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Debt Burden of Least Developed Countries continues to climb to a record $744 billion in 2019
October 12, 2020--More detailed and more disaggregated data on sovereign debt will help implement debt relief efforts in least developed countries
In response to an urgent need for greater debt transparency, the latest edition of the International Debt Statistics (IDS) report provides more detailed and more disaggregated data on external debt than ever before in its nearly 70-year history-including breakdowns of what each borrowing country owes to official and private creditors in each creditor country, and the expected month-by-month debt-service payments owed to them through 2021.
Before the onset of the COVID-19 pandemic, rising public debt levels were already a cause for concern, particularly in many of the world’s poorest countries as discussed in our Four Waves of Debt report published in December 2019. Responding to a call from the World Bank and the International Monetary Fund, the G20 endorsed the Debt Service Suspension Initiative (DSSI) in April 2020 to help up to 73 of the poorest countries manage the impact of the COVID-19 pandemic.
Unemployment Main Concern for Business Leaders but Climate is Moving Up List of Top Risks
October 7, 2020--Unemployment is main concern among executives, closely followed by infectious diseases, while fiscal crisis is third as top risks for doing business
Climate risks such as natural catastrophes and biodiversity loss and ecosystem collapse are moving up the list
The findings of Regional Risks for Doing Business 2020 are based on a survey of over 12,000 business leaders from 127 countries; discover live interactive data here
The data is released ahead of the World Economic Forum's inaugural Jobs Reset Summit (20-23 October) which aims to shape inclusive, fair and sustainable economies, societies and workplaces.
Unemployment is the main concern for business executives globally, with fiscal crisis - the top concern in 2019- coming third, according to the World Economic Forum’s interactive map on Regional Risks for Doing Business 2020. Infectious diseases progressed 28 spots and is the second most recurring risk, appearing in the top 10 in all regions except South Asia. Surveyed regions include East Asia and the Pacific, Eurasia, Europe, Latin America and the Caribbean, Middle East and North Africa, North America, South Asia, sub-Saharan Africa. The survey pulls 30 risks, including terrorist attacks, extreme weather events and state collapse or crisis.
OECD Economic Outlook-Interim Report September 2020
October 2, 2020--The OECD Economic Outlook is the OECD's twice-yearly analysis of the major economic trends and prospects for the next two years. Prepared by the OECD Economics Department, the Outlook puts forward a consistent set of projections for output, employment, government spending, prices and current balances based on a review of each member country and of the induced effect on each of them on international developments.
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OECD-Building confidence crucial amid an uncertain economic recovery
September 16, 2020--With the COVID-19 pandemic continuing to threaten jobs, businesses and the health and well-being of millions amid exceptional uncertainty, building confidence will be crucial to ensure that economies recover and adapt, says the OECD's Interim Economic Outlook.
After an unprecedented collapse in the first half of the year, economic output recovered swiftly following the easing of containment measures and the initial re-opening of businesses, but the pace of recovery has lost some momentum more recently.
New restrictions being imposed in some countries to tackle the resurgence of the virus are likely to have slowed growth, the report says.
Uncertainty remains high and the strength of the recovery varies markedly between countries and between business sectors. Prospects for an inclusive, resilient and sustainable economic growth will depend on a range of factors including the likelihood of new outbreaks of the virus, how well individuals observe health measures and restrictions, consumer and business confidence, and the extent to which government support to maintain jobs and help businesses succeeds in boosting demand.
view the OECD Economic Outlook, Interim Report Coronavirus (COVID-19): Living with uncertainty
Markets rose despite subdued economic recovery: BIS Quarterly Review
September 14, 2020--Financial markets gained despite a weak economic outlook and evidence of deteriorating credit quality.
Monetary and fiscal policy underpinned high valuations, particularly in advanced economies.
Concerns emerged about a disconnection between some risky asset classes and economic prospects.
Financial markets largely recovered from March's acute stress, according to the third BIS Quarterly Review1 of 2020. This was supported by both monetary and fiscal policy, and investor sentiment arising from better than expected economic indicators in the initial aftermath of the lockdown phase of the pandemic.
However, the Review indicates that the economy's upturn has been uneven and corporate balance sheets remain fragile. The associated concern of stretched valuations being disconnected from underlying economic prospects, most notably in some segments of the equity and corporate credit markets, has since been reflected in the recent stock market sell-off.
Private Sector Climate Finance After the Crisis
September 9, 2020--Climate investments in the emerging markets and developing economies (EMDEs) have so far fallen well short of what is required to meet targets set in the 2015 Paris Agreement. National commitments ahead of the 2021 UN climate summit will further underline the discrepancy.
Climate finance in the EMDEs has been dominated by public sources and development funds, while private investors, local capital markets, and green banking became significant only recently.
This paper surveys the incentives for the provision of dedicated green financial products by private investors and lenders in EMDEs, and the related challenges for regulators.
FSB extends implementation timelines for securities financing transactions
September 7, 2020--The Financial Stability Board (FSB) today announced extensions to the implementation timelines for minimum haircut standards for non-centrally cleared securities financing transactions (SFTs), to ease operational burdens on market participants and authorities, and thereby assist them in focusing on priorities from the impact of COVID-19.
SFTs such as securities lending and repurchase agreements (repos) play a crucial role in supporting price discovery and secondary market liquidity for a wide variety of securities. However, such transactions can also be used to take on leverage as well as maturity and liquidity mismatched exposures, and therefore can pose risks to financial stability.
Specter of Currency Skirmishes Emerge With Central Bank Talk
September 3, 2020--The dollar this week slumped to its weakest level in two years
ECB, RBNZ and BOE are keeping door open for more policy easing
Growing unease among global central banks about the slumping U.S. dollar has ignited speculation that a fresh currency war might be on the horizon.
European Central Bank official Philip Lane this week fired a warning shot, explicitly drawing attention to the exchange rate as the euro topped $1.20 for the first time in two years. Reserve Bank of New Zealand boss Adrian Orr was more circumspect about exchange rates, but nevertheless signaled he would ease monetary policy as necessary to stimulate growth.
ESG bond funds held back by fear of criticising US, research suggests
September 2, 2020--Fund managers' unwillingness to criticise western governments, particularly that of the US, is holding back the development of "sustainable" government bond funds, research suggests.
While corporate bonds can be scored using a similar ESG scoring system to that used for equities, "there are still question marks over how to best evaluate government debt, where there is a fine line between making an objective ESG assessment and straying into political territory", said Kenneth Lamont, research analyst for passive strategies at Morningstar.
BetaShares-Market Trends: September 2020
September 2. 2020--Key global trends-equity rally continues
Global equities continued their V-shaped recovery in August, while the $US continued its decline. In a counter-trend move, perhaps reflecting growing investor confidence in an economic recovery, there was a small uptick in global bond yields and an easing back in gold prices.
As seen in the chart set below, global bond yields and the $US remain in a downtrend, and gold prices in an uptrend*. On a total return basis, global equities have surpassed their previous peak at the end of last year, to be at the top end of a very wide and volatile range since early 2018.