an opportunity for the SEC and the CMB to discuss issues of common concern, including those relating to supervisory and enforcement matters.
SEC Chairman Mary Schapiro and CMB Chairman Dr. Vedat Akgiray elaborated on the terms establishing the structure of and agenda for a SEC-CMB dialogue, which has three main objectives:
Source: SEC.gov
Key Trends in Implementation of the Fund's Transparency Policy-IMF Working paper
July 22, 2011--Summary:
At the time of the 2005 review of the Fund’s transparency policy, it was agreed that information on key trends in implementation of the transparency policy would be circulated to the Board regularly, along with lists indicating the publication status of reports discussed by the Board.
The set of tables provided in this report updates the last Key Trends with information on documents issued through December 2010.
View IMF Working paper- Key Trends in Implementation of the Fund's Transparency Policy
Source: IMF
Changing Patterns of Global Trade-IMF Working paper
July 22, 2011--Summary:
The past few decades have seen important shifts that have reshaped the global trade landscape. As a share of global output, trade is now at almost three times the level in the early 1950s, in large part driven by the integration of rapidly growing emerging market economies (EMEs).
The expansion in trade is mostly accounted for by growth in noncommodity exports, especially of high-technology products such as computers and electronics. It is also characterized by a growing role of global supply chains and an ongoing shift of technology content toward EMEs. These developments in global trade have been associated with growing trade interconnectedness and carry important implications for trade patterns, in particular in response to relative price changes. The aim of this paper is to outline the factors underlying these changes and analyze their implications for the outlook for global trade patterns.
view the IMF working paper-Changing Patterns of Global Trade
Source: IMF
IEA calls halt to emergency oil release
July 21, 2011--The International Energy Agency has decided not to repeat a highly unusual decision to draw on strategic oil reserves, while defending the original release as successfully meeting a “market need”.
The western countries’ oil watchdog made 60m barrels available for 30 days after June 23, saying this would cover the loss of Libyan output before other Opec members could raise their production.
Source: FT.com
EDHEC-Risk Institute proposes an integrated approach to sovereign wealth risk management
July 21, 2011--This new publication, "An Integrated Approach to Sovereign Wealth Risk Management," contains the results of the second-year research work conducted at EDHEC-Risk Institute within the Deutsche Bank research chair on asset-liability management (ALM) techniques for sovereign wealth fund (SWF) management.
The publication extends earlier work on the optimal investment policy and risk management practices of sovereign wealth funds by integrating these funds into the economic balance sheets of their sponsoring countries. This echoes recent advances in corporate pension fund management that consider the fund an integral part of the corporate balance sheet and jointly analyse capital structure and pension fund allocation choices. The research shows how to derive the optimal asset allocation for sovereign assets given different drivers of economic risks as well as varying degrees of indebtedness.
It puts forward a model that decomposes a SWF’s demand for risky assets into a combination of speculative and hedging demands. Speculative demand is the demand for assets which maximise risk-adjusted returns while total hedging demand arises from liability-hedging motives and from the demand for assets whose dynamics mitigate fluctuations in combined sovereign assets or lessen shocks to government budgets. Assets with low correlation with changes in the sovereign’s budget or that offer insurance against tail risks for the sponsor are desirable from a hedging perspective. Speculative demand is an important driver of total asset demand only if risk aversion is low or if financial wealth is very large relative to the underlying economy. Other things equal, (high) economic leverage is found to (strongly) reduce speculative demand while leaving hedging demand unchanged.
The publication comments on the asset allocation implications of both the key budgetary risks and the leverage of China, Russia, and Gulf Cooperation Council countries. It also uses an empirical application to illustrate the impact of leverage and the relevance of dynamic allocation for a commodity SWF.
view the : An Integrated Approach to Sovereign Wealth Risk Management report
Source: EDHEC-Risk Institute
