The document discusses four options to address stock and flow imbalances in the eurozone: 1) restoring growth and competitiveness through monetary easing and fiscal policies while implementing austerity and reforms; 2) a deflationary adjustment along with structural reforms; 3) the core permanently subsidizing the periphery through debt reduction and transfers; 4) widespread debt restructuring/reductions and a potential breakup of the eurozone. It analyzes these options in the context of three scenarios for the eurozone and argues that pursuing austerity and deflation alone risks prolonged recession and a potential breakup of the eurozone.
This document provides an overview of PIMCO's investment outlook and perspectives from its December 2011 Cyclical Forum. It discusses the firm's process for developing global economic and market views through forums that analyze secular and cyclical factors. The summary then outlines PIMCO's expectations for slow global and US economic growth in 2012 due to challenges from the eurozone crisis, with real GDP growth forecasts of 1-1.5% and 0-1%, respectively. Distressed European banks reducing foreign loans is also cited as a risk to the global economy.
This global economic outlook gives Dun & Bradstreet's perspective on global business conditions. Based on its proprietary data and analytic insight, the outlook reviews business conditions for 2012 and gives insight on what to expect for 2013.
The document summarizes the recommendations of six Shadow Financial Regulatory Committees on addressing the Eurozone crisis. It recommends a four-stage plan: 1) restructuring Greek debt to a sustainable level while protecting other countries, 2) ensuring banks are adequately capitalized, 3) providing sufficient funding from coordinated international sources to eliminate sovereign debt uncertainty, and 4) addressing long-term competitiveness issues between northern and southern Eurozone countries. It also calls for fundamental changes to international bank regulation standards.
The document discusses current economic and social challenges facing the financial sector, including lack of confidence, stalled economic growth, and new regulatory requirements. It argues that restoring confidence, promoting higher growth through responsible economic policies and citizen behavior, increasing capital reserves to meet new rules, and stronger fiscal and political integration in Europe could help address these challenges. Individuals should contribute through developing strong ethical values and entrepreneurial thinking. Working in investment management could provide opportunities to help reshape the financial industry.
1. The document outlines 4 alternative strategies for exiting the Greek economic crisis: 1) remaining in the EU and implementing austerity programs, 2) remaining in the EU but renegotiating austerity programs, 3) exiting the Eurozone but remaining in the EU, and 4) fully disengaging from the EU.
2. It argues that a Marxist structural explanation of the crisis sees its fundamental causes in problems of production and imperialist exploitation within the EU.
3. A full disengagement from the EU offers the only coherent strategy that can radically restructure Greece's economy in a way that benefits workers.
A minimal moral hazard central stabilization capacity for the EMU based on wo...ADEMU_Project
This document proposes an "export-based stabilisation capacity" (ESC) for the Eurozone that allows for cross-border transfers in response to changes in world trade across different sectors. The ESC would provide transfers from countries less affected by a decline in world trade in a given sector to countries more dependent on that sector. This is intended to cushion economic shocks while avoiding moral hazard concerns since the transfers are based on exogenous world trade factors. A simulation using historical export data finds the transfers would be countercyclical and stabilize over time, suggesting the risk of permanent transfers is low. However, timely availability of sectoral trade data could pose practical challenges to implementation.
This document discusses debt relief initiatives in Sub-Saharan Africa, specifically the HIPC and MDRI programs. It provides context on the high levels of debt in SSA countries and the goals of debt relief to reduce debt burdens and spur growth. The initiatives are described as evolving over time to provide more complete debt cancellation through HIPC II/MDRI. However, the effectiveness of debt relief is questioned as structural economic constraints in SSA were not addressed, and debt levels often rose again. As an example, outcomes for Niger show only short-term growth effects from debt relief with poverty continuing to increase long-term.
The low interest rate environment – Causes, effects and a way outI W
The document discusses the causes and effects of the long period of low interest rates in Europe following the global financial crisis and Euro debt crisis. It notes that while the ECB's expansive monetary policy helped reduce tensions, the low rate environment poses increasing risks. Savers are disadvantaged by low yields, while debtors benefit. There are also financial stability risks as investors search for higher yields. The document argues that economic conditions have improved, making an interest rate turnaround possible in mid-2015, but the ECB should implement any rate increases gradually to allow markets to adapt.
This document provides an overview of PIMCO's investment outlook and perspectives from its December 2011 Cyclical Forum. It discusses the firm's process for developing global economic and market views through forums that analyze secular and cyclical factors. The summary then outlines PIMCO's expectations for slow global and US economic growth in 2012 due to challenges from the eurozone crisis, with real GDP growth forecasts of 1-1.5% and 0-1%, respectively. Distressed European banks reducing foreign loans is also cited as a risk to the global economy.
This global economic outlook gives Dun & Bradstreet's perspective on global business conditions. Based on its proprietary data and analytic insight, the outlook reviews business conditions for 2012 and gives insight on what to expect for 2013.
The document summarizes the recommendations of six Shadow Financial Regulatory Committees on addressing the Eurozone crisis. It recommends a four-stage plan: 1) restructuring Greek debt to a sustainable level while protecting other countries, 2) ensuring banks are adequately capitalized, 3) providing sufficient funding from coordinated international sources to eliminate sovereign debt uncertainty, and 4) addressing long-term competitiveness issues between northern and southern Eurozone countries. It also calls for fundamental changes to international bank regulation standards.
The document discusses current economic and social challenges facing the financial sector, including lack of confidence, stalled economic growth, and new regulatory requirements. It argues that restoring confidence, promoting higher growth through responsible economic policies and citizen behavior, increasing capital reserves to meet new rules, and stronger fiscal and political integration in Europe could help address these challenges. Individuals should contribute through developing strong ethical values and entrepreneurial thinking. Working in investment management could provide opportunities to help reshape the financial industry.
1. The document outlines 4 alternative strategies for exiting the Greek economic crisis: 1) remaining in the EU and implementing austerity programs, 2) remaining in the EU but renegotiating austerity programs, 3) exiting the Eurozone but remaining in the EU, and 4) fully disengaging from the EU.
2. It argues that a Marxist structural explanation of the crisis sees its fundamental causes in problems of production and imperialist exploitation within the EU.
3. A full disengagement from the EU offers the only coherent strategy that can radically restructure Greece's economy in a way that benefits workers.
A minimal moral hazard central stabilization capacity for the EMU based on wo...ADEMU_Project
This document proposes an "export-based stabilisation capacity" (ESC) for the Eurozone that allows for cross-border transfers in response to changes in world trade across different sectors. The ESC would provide transfers from countries less affected by a decline in world trade in a given sector to countries more dependent on that sector. This is intended to cushion economic shocks while avoiding moral hazard concerns since the transfers are based on exogenous world trade factors. A simulation using historical export data finds the transfers would be countercyclical and stabilize over time, suggesting the risk of permanent transfers is low. However, timely availability of sectoral trade data could pose practical challenges to implementation.
This document discusses debt relief initiatives in Sub-Saharan Africa, specifically the HIPC and MDRI programs. It provides context on the high levels of debt in SSA countries and the goals of debt relief to reduce debt burdens and spur growth. The initiatives are described as evolving over time to provide more complete debt cancellation through HIPC II/MDRI. However, the effectiveness of debt relief is questioned as structural economic constraints in SSA were not addressed, and debt levels often rose again. As an example, outcomes for Niger show only short-term growth effects from debt relief with poverty continuing to increase long-term.
The low interest rate environment – Causes, effects and a way outI W
The document discusses the causes and effects of the long period of low interest rates in Europe following the global financial crisis and Euro debt crisis. It notes that while the ECB's expansive monetary policy helped reduce tensions, the low rate environment poses increasing risks. Savers are disadvantaged by low yields, while debtors benefit. There are also financial stability risks as investors search for higher yields. The document argues that economic conditions have improved, making an interest rate turnaround possible in mid-2015, but the ECB should implement any rate increases gradually to allow markets to adapt.
The very expansive and unconventional monetary policy of the ECB reduced the tensions of the Euro debt crisis at the price of persistently very low interest rates.
While the ECB was right to act at the peak of the crisis, the risks of the low-interest rate environment become increasingly obvious. Private savings suffer from very low
yields, which is particularly detrimental for long-term retirement savings. Moreover, financial stability risks could arise, as ultra-low interest rates can cause a search for
yield among investors. Banks and life insurance companies are exposed to reduced interest profits respectively lower yields. While life insurance companies can cope with a shorter period of low interest rates, a longer period, however, poses challenges, as contracts with guaranteed interest rates have to be served.
Bank of England - International Monetary Systemsmontgold
This document summarizes a paper that examines reforms to the international monetary and financial system (IMFS). It begins with an overview of different IMFS regimes throughout history, including the Gold Standard and Bretton Woods System, noting they placed different emphasis on objectives like internal balance, allocative efficiency, and financial stability. The paper then assesses today's IMFS, finding it has performed poorly against these objectives. It identifies key frictions in the global economy that allow imbalances to build, such as nominal rigidities, missing markets, imperfect information. The paper proposes reforms countries can implement independently as well as initiatives requiring international cooperation to address these frictions.
INTERNATIONAL MONETARY FUND
Abstract
The U.S. financial and economic crisis has had severe global repercussions. The run-up to the crisis involved a substantial and widespread underestimation of risks—especially in housing—and growing leverage and liquidity mismatches, in particular through off-balance-sheet vehicles and non-bank entities in less-regulated areas. Against a backdrop of easy global financial conditions, this dynamic fed an unsustainable buildup of financial imbalances, above all in housing markets. The sharp decline in housing prices that started in 2007 weakened several systemically important financial institutions, culminating in the collapse of Lehman Brothers, and revealing major weaknesses in the U.S. regulatory and resolution frameworks. This was followed by the worst global financial panic since the Great Depression, with extreme strains in a broad range of markets, volatility in capital flows and exchange rates, and a cascade of systemic events. Economic activity collapsed globally, with trade contracting sharply and advanced economies as a group registering the steepest decline in production in the postwar period. Emerging markets economies also experienced intense pressure, amid retrenching trade and tighter international financing conditions.
I. Overview ; Outlook and Risks
1. Recent data suggest that the sharp fall in output may now be ending, although economic activity remains weak. Economic indicators point to a decelerating rate of deterioration, particularly in labor and housing markets, both of which are key to economic recovery and financial stability. In tandem, financial conditions have noticeably improved, with narrowing interest-rate spreads and growing confidence in financial stability in the wake of measures deployed by the Administration, the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve. That said, both financial and economic indicators remain at stressed or weak levels by historical standards.
2. 4. The staff's outlook remains for a gradual recovery, consistent with past international experience of financial and housing market crises. The combination of financial strains and ongoing adjustments in the housing and labor markets is expected to restrain growth for some time, with a solid recovery projected to emerge only in mid-2010. Against this background, GDP is expected to contract by 2½ percent in 2009, followed by a modest ¾ percent expansion in 2010 on a year-average basis (on a Q4-over-Q4 basis, -1 ½ percent in 2009 and 1 ¾ percent in 2010). Meanwhile, growing economic slack—with unemployment peaking at close to 10 percent in 2010—would push core inflation to very low levels, with the headline CPI expected to decrease by ½ percent in 2009 and increase by 1 percent in 2010. rates, on concerns about fiscal sustainability; and rising corporate distress. Much will also depend on developments abroad, including progress made in strengthening financial institutions and markets.
II. Near-term stabilization
1. Macroeconomic policies are providing welcome support to demand. The fiscal stimulus—well targeted, timely, diversified, and sizeable—is projected to boost annual GDP growth by 1 percent in 2009 and ¼ percent in 2010. This is being appropriately complemented by a highly expansionary monetary stance and “credit easing” measures that are also relieving financial strains. Continued clear communication on the near-term outlook will be essential to anchor inflation expectations, given the prevailing uncertainty. If activity proves weaker than expected, the Fed could undertake additional credit easing, and further strengthen its commitment to maintain a highly accommodative stance. If necessary, additional fiscal stimulus could also be considered, focused on fast-acting measures, although this would need to be complemented by a concomitantly stronger medium-term adjustment.
2. Steps to s
Market Outlook - Financial Crisis & PolicyJayson Kim
1) A fundamental cause of the current financial crisis was a change in the banking business model that mixed credit and equity cultures. When this new model was combined with complex interactions from macro policies, regulations, taxation, and corporate governance changes, it resulted in the crisis.
2) Four key events in 2004 contributed to banks accelerating off-balance sheet mortgage securitization: 1) new US mortgage proposals, 2) increased regulation of Fannie Mae and Freddie Mac, 3) publication of the Basel II accord, and 4) changes to SEC regulation of investment banks.
3) One bank, Citi, is used as an example of how the transition from Basel I to Basel II created an arbitrage opportunity for
The report highlights the urgent
challenges arising from the world financial and economic crisis and its aftermath, in
particular in the key areas of financial regulation and supervision, multilateral
surveillance, macroeconomic policy coordination, sovereign debt, a global financial
safety net, the international reserve system and governance reform of the Bretton
Woods institutions.
The document summarizes the key challenges facing the global and Latin American economies in 2012. Globally, growth is slowing in developed nations while emerging economies are seeing faster but also declining growth. The economic and political power is shifting from North to South and West to East as China and Asia grow in influence. Current global governance does not reflect this new reality. Latin America has progressed socially and macroeconomically but must address gaps in inequality, investment, productivity and taxation to achieve sustainable development.
1) The recent global financial crisis demonstrated that the financial sector can impose significant costs on the broader economy through risky behavior like excessive leverage and reliance on short-term funding.
2) Many European governments have introduced taxes on the financial sector to recover costs from bailing out the sector during the crisis. Proponents argue these taxes can reduce risky behavior and make the sector bear the social costs it imposes.
3) Potential financial sector taxes being considered include taxes on an institution's balance sheet size, volatile wholesale funding sources, and high-frequency trading to encourage more stable funding and reduce financial system risks.
Whether the ongoing, acute Euro crisis results in a stabilized Euro, a contracted Euro or total disintegration, banking and financial services (BFS) companies must prepare their operational and IT systems to accommodate any resulting changes and limit revenue losses. We offer a remediation plan to prepare for these potentially disruptive changes that could affect systems and processes such as risk management, legal and compliance, cash and liquidity management, reporting, settlement and clearing, post-trade services, channel access, trade execution and management and many more.
Leszek Balcerowicz. Euro: problems and solutionsEesti Pank
This document summarizes a presentation on problems and solutions related to the Euro. It discusses economic growth in the EU from 2008-2013, reasons for deep recessions in some Eurozone countries including financial and fiscal crises, policy responses and their impact on GDP growth, issues related to the Eurozone crisis, and necessary solutions. The presentation contains graphs and tables displaying economic indicators for various countries.
The IEO recently completed an evaluation of the IMF's involvement in international trade policy issues from 1996-2007. The evaluation found that the IMF's role swung from being too interventionist in the late 1990s through conditionality to being too reluctant to provide input on trade policies with macroeconomic importance in recent years. The evaluation calls on the IMF to play a stronger advisory role on trade issues and focus more on preferential trade agreements and trade in financial services. The IEO also discussed the Governance of the IMF report with the Executive Board in FY2009 and follow-up on the evaluation of structural conditionality.
The document discusses four potential policy options to address the ongoing economic challenges: monetary policy, fiscal policy, regulatory policy changes, and waiting for the deleveraging process to run its course. Monetary policy could increase inflation to reduce debt burdens, but also carries risks of runaway inflation. Fiscal stimulus through spending and tax cuts could boost incomes, but impact may be delayed and increase deficits. Targeted debt relief programs could directly reduce household debt levels with less deficit impact compared to broad stimulus. Regulatory reforms may have limited short-term effect. Simply waiting risks prolonged high unemployment and possible deflation.
The document discusses the threat of economic stagnation in Western countries and the challenges of austerity. It argues that while austerity measures may seem moderate from a regional perspective, they have profoundly negative effects on individual crisis-struck countries. Stimulus packages implemented in response to the financial crisis should have been combined with structural reforms. Different types of recessions require different policy responses - balance sheet recessions like in the US need continued fiscal support, while Southern European crises stem more from structural issues and require fiscal consolidation paired with reforms.
Macroeconomic Developments in Low-Income Developing CountriesDr Lendy Spires
The IMF staff paper examines macroeconomic developments in low-income developing countries (LIDCs) between 2000-2014. It finds that while most LIDCs experienced strong economic growth, it was primarily driven by factor accumulation rather than productivity. About half of LIDCs are assessed as medium to highly vulnerable to external shocks, with weakened fiscal positions being a key vulnerability. Looking ahead, LIDCs face economic headwinds from slow growth in advanced economies. To strengthen resilience, policy actions to rebuild fiscal buffers and strengthen debt management are priorities.
No exemption the_ftt_and_pensions_fundsManfredNolte
The document argues that pension funds should not be exempted from the proposed Financial Transaction Tax (FTT) being implemented in Europe. It makes three key points:
1. The FTT will have a minimal impact on pension funds as they are typically long-term investors, so the small tax applied at entry and exit from markets will be negligible for them. In contrast, it will significantly impact high-frequency traders.
2. Exempting pension funds could reduce the effectiveness and revenue from the FTT, as financial institutions may find ways to exploit any exemptions.
3. Other costs already faced by pension funds, such as high fund management fees, are a much greater drag on returns than the
No exemption the_ftt_and_pensions_fundsManfredNolte
1) Pension funds should not be exempted from the proposed Financial Transaction Tax (FTT) being implemented by 11 European countries. Exemptions could allow pension funds to avoid the tax through various means, reducing its effectiveness and revenue.
2) Historically, pension funds have favored low-turnover, long-term investment strategies that would not be significantly impacted by a modest 0.1% FTT. While some funds now have higher turnover, a FTT levied on market entries and exits would have a minimal effect on returns.
3) Most European retiree incomes come from public pension systems funded by taxes, not capital markets, so they would not be affected by a FTT. Only
Dr. Michael Hasenstab provides an analysis of factors that will differentiate the recoveries of various countries from the global economic crisis. He believes emerging markets will recover more quickly than developed markets due to emerging markets' stronger domestic economies and less reliance on exports, more effective policy responses, and avoidance of issues like high public debt and private sector leverage plaguing developed nations. Recent economic trends support this view, with emerging markets showing stronger growth, job creation, and capital inflows. Hasenstab also discusses opportunities in foreign exchange and bond markets stemming from divergence in recoveries.
- After positive returns in the first three quarters of 2011, global markets saw negative returns in the second quarter due to normal volatility, though prospects for economic recession remain remote.
- While economic growth has slowed globally, it is still positive and temporary factors like disruptions from Japan's disasters and commodity price rises have contributed; leading indicators remain positive.
- European sovereign debt issues continue regarding some countries' debt levels and management, but efforts to address problems have been taken and debt is still seen as manageable.
- Outlook remains positive for continued growth in the second half of 2011 and beyond, though expect continued short-term market volatility; long-term discipline and diversification are recommended.
This paper investigates the barriers to innovation perceived by Polish manufacturing firms. It refers to the heterogeneity of innovation active firms. We introduce a taxonomy of innovative firms based on the frequency with which they introduce commercialised innovations using data from both CIS4 (for 2002-2004) and CIS5 (2004-2006). Two groups of innovation-active firms are distinguished: those which introduced innovation in both periods covered by both CIS (which we call persistent innovators) and those which introduced innovation either in CIS4 or CIS5 (which we call occasional innovators). We use a four step analysis covering binary correlations, Principal Component Analysis, probit model and correlations of disturbances. Two types of explanatory variables describing firms’ characteristics and innovation inputs used are considered. The paper shows that there are considerable differences in sensitivities to the perception of innovation barriers and in complementarities among barriers between persistent and occasional innovators. In the case of occasional innovators, a kind of innovation barrier chain is observed. This has an impact on differences in the frequency of innovation activities between the two groups of innovators and results in a diversification of innovators.
Authored by: Ewa Balcerowicz, Marek Pęczkowski, Anna Wziatek-Kubiak
Published in 2011
2009 T H E F U T U R E O F T H E G L O B A L F I N A N C I A L S Y S T...Madrid Network
The report explores how the global financial system may evolve over the near-term and long-term by examining recent macroeconomic shifts and presenting four potential long-term scenarios. In the near-term outlook, it finds that financial institutions are adapting to tighter credit, slower growth and increased regulation. Alternatives players have suffered but some may gain from deleveraging. Insurers' fortunes differ by region and line of business, with some able to capitalize on new opportunities. The long-term scenarios presented are financial regionalism, re-engineered Western-centrism, fragmented protectionism, and rebalanced multilateralism.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Eurorient ron nechemia at the epicenter where the financial system meets the ...EurOrientF
The document summarizes an interview with Mr. Ron Nechemia, Chairman of EurOrient Financial Group, regarding the global financial crisis. In the interview, Mr. Nechemia accurately predicted the financial crisis and its impacts. He warns that strains on the global financial system will deepen the economic downturn. He calls for comprehensive reform of regulatory frameworks and new liquidity instruments to support developing countries. Mr. Nechemia emphasizes the need for a holistic approach and global cooperation to address interconnected challenges through this crisis.
The very expansive and unconventional monetary policy of the ECB reduced the tensions of the Euro debt crisis at the price of persistently very low interest rates.
While the ECB was right to act at the peak of the crisis, the risks of the low-interest rate environment become increasingly obvious. Private savings suffer from very low
yields, which is particularly detrimental for long-term retirement savings. Moreover, financial stability risks could arise, as ultra-low interest rates can cause a search for
yield among investors. Banks and life insurance companies are exposed to reduced interest profits respectively lower yields. While life insurance companies can cope with a shorter period of low interest rates, a longer period, however, poses challenges, as contracts with guaranteed interest rates have to be served.
Bank of England - International Monetary Systemsmontgold
This document summarizes a paper that examines reforms to the international monetary and financial system (IMFS). It begins with an overview of different IMFS regimes throughout history, including the Gold Standard and Bretton Woods System, noting they placed different emphasis on objectives like internal balance, allocative efficiency, and financial stability. The paper then assesses today's IMFS, finding it has performed poorly against these objectives. It identifies key frictions in the global economy that allow imbalances to build, such as nominal rigidities, missing markets, imperfect information. The paper proposes reforms countries can implement independently as well as initiatives requiring international cooperation to address these frictions.
INTERNATIONAL MONETARY FUND
Abstract
The U.S. financial and economic crisis has had severe global repercussions. The run-up to the crisis involved a substantial and widespread underestimation of risks—especially in housing—and growing leverage and liquidity mismatches, in particular through off-balance-sheet vehicles and non-bank entities in less-regulated areas. Against a backdrop of easy global financial conditions, this dynamic fed an unsustainable buildup of financial imbalances, above all in housing markets. The sharp decline in housing prices that started in 2007 weakened several systemically important financial institutions, culminating in the collapse of Lehman Brothers, and revealing major weaknesses in the U.S. regulatory and resolution frameworks. This was followed by the worst global financial panic since the Great Depression, with extreme strains in a broad range of markets, volatility in capital flows and exchange rates, and a cascade of systemic events. Economic activity collapsed globally, with trade contracting sharply and advanced economies as a group registering the steepest decline in production in the postwar period. Emerging markets economies also experienced intense pressure, amid retrenching trade and tighter international financing conditions.
I. Overview ; Outlook and Risks
1. Recent data suggest that the sharp fall in output may now be ending, although economic activity remains weak. Economic indicators point to a decelerating rate of deterioration, particularly in labor and housing markets, both of which are key to economic recovery and financial stability. In tandem, financial conditions have noticeably improved, with narrowing interest-rate spreads and growing confidence in financial stability in the wake of measures deployed by the Administration, the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve. That said, both financial and economic indicators remain at stressed or weak levels by historical standards.
2. 4. The staff's outlook remains for a gradual recovery, consistent with past international experience of financial and housing market crises. The combination of financial strains and ongoing adjustments in the housing and labor markets is expected to restrain growth for some time, with a solid recovery projected to emerge only in mid-2010. Against this background, GDP is expected to contract by 2½ percent in 2009, followed by a modest ¾ percent expansion in 2010 on a year-average basis (on a Q4-over-Q4 basis, -1 ½ percent in 2009 and 1 ¾ percent in 2010). Meanwhile, growing economic slack—with unemployment peaking at close to 10 percent in 2010—would push core inflation to very low levels, with the headline CPI expected to decrease by ½ percent in 2009 and increase by 1 percent in 2010. rates, on concerns about fiscal sustainability; and rising corporate distress. Much will also depend on developments abroad, including progress made in strengthening financial institutions and markets.
II. Near-term stabilization
1. Macroeconomic policies are providing welcome support to demand. The fiscal stimulus—well targeted, timely, diversified, and sizeable—is projected to boost annual GDP growth by 1 percent in 2009 and ¼ percent in 2010. This is being appropriately complemented by a highly expansionary monetary stance and “credit easing” measures that are also relieving financial strains. Continued clear communication on the near-term outlook will be essential to anchor inflation expectations, given the prevailing uncertainty. If activity proves weaker than expected, the Fed could undertake additional credit easing, and further strengthen its commitment to maintain a highly accommodative stance. If necessary, additional fiscal stimulus could also be considered, focused on fast-acting measures, although this would need to be complemented by a concomitantly stronger medium-term adjustment.
2. Steps to s
Market Outlook - Financial Crisis & PolicyJayson Kim
1) A fundamental cause of the current financial crisis was a change in the banking business model that mixed credit and equity cultures. When this new model was combined with complex interactions from macro policies, regulations, taxation, and corporate governance changes, it resulted in the crisis.
2) Four key events in 2004 contributed to banks accelerating off-balance sheet mortgage securitization: 1) new US mortgage proposals, 2) increased regulation of Fannie Mae and Freddie Mac, 3) publication of the Basel II accord, and 4) changes to SEC regulation of investment banks.
3) One bank, Citi, is used as an example of how the transition from Basel I to Basel II created an arbitrage opportunity for
The report highlights the urgent
challenges arising from the world financial and economic crisis and its aftermath, in
particular in the key areas of financial regulation and supervision, multilateral
surveillance, macroeconomic policy coordination, sovereign debt, a global financial
safety net, the international reserve system and governance reform of the Bretton
Woods institutions.
The document summarizes the key challenges facing the global and Latin American economies in 2012. Globally, growth is slowing in developed nations while emerging economies are seeing faster but also declining growth. The economic and political power is shifting from North to South and West to East as China and Asia grow in influence. Current global governance does not reflect this new reality. Latin America has progressed socially and macroeconomically but must address gaps in inequality, investment, productivity and taxation to achieve sustainable development.
1) The recent global financial crisis demonstrated that the financial sector can impose significant costs on the broader economy through risky behavior like excessive leverage and reliance on short-term funding.
2) Many European governments have introduced taxes on the financial sector to recover costs from bailing out the sector during the crisis. Proponents argue these taxes can reduce risky behavior and make the sector bear the social costs it imposes.
3) Potential financial sector taxes being considered include taxes on an institution's balance sheet size, volatile wholesale funding sources, and high-frequency trading to encourage more stable funding and reduce financial system risks.
Whether the ongoing, acute Euro crisis results in a stabilized Euro, a contracted Euro or total disintegration, banking and financial services (BFS) companies must prepare their operational and IT systems to accommodate any resulting changes and limit revenue losses. We offer a remediation plan to prepare for these potentially disruptive changes that could affect systems and processes such as risk management, legal and compliance, cash and liquidity management, reporting, settlement and clearing, post-trade services, channel access, trade execution and management and many more.
Leszek Balcerowicz. Euro: problems and solutionsEesti Pank
This document summarizes a presentation on problems and solutions related to the Euro. It discusses economic growth in the EU from 2008-2013, reasons for deep recessions in some Eurozone countries including financial and fiscal crises, policy responses and their impact on GDP growth, issues related to the Eurozone crisis, and necessary solutions. The presentation contains graphs and tables displaying economic indicators for various countries.
The IEO recently completed an evaluation of the IMF's involvement in international trade policy issues from 1996-2007. The evaluation found that the IMF's role swung from being too interventionist in the late 1990s through conditionality to being too reluctant to provide input on trade policies with macroeconomic importance in recent years. The evaluation calls on the IMF to play a stronger advisory role on trade issues and focus more on preferential trade agreements and trade in financial services. The IEO also discussed the Governance of the IMF report with the Executive Board in FY2009 and follow-up on the evaluation of structural conditionality.
The document discusses four potential policy options to address the ongoing economic challenges: monetary policy, fiscal policy, regulatory policy changes, and waiting for the deleveraging process to run its course. Monetary policy could increase inflation to reduce debt burdens, but also carries risks of runaway inflation. Fiscal stimulus through spending and tax cuts could boost incomes, but impact may be delayed and increase deficits. Targeted debt relief programs could directly reduce household debt levels with less deficit impact compared to broad stimulus. Regulatory reforms may have limited short-term effect. Simply waiting risks prolonged high unemployment and possible deflation.
The document discusses the threat of economic stagnation in Western countries and the challenges of austerity. It argues that while austerity measures may seem moderate from a regional perspective, they have profoundly negative effects on individual crisis-struck countries. Stimulus packages implemented in response to the financial crisis should have been combined with structural reforms. Different types of recessions require different policy responses - balance sheet recessions like in the US need continued fiscal support, while Southern European crises stem more from structural issues and require fiscal consolidation paired with reforms.
Macroeconomic Developments in Low-Income Developing CountriesDr Lendy Spires
The IMF staff paper examines macroeconomic developments in low-income developing countries (LIDCs) between 2000-2014. It finds that while most LIDCs experienced strong economic growth, it was primarily driven by factor accumulation rather than productivity. About half of LIDCs are assessed as medium to highly vulnerable to external shocks, with weakened fiscal positions being a key vulnerability. Looking ahead, LIDCs face economic headwinds from slow growth in advanced economies. To strengthen resilience, policy actions to rebuild fiscal buffers and strengthen debt management are priorities.
No exemption the_ftt_and_pensions_fundsManfredNolte
The document argues that pension funds should not be exempted from the proposed Financial Transaction Tax (FTT) being implemented in Europe. It makes three key points:
1. The FTT will have a minimal impact on pension funds as they are typically long-term investors, so the small tax applied at entry and exit from markets will be negligible for them. In contrast, it will significantly impact high-frequency traders.
2. Exempting pension funds could reduce the effectiveness and revenue from the FTT, as financial institutions may find ways to exploit any exemptions.
3. Other costs already faced by pension funds, such as high fund management fees, are a much greater drag on returns than the
No exemption the_ftt_and_pensions_fundsManfredNolte
1) Pension funds should not be exempted from the proposed Financial Transaction Tax (FTT) being implemented by 11 European countries. Exemptions could allow pension funds to avoid the tax through various means, reducing its effectiveness and revenue.
2) Historically, pension funds have favored low-turnover, long-term investment strategies that would not be significantly impacted by a modest 0.1% FTT. While some funds now have higher turnover, a FTT levied on market entries and exits would have a minimal effect on returns.
3) Most European retiree incomes come from public pension systems funded by taxes, not capital markets, so they would not be affected by a FTT. Only
Dr. Michael Hasenstab provides an analysis of factors that will differentiate the recoveries of various countries from the global economic crisis. He believes emerging markets will recover more quickly than developed markets due to emerging markets' stronger domestic economies and less reliance on exports, more effective policy responses, and avoidance of issues like high public debt and private sector leverage plaguing developed nations. Recent economic trends support this view, with emerging markets showing stronger growth, job creation, and capital inflows. Hasenstab also discusses opportunities in foreign exchange and bond markets stemming from divergence in recoveries.
- After positive returns in the first three quarters of 2011, global markets saw negative returns in the second quarter due to normal volatility, though prospects for economic recession remain remote.
- While economic growth has slowed globally, it is still positive and temporary factors like disruptions from Japan's disasters and commodity price rises have contributed; leading indicators remain positive.
- European sovereign debt issues continue regarding some countries' debt levels and management, but efforts to address problems have been taken and debt is still seen as manageable.
- Outlook remains positive for continued growth in the second half of 2011 and beyond, though expect continued short-term market volatility; long-term discipline and diversification are recommended.
This paper investigates the barriers to innovation perceived by Polish manufacturing firms. It refers to the heterogeneity of innovation active firms. We introduce a taxonomy of innovative firms based on the frequency with which they introduce commercialised innovations using data from both CIS4 (for 2002-2004) and CIS5 (2004-2006). Two groups of innovation-active firms are distinguished: those which introduced innovation in both periods covered by both CIS (which we call persistent innovators) and those which introduced innovation either in CIS4 or CIS5 (which we call occasional innovators). We use a four step analysis covering binary correlations, Principal Component Analysis, probit model and correlations of disturbances. Two types of explanatory variables describing firms’ characteristics and innovation inputs used are considered. The paper shows that there are considerable differences in sensitivities to the perception of innovation barriers and in complementarities among barriers between persistent and occasional innovators. In the case of occasional innovators, a kind of innovation barrier chain is observed. This has an impact on differences in the frequency of innovation activities between the two groups of innovators and results in a diversification of innovators.
Authored by: Ewa Balcerowicz, Marek Pęczkowski, Anna Wziatek-Kubiak
Published in 2011
2009 T H E F U T U R E O F T H E G L O B A L F I N A N C I A L S Y S T...Madrid Network
The report explores how the global financial system may evolve over the near-term and long-term by examining recent macroeconomic shifts and presenting four potential long-term scenarios. In the near-term outlook, it finds that financial institutions are adapting to tighter credit, slower growth and increased regulation. Alternatives players have suffered but some may gain from deleveraging. Insurers' fortunes differ by region and line of business, with some able to capitalize on new opportunities. The long-term scenarios presented are financial regionalism, re-engineered Western-centrism, fragmented protectionism, and rebalanced multilateralism.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Eurorient ron nechemia at the epicenter where the financial system meets the ...EurOrientF
The document summarizes an interview with Mr. Ron Nechemia, Chairman of EurOrient Financial Group, regarding the global financial crisis. In the interview, Mr. Nechemia accurately predicted the financial crisis and its impacts. He warns that strains on the global financial system will deepen the economic downturn. He calls for comprehensive reform of regulatory frameworks and new liquidity instruments to support developing countries. Mr. Nechemia emphasizes the need for a holistic approach and global cooperation to address interconnected challenges through this crisis.
Budget balance, structural unemployment and fiscal adjustments: the spanish c...ManfredNolte
This document analyzes Spain's structural budget balance and unemployment rate between 1980-2012. It discusses two key points:
1) Estimates of Spain's structural unemployment rate and budget balance are highly uncertain and sensitive to assumptions. Alternative estimates show Spain's structural deficit in 2012 was around 3% of GDP rather than the European Commission's estimate of 5.9%.
2) Reducing unemployment and fiscal consolidation are mutually reinforcing but happen at different speeds. Structural reforms can lower unemployment and the deficit over time. Given uncertainties, a gradual fiscal adjustment in Spain is recommended while continuing reforms to support growth.
Are there enough resources for financing an Arab Development Transformation?UNDP Policy Centre
The fundamental development challenge in the Arab region is one of economic transformation or, more pertinent, a lack thereof. Heavy sectoral weights of extractive industries lead to dependence on global oil prices, even in oil-producing countries. The structure of production limits employment generation for skilled and semi-skilled labour. Low-skill services and informal activities then absorb the labour force, with corresponding harm to aggregate productivity and living standards. The slow emergence of manufacturing capacities distinguishes the economies of the Arab region from other developing countries. Compared to suitable aggregates or, more poignant, the successful Asian emerging economies, manufacturing exports from the Arab region do not contribute sufficiently to growth. Concurrently, growth is volatile and saving and investment rates are significantly below what is required to undertake this economic transition. This paper by the International Policy Centre for Inclusive Growth (IPC-IG) approaches fiscal space by asking: What barriers to the creation and use of such fiscal space must be removed in order to undertake such a transformation? In posing this question, the paper seeks to clearly demarcate its treatment of the fiscal space issue from that of the fiscal fundamentalist: its concern is to ensure that fiscal space is created
not in the abstract for an unspecified purpose.
The global economy continues its recovery but remains fragile with several challenges. While inflation is rising in emerging markets, developed countries still face low underlying inflation and structural problems requiring reforms. Interest rate increases in Europe and the US could jeopardize the recovery if done too soon. Demands for political reforms in the Middle East add uncertainty. Both the US and Europe must address high debt and weak growth through budget consolidation and reforms. The eurozone needs stronger institutions to improve collaboration between countries.
1) New central bank policies have calmed markets but risks remain in Europe. Politics could have a greater impact on markets in 2012 with high stakes.
2) Stocks are relatively cheap reflecting challenges but risks need acknowledgement. Within fixed income, investment-grade corporates offer opportunities.
3) Central bank liquidity has eased concerns but European issues like banks, sovereign debt, and austerity remain difficult hurdles in the coming months. Renewed volatility can't be ruled out.
This document discusses the development of Asia's financial systems. It notes that while Asia's financial systems demonstrated resilience during the global financial crisis, development of the financial sector still lags behind real economic growth. Asia's financial systems remain bank-dominated with underdeveloped capital markets and limited access to financial services, especially in low-income countries. Further developing Asia's financial systems is important to support continued economic growth and development in the region.
Falling corporate confidence due to the intensifying Eurozone crisis has increased pressure on corporate real estate (CRE) teams. CRE teams must pursue both cost savings and transformation agendas with limited options, as landlords are holding firm on pricing due to a lack of quality supply. Transformation is also challenging due to weak development pipelines, requiring pre-letting strategies to access quality space. Declining sentiment may cause corporations to delay expansion and portfolio strategies as uncertainties remain high. Office take-up was sustained in Q3 but is under pressure, while net absorption is trending down due to churn, consolidation, and disposals. Vacancy rates remain stable due to the availability of large volumes of poor quality stock. Completions of new space
This document discusses a comprehensive, consistent, and coordinated approach to macroeconomic policymaking. It argues that such an approach allows policymakers to better align instruments and objectives, helps deal with shocks, and improves economic resilience. Comprehensive policy actions within a country exploit synergies between monetary, fiscal, and structural policies. Consistent policy frameworks anchor long-term expectations while allowing short-term accommodation. Coordinated policies across countries amplify the effects of individual actions through positive spillovers. The approach can support growth and provide a response in the event of a negative shock.
The Global Economy No. 6 - September 11, 2012Swedbank
The document discusses developments in global monetary policy and the economic outlook. It notes that central banks, particularly the ECB and Federal Reserve, are expected to pursue more accommodative monetary policies to support growth. However, the effects on unemployment and real economic growth are expected to be small. More should be done through fiscal reforms and "unconventional fiscal policy" to boost growth. The ECB has launched a new bond-buying program called OMT, but its impact depends on reforms in crisis-hit countries and there are risks to the ECB's independence.
This document provides a proposal for managing the economic process if member states leave the eurozone. It recommends that exiting countries default on a percentage of their debt, allowing the EFSM or ESM to pay creditors and issue new bonds. The new debt would be held by EFSM/ESM on the exiting country's behalf to avoid immediate burden while their new currency finds parity with the euro. Eventually the country could rejoin the eurozone and begin repaying the debt. The proposal also discusses maintaining liquidity and currency stability between eurozone, emerging markets and key countries like the US through debt and currency swaps.
This document discusses whether debt levels are too high in the Euro area, specifically looking at Greece and other high-debt countries like Italy. For Greece, the author argues debt is unsustainable and needs to be reduced through an official debt restructuring. For other countries, debt may be sustainable now but leaves them vulnerable to shocks that could trigger another crisis. Two approaches for reducing debt are discussed: gradual fiscal adjustment or conducting a debt swap operation where some national debts are exchanged for Euro area debt. However, both approaches face challenges in providing credible commitment to debt reduction.
Similar to 4 options to address the eurozone's stock and flow imbalances the rising risk of a disorderly break-up - november 1 2011 (1) (20)
Confirmation of Payee (CoP) is a vital security measure adopted by financial institutions and payment service providers. Its core purpose is to confirm that the recipient’s name matches the information provided by the sender during a banking transaction, ensuring that funds are transferred to the correct payment account.
Confirmation of Payee was built to tackle the increasing numbers of APP Fraud and in the landscape of UK banking, the spectre of APP fraud looms large. In 2022, over £1.2 billion was stolen by fraudsters through authorised and unauthorised fraud, equivalent to more than £2,300 every minute. This statistic emphasises the urgent need for robust security measures like CoP. While over £1.2 billion was stolen through fraud in 2022, there was an eight per cent reduction compared to 2021 which highlights the positive outcomes obtained from the implementation of Confirmation of Payee. The number of fraud cases across the UK also decreased by four per cent to nearly three million cases during the same period; latest statistics from UK Finance.
In essence, Confirmation of Payee plays a pivotal role in digital banking, guaranteeing the flawless execution of banking transactions. It stands as a guardian against fraud and misallocation, demonstrating the commitment of financial institutions to safeguard their clients’ assets. The next time you engage in a banking transaction, remember the invaluable role of CoP in ensuring the security of your financial interests.
For more details, you can visit https://technoxander.com.
Madhya Pradesh, the "Heart of India," boasts a rich tapestry of culture and heritage, from ancient dynasties to modern developments. Explore its land records, historical landmarks, and vibrant traditions. From agricultural expanses to urban growth, Madhya Pradesh offers a unique blend of the ancient and modern.
Explore the world of investments with an in-depth comparison of the stock market and real estate. Understand their fundamentals, risks, returns, and diversification strategies to make informed financial decisions that align with your goals.
“Amidst Tempered Optimism” Main economic trends in May 2024 based on the results of the New Monthly Enterprises Survey, #NRES
On 12 June 2024 the Institute for Economic Research and Policy Consulting (IER) held an online event “Economic Trends from a Business Perspective (May 2024)”.
During the event, the results of the 25-th monthly survey of business executives “Ukrainian Business during the war”, which was conducted in May 2024, were presented.
The field stage of the 25-th wave lasted from May 20 to May 31, 2024. In May, 532 companies were surveyed.
The enterprise managers compared the work results in May 2024 with April, assessed the indicators at the time of the survey (May 2024), and gave forecasts for the next two, three, or six months, depending on the question. In certain issues (where indicated), the work results were compared with the pre-war period (before February 24, 2022).
✅ More survey results in the presentation.
✅ Video presentation: https://youtu.be/4ZvsSKd1MzE
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
Discovering Delhi - India's Cultural Capital.pptxcosmo-soil
Delhi, the heartbeat of India, offers a rich blend of history, culture, and modernity. From iconic landmarks like the Red Fort to bustling commercial hubs and vibrant culinary scenes, Delhi's real estate landscape is dynamic and diverse. Discover the essence of India's capital, where tradition meets innovation.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
Every business, big or small, deals with outgoing payments. Whether it’s to suppliers for inventory, to employees for salaries, or to vendors for services rendered, keeping track of these expenses is crucial. This is where payment vouchers come in – the unsung heroes of the accounting world.