Global ETF News Older than One Year
Data Disruption: The Impact of COVID-19 on Inflation Measurement
November 10, 2020--Lockdowns, working from home, and physical distancing caused people to spend larger shares of their household budgets on food and housing, while fewer people bought nonessentials, like airline tickets and clothing. And with incomes down as millions have lost their jobs, spending on nonessential items will likely remain depressed.
The consumer price index (CPI) does not reflect these abrupt changes in spending patterns because the CPI weights are not continuously updated. For example, the CPI could be pulled down by a decline in the prices of nonessentials that are no longer purchased.
A new IMF staff paper uses spending estimates derived from credit and debit card data to adjust the CPI weights to match spending patterns during the pandemic. The study finds that inflation during the first three months of the pandemic was actually higher than we thought.
Source: IMF
Top 10 Emerging Technologies to Watch in 2020
November 10, 2020--Electric planes, pain-free needles and virtual patients, are among the top 10 emerging technologies to watch in 2020
The list is compiled by a group of experts convened by the World Economic Forum and Scientific American.
To be selected, technologies must be new and poised to impact the world in the next three to five years.
From virtual patients to pain-free needles, synthesizing whole-genomes, and digital medicine, these top 10 emerging technologies are transforming our post-COVID-19 lives.
An international steering group of experts singled out these and other emerging technologies as the ones most likely to impact the world in the next three to five years.
For example, a Swiss group was able to synthesize the entire COVID-19 genome by reproducing the genetic sequence uploaded by Chinese scientists. They were essentially teleporting the virus into their laboratory for study without waiting for physical samples. The ability to write our genome will inevitably help doctors to cure genetic diseases.
Source: World Economic Forum
Global Mobility Report: Measuring Progress Toward Safe, Clean, Efficient, and Inclusive Transport
November 9, 2020--Digital technologies are transforming economic opportunities, a trend being accelerated as businesses and workers respond to the COVID-19 pandemic. The potential to raise productivity and to expand opportunities for firms that are small or in less developed locations is real.
But it is not being fully realized according to Europe 4.0: Addressing the Digital Dilemma, launched today. The evidence shows a tension in the region's presence in the digital space and in building a vibrant digital economy that benefits more people. Those technologies where European firms are most competitive are those where the benefits are most concentrated in larger firms and existing production hubs; those technologies with the greatest potential for inclusion are those where European firms are less competitive.
Source: World Bank
What can commercial property performance reveal about bank valuations?
November 9, 2020--Summary
Focus
We ask whether commercial property markets affect bank equity prices. For this purpose, we use the prices of real estate investment trusts (REITs) as a proxy for the performance of commercial property markets. Our study is based on data from the euro area, Japan and the United States, focusing on the 2003-20 period.
The study includes the effects of the Great Financial Crisis and the Covid-19 pandemic.
Contribution
We test the hypothesis that REIT prices affect bank equity prices, particularly during downturns. We have three reasons to consider this hypothesis valid. First, banks are exposed to commercial property. Second, REIT prices are likely to reflect commercial property valuations more promptly than publicly disclosed financial information. Third, as lenders, banks are more exposed to the downside than to the upside of real estate risk.
Source: BIS
Inside the regulatory sandbox: effects on fintech funding
November 9, 2020--Summary
Focus
The rise of fintechs promises to spur competition in the financial sector. This could lead to sizeable efficiency gains, more choice for consumers, and enhanced financial inclusion. However, the potentially disruptive growth of firms offering novel products and services poses new challenges for financial stability and consumer protection.
In response, policymakers around the world are creating "regulatory sandboxes" to foster innovation in the financial sector while keeping alert to emerging risks. One key objective of sandboxes is to facilitate start-ups' access to capital. The UK Financial Conduct Authority pioneered the world's first regulatory sandbox in 2015. To date, more than 50 countries have adopted sandboxes, but little evidence exists on whether they actually help innovative fintechs raise funding. And if so, why/how.
Source: BIS
Doubling back and doubling down: G20 scorecard on fossil fuel funding
November 9, 2020--Despite various commitments since 2009 to end government support for fossil fuels and make 'finance flows consistent with a pathway toward low greenhouse gas emissions and climate resilient development', G20 governments continued to provide significant support to fossil fuels in 2017-2019.
Recent estimates of public money commitments for fossil fuels in response to the Covid-19 crisis indicate that G20 countries are moving in the wrong direction and are not likely to meet their phase-out commitments.
view the Doubling Back and Doubling Down: G20 scorecard on fossil fuel funding report
Source: odi.org
World Bank Releases Guide for Sovereign Issuers to Engage with Investors on Environmental, Social and Governance (ESG) Issues
November 9, 2020 – The World Bank today published a guide to help public debt managers improve their engagement with investors on ESG topics. Titled "Engaging with Investors on Environmental, Social and Governance (ESG) Issues -A World Bank Guide for Sovereign Debt Managers," it helps bridge the communication gap on ESG issues between sovereign issuers and investors.
The guide outlines how sovereign debt investors use ESG information in their investment strategies, how debt managers are engaging with them, and how engagement can be improved.
Sovereign issuers, who represent 50 percent of the fixed income market by volume, are facing increasing interest on ESG issues from investors. Rating agencies and investors have long considered governance-related information while assessing sovereign risk, the macro-fiscal outlook, and debt-default risk.
Source: World Bank
Funds cut cash holdings to pre-pandemic levels
November 8, 2020--Fund managers cut their cash stockpiles to record lows as they piled in to buoyant stock markets in the second and third quarters, prompting concerns over how they would cope with a fresh surge of investor redemptions.
Many investment funds built up cash buffers after being hit by large redemption requests when the coronavirus pandemic exploded in March. However, new research by data provider eVestment shows cash positions have sunk back to their pre-coronavirus levels.
Source: FT.com
OECD Pension Markets in Focus 2020
November 6, 2020--Retirement savings in pension funds, pension insurance contracts and in other vehicles exceeded the USD 50 trillion mark worldwide for the first time at the end of 2019, with USD 49.2 trillion in the OECD area and USD 1.7 trillion in other reporting jurisdictions.
Countries around the globe are engaged in intense pension reform efforts, often involving an increased use of funded pension programmes managed by the private sector.
There is a growing need among policy makers and the regulatory community, as well as among private sector participants, to compare programme developments and experiences to those of other countries. Because funded pension arrangements are likely to play an increasingly important role in delivering retirement income security in many countries, and because the investment of pension assets will increasingly affect securities markets in future years, the availability of an accurate, comprehensive, comparable and up-to-date body of international statistics is a necessary tool for policy makers, regulators and market participants.
Source: OECD
Climate finance for developing countries rose to USD 78.9 billion in 2018
November 6, 2020--Climate finance provided and mobilised by developed countries for developing countries totalled USD 78.9 billion in 2018, up 11% from 71.2 billion in 2017. The increase was driven by a rise in public climate finance, while private climate finance was flat, according to new figures from the OECD.
Climate Finance Provided and Mobilised by Developed Countries in 2013-18 is the OECD's third assessment of progress towards the UNFCCC goal of mobilising USD 100 billion per year by 2020 to help developing countries tackle and adapt to climate change. This latest report deepens the analysis of aggregate figures by providing more insights on the characteristics and recipients of climate finance over the period studied.
view the OECD Climate Finance Provided and Mobilised by Developed Countries in 2013-18 report
Source: OECD
