Global ETF News Older than One Year
IMF-Emerging Market Volatility: Lessons from The Taper Tantrum
October 3, 2014-- Summary: Accommodative monetary policies in advanced economies have spurred increased capital inflows into emerging markets since the global financial crisis. Starting in May 2013, when the Federal Reserve publicly discussed its plans for tapering unconventional monetary policies, these emerging markets have experienced financial turbulence at the same that their domestic economic activity has slowed.
This paper examines their experiences and policy responses and draws broad policy lessons. For emerging markets, good macroeconomic fundamentals matter, and early and decisive measures to strengthen macroeconomic policies and reduce vulnerabilities help dampen market reactions to external shocks. For advanced economies, clear and effective communication about the exit from unconventional monetary policy can and did help later to reduce the risk of excessive market volatility. And for the global community, enhanced global cooperation, including a strong global financial safety net, offers emerging markets effective protection against excessive volatility.
view theIMF-Emerging Market Volatility: Lessons from The Taper Tantrum paper
Source: IMF
IOSCO Launches Second Securities Markets Risk Outlook
October 1. 2014--The International Organization of Securities Commissions (IOSCO) today published the IOSCO Securities Markets Risk Outlook 2014-2015. The Outlook is a forward-looking report focusing on identifying potential risks in securities markets.
The Outlook has been prepared during a transformative period for global financial markets. As the initial impact of the 2008 financial crisis recedes, securities markets are an increasingly important financing channel for the economy. At the same time, innovation is re-entering the markets, while accommodative monetary policies continue to bolster securities markets. Consequently, the identification and analysis of the build-up of systemic risk in securities markets is of growing significance.
view the IOSCO Securities Markets-Risk Outlook-2014-15
Source: IOSCO
Risk Taking, Liquidity, and Shadow Banking: Curbing Excess While Promoting Growth
October 1, 2014--The October 2014 Global Financial Stability Report (GFSR) finds that six years after the start of the crisis, the global economic recovery continues to rely heavily on accommodative monetary policies in advanced economies.
Monetary accommodation remains critical in supporting the economy by encouraging economic risk taking in the form of increased real spending by households and greater willingness to invest and hire by businesses.
Source: IMF
IMF Survey-Shadow Banking Is Boon, Bane for Financial System
October 1, 2014--Shadow banking differs between countries,shares same underlying drivers
Shadow banking contributes substantially to financial risks in United States,much less in Europe
Regulators should work together to avoid risks migrating
Shadow banking is both a boon and a bane for countries,and to reap its benefits,policymakers should minimize the risks it poses to the overall financial system.
Shadow banks act similarly to regular banks by taking money from investors and lending it to borrowers,but are not governed by the same rules or supervised. Shadow banks can include financial institutions such as money market mutual funds,hedge funds,finance companies,and broker/dealers,among others.
view the SHADOW BANKING AROUND THE GLOBE: HOW LARGE, AND HOW RISKY? report
Source: IMF
Emirates REIT to join FTSE Global Emerging Markets Index
October 1, 2014--Emirates REIT said on Wednesday it has been selected to join the FTSE EPRA/NAREIT Global Emerging Markets Index, becoming the fourth UAE company to join the index.
"Inclusion in the index will further support the development of the stock as investors buy the index constituents to build and run a rage of investment products," said Magali Mouquet, executive director of Emirates REIT Management.
Source: Zawya
World Economic Outlook (WEO), October 2014: Legacies, Clouds, Uncertainties- Analytical Chapters
September 30, 2014---Chapter 3: Is It Time for an Infrastructure Push? The Macroeconomic Effects of Public Investment
This chapter finds that increased public infrastructure investment raises output in both the short and long term, particularly during periods of economic slack and when investment efficiency is high.
This suggests that in countries with infrastructure needs, the time is right for an infrastructure push: borrowing costs are low and demand is weak in advanced economies, and there are infrastructure bottlenecks in many emerging market and developing economies. Debt-financed projects could have large output effects without increasing the debt-to-GDP ratio, if clearly identified infrastructure needs are met through efficient investment.
Source: IMF
What Does Carbon Pricing Success Look Like? Ask These Leaders
September 18, 2014--STORY HIGHLIGHTS
British Columbia, Sweden, California and China have been pioneering carbon pricing systems to lower emissions and help shift their economies onto cleaner, greener trajectories.
Currently, nearly 40 countries and more than 20 cities, states, and provinces use a form of carbon pricing or are planning to implement it. That number is growing as more governments explore the benefits of carbon pricing for climate and economy.
Vancouver is thriving. Across the coastal Canadian city, jobs are being created, fueled by a cleaner, greener economy. Low-carbon development projects are underway, and there is a shift toward neighborhood energy strategies that cut greenhouse gas emissions and make the energy supply more resilient to storms and overloads.
This didn’t happen by accident. Six year ago, the province of British Columbia took a bold step by establishing one of the continent’s first carbon taxes. Vancouver was already ahead on environmental standards, but the tax flipped a switch, clearly incentivizing resource efficiency and spurring greater innovation in energy, industry, and policy.
Source: World Bank
IMF Working paper-Growth Surprises and Synchronized Slowdowns in Emerging Markets--An Empirical Investigation
September 17, 2014--Summary: Output growth has slowed in several emerging markets since 2011-a remarkable feature for a non-crisis period in EMs. Such synchronized slowdowns were largely unanticipated by scholars and forecasters alike.
In this paper we attempt to shed light on the main drivers of growth surprises and synchronized slowdowns in emerging markets post-global financial crisis. We find that lower trading partner demand was a key external factor in explaining these events during 2011-13, and that changes in external financing conditions have yet to play a role in EMs’ growth. On the domestic front,the withdrawal of the fiscal stimulus put in place right after the Lehman collapse is a relevant aspect in these episodes,compounding the effect of the weaker external demand. Idiosyncratic factors,such as structural bottlenecks with the potential to impair growth in a more lasting fashion,also seem to partly explain these events,as reflected in the larger residuals found in regression-based estimates for certain countries.
Source: IMF
IMF Working paper-How Much Carbon Pricing is in Countries'Own Interests? The Critical Role of Co-Benefits
September 17, 2014--Summary: This paper calculates, for the top twenty emitting countries, how much pricing of carbon dioxide (CO2) emissions is in their own national interests due to domestic co-benefits (leaving aside the global climate benefits). On average, nationally efficient prices are substantial, $57.5 per ton of CO2 (for year 2010), reflecting primarily health co-benefits from reduced air pollution at coal plants and, in some cases, reductions in automobile externalities (net of fuel taxes/subsidies).
Pricing co-benefits reduces CO2 emissions from the top twenty emitters by 13.5 percent (a 10.8 percent reduction in global emissions). However, co-benefits vary dramatically across countries (e.g., with population exposure to pollution) and differentiated pricing of CO2 emissions therefore yields higher net benefits (by 23 percent) than uniform pricing. Importantly, the efficiency case for pricing carbon’s co-benefits hinges critically on (i) weak prospects for internalizing other externalities through other pricing instruments and (ii) productive use of carbon pricing revenues.
Source: IMF
IMF Working paper-A Quality of Growth Index for Developing Countries: A Proposal
September 17, 2014--Summary: This paper proposes a new quality of growth index (QGI) for developing countries. The index encompasses both the intrinsic nature and social dimensions of growth, and is computed for over 90 countries for the period 1990-2011. The approach is premised on the fact that not all growth is created equal in terms of social outcomes, and that it does matter how one reaches from one level of income to another for various theoretical and empirical reasons.
The paper finds that the quality of growth has been improving in the vast majority of developing countries over the past two decades, although the rate of convergence is relatively slow. At the same time, there are considerable cross-country variations across income levels and regions. Finally, emprirical investigations point to the fact that main factors of the quality of growth are political stability, public pro-poor spending, macroeconomic stability, financial development, institutional quality and external factors such as FDI.
view IMF Working paper-A Quality of Growth Index for Developing Countries: A Proposal
Source: IMF
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