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Oil Gains With OPEC Compliance Overshadowing U.S. Demand Fears
July 13, 2020--Saudi oil minister commends Iraq for oil-production curbs
Market turns attention to weekly storage data due Wednesday
Crude futures rose as initial signs that OPEC members intend to comply with promises to curtail production eclipsed fears that a resurgence in coronavirus cases would send demand back to the worst days of the pandemic.
CryptoCompare Updates Benchmark for Digital Asset Exchanges: US Venues Retain Top Spots
July 13, 2020--CryptoCompare, the global leader in digital asset data, today announced an update to its cryptocurrency Exchange Benchmark, revealing a new ranking of exchanges based on several criteria including counterparty, operational, trading and security risk.
The Benchmark ranks more than 165 global spot exchanges to bring transparency and accountability to the cryptoasset exchange landscape by providing a framework for assessing risk. The Benchmark assigns a AA- F grade to help identify the lowest risk venues in the industry.
The analysis reveals that US exchanges retain the top spots, with Gemini ranked first. Gemini is followed by Coinbase (2), Kraken (3), itBit (4) and Bitstamp (5).
OPEC Readies Next Move in Bid to Avoid Oil-Market Taper Tantrum
July 11, 2020-Saudi Oil Minister Prince Abdulaziz bin Salman likes the idea of OPEC+ acting as the central bank of oil. And he expresses admiration for Alan Greenspan, former chairman of the U.S. Federal Reserve.
The challenge now confronting the oil producers’ club is one that's all too familiar to the Fed: how to avoid a "taper tantrum," the market panic that ensued when the institution proposed tightening monetary policy in 2013.
FSB and Basel Committee set out supervisory recommendations for benchmark transition
July 9, 2020--Continued reliance of financial markets on LIBOR poses clear risks to global financial stability.
Transition away from LIBOR by end-2021 requires significant commitment and sustained effort from both financial and non-financial institutions.
Report includes three sets of recommendations to support LIBOR transition.
The Financial Stability Board (FSB) and Basel Committee on Banking Supervision (BCBS) today published a report on Supervisory issues associated with benchmark transition. Continued reliance of financial markets on LIBOR poses clear risks to global financial stability. Transition away from LIBOR by end-2021 requires significant commitment and sustained effort from both financial and non-financial institutions across many jurisdictions. The report includes insights on remaining challenges to transition based on surveys undertaken by the FSB, the BCBS and the International Association of Insurance Supervisors (IAIS). It sets out recommendations for authorities to support financial institutions' and their clients' progress in transitioning away from LIBOR.
S&P Global predicts global credit losses of $2.1T
July 9, 2020--Credit ratings agency S&P Global forecasted on Thursday that the COVID-19 pandemic caused credit losses for world banks of around $2.1 trillion. Compared to 2019, losses will double to $1.3 trillion in 2020.
Agency said 60% of the forecast credit losses will arise in Asia-Pacific but that the highest relative increases will occur in North America and Western Europe.
Gold rallies to $1 800 an ounce
July 8, 2020-- Gold's allure is only getting stronger as 2020 unfolds. Spot prices reached $1 800 an ounce and year-to-date inflows into bullion-backed exchange-traded funds have topped the record full-year total set in 2009.
Investors have favoured havens this year as the coronavirus pandemic rips through economies, spurring sustained inflows into gold-backed ETFs as central banks and governments unleash vast stimulus programs. States across the US recorded new highs in cases and deaths on Tuesday, and Federal Reserve Bank of Atlanta President Raphael Bostic said the resurgence of the virus may be threatening the pace of America's recovery.
Why ESG investing makes fund managers more money
July 8, 2020--In recent years, some investors have felt so irritated by the pious tone of the environment, social and governance sector they have joked that the ESG acronym should stand for "eye-roll, sneer and groan".
Such laughter is looking hollow now.
Among the many long-held assumptions turned upside down by Covid-19 is the notion held by many investors that ESG investing implies lower returns. Instead, 2020 suggests that virtue pays.
Consider the first four months of this year, when Covid-19 caused global markets to swoon. Over this period, the S&P 500 ESG index, which tracks big US companies with high ESG ratings, beat the normal S&P index by 0.6 per cent.
Negative interest rates can be a doom loop for pension investors
July 8, 2020--Fixed income is turning into fixed expense for those who seek haven assets for capital conservation
"On the whole, negative interest rates, no ...not an area I would want to go to,” said Bank of England governor Andrew Bailey to members of the UK parliament in March. Two months later Britain sold a government bond with a negative yield for the first time, as Covid-19 created the dystopian reality of deserted airports and traffic-free highways.
Basel Committee publishes final revisions to the credit valuation adjustment risk framework
July 8, 2020--The Basel Committee on Banking Supervision today published an updated standard for the regulatory capital treatment of credit valuation adjustment (CVA) risk for derivatives and securities financing transactions.
The revisions for the regulatory capital treatment of CVA risk include:
recalibrated risk weights;
different treatment of certain client cleared derivatives; and
an overall recalibration of the standardised and basic approach.
In November 2019 the Committee consulted on a set of targeted, final revisions to the CVA risk framework published in December 2017. The changes finalised today bring the revised CVA risk framework into alignment with the market risk framework.
Implications of financial market development for financial stability in emerging market economies
July 7, 2020--Note submitted to the G20 International Financial Architecture Working Group
Introduction
Over the past two decades, financial markets in emerging market economies (EMEs) have grown bigger, broader and more liquid. Their development has strengthened the financial system's overall resilience, not least by helping EMEs realise the benefits of capital flows while addressing the challenges associated with their volatility.
The expansion of local currency bond markets in particular has enabled governments to borrow in their own currency rather than foreign ones, thus reducing the currency mismatches that exacerbated earlier EME crises. That said, financial market development has altered rather than eliminated EMEs’ vulnerability to large swings in capital flows and exchange rates. The changed nature of EMEs' vulnerability was forcefully exposed in early 2020, when the Covid-19 outbreak sparked a global retreat from risk. Portfolio rebalancing by investors led to sharp currency depreciations, which amplified portfolio outflows and falls in EME asset prices.