Global ETF News Older than One Year
Basel Committee proposes amendment to capital rules for non-performing loan securitisations
June 23, 2020--Proposal sets out a prudent treatment for securitisations of non-performing loans with a risk weight floor of 100% for these exposures
Proposal addresses a gap in the regulatory framework and was being developed before Covid-19
Comments on this technical amendment welcome until 23 August.
The Basel Committee on Banking Supervision published today the technical amendment Capital treatment of securitisations of non-performing loans. This proposal, which the Committee started developing before the onset of the Covid-19 pandemic, addresses a gap in the regulatory framework and sets out a prudent treatment for securitisations of non-performing loans.
The technical amendment establishes a 100% risk weight for certain senior tranches of non-performing loan securitisations.
Source: BIS
Impact of the coronavirus pandemic on the global economy-Statistics & Facts
June 22, 2020--While there is no way to tell exactly what the economic damage from the global COVID-19 novel coronavirus pandemic will be, there is widespread agreement among economists that it will have severe negative impacts on the global economy. Early estimates predicated that, should the virus become a global pandemic, most major economies will lose at least 2.4 percent of the value their gross domestic product (GDP) over 2020, leading economists to already reduce their 2020 forecasts of global economic growth down from around 3.0 percent to 2.4 percent.
To put this number in perspective, global GDP was estimated at around 86.6 trillion U.S. dollars in 2019 – meaning that just a 0.4 percent drop in economic growth amounts to almost 3.5 trillion U.S. dollars in lost economic output. However, these predictions were made prior to COVID-19 becoming a global pandemic, and before the implementation of widespread restrictions on social contact to stop the spread of the virus.
Source: statista.com
Global Wealth 2020: The Future of Wealth Management-A CEO Agenda
June 20, 2020--The wealth management industry is over 200 years old. Yet for most of that history, providers have operated according to the same general playbook.
It took the massive digital and regulatory disruption of the past 20 years to begin shaking up industry business models, and evidence suggests that most providers have moved slowly, with many still adhering to traditional ways of private banking.
Source: bcg.com
How the Coronavirus Will Reshape World Trade
June 19, 2020--In the post-pandemic world, more economic activity will be designated vital to national security, accelerating pressures on globalization
When the global economy finally gets beyond the pandemic, expect it to be less globalized than before.
Governments, including many longtime advocates of global trade, are using the crisis to erect barriers to commerce and bring manufacturing home. Japan now pays companies to relocate factories from China. French President Emmanuel Macron pledges "full independence" in crucial medical supplies by year-end. In Washington, Republicans and Democrats alike back new "Buy American" requirements for government health spending.
Source: wsj.com
Trade credit, trade finance, and the Covid-19 Crisis
June 19, 2020--June 19, 2020--Key takeaways
As the Covid-19 pandemic hits economic activity, the vulnerabilities of longer and more geographically extended trade credit chains are coming to the fore, especially those related to international trade.
While risk mitigation is available from financial intermediaries, the bulk of the exposures associated with supply chains is borne by the participating firms themselves, through inter-firm credit.
Given the prevalence of the US dollar in trade financing, measures such as central bank swap lines that ease global dollar credit conditions may cushion the impact of the pandemic on global value chains.
Source: BIS
US dollar still dominates international funding markets
June 18, 2020--Dollar remains the pre-eminent international funding currency even as market structure shifts
To preserve the benefits of this shift, the strength of the intermediation chain must be ensured
Better data collection needed to improve assessment and stronger regulation could mitigate risks.
The US dollar remains the pre-eminent international funding currency, even amid significant shifts in market structure, according to a new report by the Committee on the Global Financial System.
US dollar funding: an international perspective finds that US dollar funding is below its peak of a decade ago relative to the size of the global economy, although the US dollar's share of international funding has returned to the dominant position it held around the turn of the century. The widespread use of the US dollar has benefited participants, but the resulting interconnectedness of the market can also create vulnerabilities.
Source: BIS
HSBC Revives Plan To Cut 35,000 Jobs After Coronavirus Pause
June 17, 2020--In March, HSBC had postponed the job cuts, part of a wider restructuring to cut $4.5 billion in costs
HSBC is resuming plans to cut around 35,000 jobs which it put on ice after the coronavirus outbreak, as Europe's biggest bank grapples with the impact on its already falling profits.
It will also maintain a freeze on almost all external hiring, chief executive Noel Quinn said in a memo sent to HSBC's 235,000 staff worldwide on Wednesday and seen by Reuters.
Source: ndtv.com
Climate-related passive funds fail to win over top pension plans
June 17, 2020--More than half of the world's largest pension schemes have made no allocation to climate-related passive funds in spite of mounting pressure on institutional investors to step up the fight against global warming.
Urgent action is required by companies and investors worldwide to prevent catastrophic...
Source: FT.com
The IEA warns global oil demand will drop by $324 million a day in 2020, the biggest decline in history, before a rapid rebound in 2021
June 16, 2020--The International Energy Agency, in its closely-watched oil market report, predicted that global oil demand will drop by 8.1 million barrels a day this year, the biggest decline in history.
Demand is expected to rebound by a record 5.7 million barrels a day in 2021, IEA said.
The agency adjusted its previous forecast of global Brent demand falling by 9.1 million barrels a day as better-than-expected deliveries took place amid easing lockdowns.
Source: businessinsider.com
Hedging in a time of crisis
June 16, 2020--Hedge funds have traditionally been sceptical about their ability to embrace responsible investment practices. However, since the 2008 financial crisis, when hedge funds played an important role as providers of liquidity, with strategies focused on private or distressed debt or event-driven and special situations, helping to restructure and rescue companies, the importance of investing sustainably is now more firmly on their radar, with many strengthening their governance structures in the face of increased scrutiny from regulators.
The hedge fund industry is also at the forefront of data sourcing, using new sources of alternative unstructured data derived from artificial intelligence, in a bid to generate new insights before competitors. This applies across all data sourcing, using ESG-specific data as well as data in more standard areas.
Source: responsible-investor.com
