1. The document discusses the current state of the global economy, noting that global interest rates are at their lowest levels in 5000 years and central banks have struggled to stimulate growth through unconventional monetary policies like quantitative easing and negative interest rates.
2. It outlines several factors contributing to weak global growth, including high debt levels, commodity price declines hurting commodity-exporting nations, declining populations in developed countries, excess industrial capacity, and rising inequality.
3. It argues that more coordinated global responses are needed to address these challenges, and that businesses need to enhance their resilience through strategies like reevaluating growth assumptions, transforming business models with technology, and improving executive decision-making with better data analytics.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
Vietnam's Recent Economic Development 2013Quynh LE
This report provides an update on Vietnam's recent economic developments. It summarizes that global growth is stabilizing at a moderate pace, though recovery in industrial production has been uneven across countries. Financial market conditions have improved due to monetary easing, but capital costs for developing countries are rising as risks in high-income countries recede. Inflation remains benign in most countries, prompting further monetary policy easing. Trade growth has slowed after a cyclical rebound, while most commodity prices have weakened in response to increased supply and substitution.
The document discusses the challenges governments face in withdrawing fiscal and monetary stimulus programs as economic recovery takes hold. It notes that withdrawing support too soon could undermine the recovery, but waiting too long risks unsustainable debt levels and inflation. Most developed nations will likely pursue a gradual tightening over the next year or two. Asia is already beginning to tighten policies as some countries see strong growth return. Overall recovery in 2010 may slow as liquidity declines, but the foundations for rising asset prices remain in place, leaving the author cautiously optimistic.
The global economic crisis has had unprecedented and wide-ranging effects. While governments have tried stimulus measures, rising debt and uncertainty continue to hamper recovery efforts. One potential solution is for governments to print money and allocate it to reduce various stakeholder debt levels, up to 25% of the existing money supply, provided inflation and exchange rates can be managed. This approach would require international coordination and testing in the most affected country first before broader implementation. It could help make economic systems viable again by improving liquidity and removing gloom while maintaining functional financial systems.
This document summarizes the Chief Economist's discussion of policy challenges facing the global economy in areas such as monetary policy, fiscal policy, and growth. It notes that while policymakers have successfully managed the crisis, challenges remain in areas like withdrawing monetary stimulus, reducing government debt, and rebalancing global growth. Overall economic growth is expected to be slow over the next few years. Coordinated, realistic policies across many levels will be needed to avoid future crises and promote sustainable growth.
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.
The document discusses the risks facing the Eurozone and world economy from following Japan's economic model of the past two decades. It notes that the Eurozone is particularly vulnerable due to its centralization of banks and lack of capital in the banking system. Several countries also lack the strong social cohesion and policy mechanisms that allowed Japan to maintain stability. With low growth, high debt levels, deflationary expectations and fragile banks, the global economy faces serious challenges in avoiding a prolonged period of stagnation.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
Vietnam's Recent Economic Development 2013Quynh LE
This report provides an update on Vietnam's recent economic developments. It summarizes that global growth is stabilizing at a moderate pace, though recovery in industrial production has been uneven across countries. Financial market conditions have improved due to monetary easing, but capital costs for developing countries are rising as risks in high-income countries recede. Inflation remains benign in most countries, prompting further monetary policy easing. Trade growth has slowed after a cyclical rebound, while most commodity prices have weakened in response to increased supply and substitution.
The document discusses the challenges governments face in withdrawing fiscal and monetary stimulus programs as economic recovery takes hold. It notes that withdrawing support too soon could undermine the recovery, but waiting too long risks unsustainable debt levels and inflation. Most developed nations will likely pursue a gradual tightening over the next year or two. Asia is already beginning to tighten policies as some countries see strong growth return. Overall recovery in 2010 may slow as liquidity declines, but the foundations for rising asset prices remain in place, leaving the author cautiously optimistic.
The global economic crisis has had unprecedented and wide-ranging effects. While governments have tried stimulus measures, rising debt and uncertainty continue to hamper recovery efforts. One potential solution is for governments to print money and allocate it to reduce various stakeholder debt levels, up to 25% of the existing money supply, provided inflation and exchange rates can be managed. This approach would require international coordination and testing in the most affected country first before broader implementation. It could help make economic systems viable again by improving liquidity and removing gloom while maintaining functional financial systems.
This document summarizes the Chief Economist's discussion of policy challenges facing the global economy in areas such as monetary policy, fiscal policy, and growth. It notes that while policymakers have successfully managed the crisis, challenges remain in areas like withdrawing monetary stimulus, reducing government debt, and rebalancing global growth. Overall economic growth is expected to be slow over the next few years. Coordinated, realistic policies across many levels will be needed to avoid future crises and promote sustainable growth.
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.
The document discusses the risks facing the Eurozone and world economy from following Japan's economic model of the past two decades. It notes that the Eurozone is particularly vulnerable due to its centralization of banks and lack of capital in the banking system. Several countries also lack the strong social cohesion and policy mechanisms that allowed Japan to maintain stability. With low growth, high debt levels, deflationary expectations and fragile banks, the global economy faces serious challenges in avoiding a prolonged period of stagnation.
Global synchronization provide upward bias to Equity based investments once again. In depth look at how Janney breaks down the year ahead and where to invest to take advantage of the reemergence of Global Growth.
The document discusses whether interest rate increases in 2021 could cause gold prices to plunge. It notes that real interest rates have a strong negative correlation with gold prices. While real rates could normalize somewhat as the economy recovers, there is also potential for inflation to rise due to money supply growth and pent-up demand, which could keep real rates low and support gold prices. The document concludes that several factors, including inflation expectations, money supply growth, and a dovish Fed, make higher inflation and continued gold price support more likely in 2021 than a 2013-style plunge.
The document discusses how growing acceptance of aggressive fiscal policy could support gold prices over the long term. It notes that government deficits have increased substantially during the pandemic, distributing funds more widely than in previous crises. This may boost inflation and set a precedent for larger responses that increase debt. While rising bond yields recently pressured gold, real yields remain low and inflation expectations are up, suggesting the Fed may act to curb rates, supporting gold. The document analyzes factors that could cause rates and gold prices to rise or fall in the near term.
1. Inflation is increasingly being driven by global factors like rising food and fuel prices rather than domestic monetary policies. As trade and capital flows have integrated globally, inflation has become more volatile and persistent across countries.
2. 'Asset inflation' caused by speculative investment treating commodities like food and oil as assets contributes to high and volatile price levels beyond temporary spikes. High growth in global financial assets is channeling capital into financial markets rather than productive investment.
3. Countries like Brazil are vulnerable to speculative capital flows that can rapidly appreciate and depreciate their currencies, with inflationary impacts. Coordinated macroeconomic, exchange rate, and capital control policies are needed to manage such financial instability.
The document discusses whether the current economic boom in the US will continue. It notes that while the US GDP has recovered from the pandemic recession, there are threats on the horizon. Inflation is rising due to excess stimulus and debt levels are high, which could cause economic turbulence if interest rates rise. The recovery also remains vulnerable to coronavirus variants. Overall, the document argues while the economy has recovered, threats remain that could undermine sustained growth and support further gold price rallies.
Rania Al-Mashat - Minister of Tourism
ERF 24th Annual Conference
The New Normal in the Global Economy: Challenges & Prospects for MENA
July 8-10, 2018
Cairo, Egypt
The world economy is at a critical juncture with risks of a double-dip recession in major developed economies and moderating growth in emerging markets. There are downside risks from contagion of the sovereign debt crisis and fragility in the banking sector combined with high unemployment and potential policy paralysis. To address these challenges, the document recommends no premature fiscal austerity but more short-term stimulus coordinated internationally and focused on job creation and medium-term reforms. Bolder actions are also needed to deal with financial fragility and provide stable development financing aligned with reforms to the financial system.
The document contains several articles discussing economic and financial market risks and opportunities. The first section highlights Standard & Poor's downgrading of the UK banking system due to economic weakness, reputational damage to banks, and high dependence on government support. The second section focuses on opportunities in emerging markets such as Brazil, where fundamentals remain positive and growth is expected to be strong. It also notes pension funds pouring funds into emerging market debt and the potential for relatively higher growth in developing economies going forward.
Rohit Business and economic environmentRohit Yadav
Liquidity trap refers to a situation where monetary policy is ineffective because interest rates are close to zero, causing people and banks to hoard money even if more is supplied. This can occur during severe recessions and deflation. Two examples are the Great Depression and Japan's lost decade in the 1990s. Overcoming a liquidity trap requires unconventional policies like quantitative easing or expansionary fiscal policy to stimulate demand.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
- Economic growth in 2011 was sluggish at around 1.7% GDP, below the level needed to significantly reduce the unemployment rate. While some improvements were seen, job growth and the labor participation rate remained problematic.
- The Federal Reserve implemented several quantitative easing programs aimed at stimulating growth by lowering interest rates and increasing liquidity, but these have had limited success in spurring lending and investment.
- Continued policy uncertainty around taxes, regulations, healthcare, and the European fiscal crisis have contributed to risk aversion among businesses and investors, limiting hiring and capital expenditures. The economic outlook for 2012 remains tepid.
The document discusses the outlook for the global economy in 2012. It predicts that US GDP growth will accelerate to 2.0-2.5% in the second half of the year, helped by improving housing, employment, and consumer demand. It also discusses the outlook for other major economies like the Eurozone, Japan, and China, noting continued challenges from the European debt crisis but also the use of monetary and fiscal policy tools to support growth. Key investment implications include overweighting equities and shifting exposure to non-US markets.
(Positive Money) - The Bank of England has created £375 billion through Quantitative Easing (QE). The money created has strengthened bank balance sheets and boosted the stock market, but has had limited effect on the rest of the economy. But there’s no reason QE can’t be put to better use – some simple reforms proposed by the New Economics Foundation could allow the Bank of England to put the money directly where it’s needed: building new homes, lending to small businesses and investing in green infrastructure.
A new report entitled “Strategic Quantitative Easing” published by the New Economics Foundation (nef) is calling for a strategic QE – investing in home building and energy efficiency, infrastructure and small business lending. If you have always wondered how exactly does QE work, and how it could work differently - this report will give you the answers.
Read the report here
Postive Money
HSBC entered the Argentine banking market in the 1990s through acquisitions. Initially, the outlook was positive with profits in 1999. However, the Argentine economic crisis from 1999-2001 severely impacted HSBC. The devaluation of the peso caused HSBC to lose $977 million in 2001 as loan repayments were discounted under government pesification policies. While early losses occurred, HSBC has remained in Argentina and adjusted to the economic instability.
Business, People, and COVID: A RoadmapBaburaj Nair
This document provides an overview of the economic impacts of recessions and depressions based on historical examples over the last 100 years. It notes that recessions are defined as two consecutive quarters of negative GDP growth and depressions see over 10% declines in actual GDP. Previous recessions have severely impacted sectors like finance, construction, housing, agriculture, and aviation. The document advocates for contingency planning and proposes actions companies can take to manage impacts on revenues, supply chains, productivity, costs and employees. It emphasizes the need for cooperation between government, businesses and society to maintain confidence and overcome economic downturns.
Dr Ben Thirkell-White on Global poverty and the credit crunch 16 Sept 2009.
Collapse of Western excess is creating a crisis for developing countries caught in the tailwind. 2.8 billion survive on less than two dollars a day. After significant gains in the last decade, which saw GDP growing across Africa at an average of 5%, latest figures indicate this is dropped to less than 3%. The solutions are complex, will be incremental, and require action at both macro (intergovernmental) and micro-levels (individuals and NGOs assisting economic development on the ground). There is no silver bullet, but only realistic and committed action at all levels.
If U.S. politics do not derail the recovery, pent-up demand can drive faster economic growth. Fixed-income outflows appear likely to continue, pushing rates higher.
1. China has experienced a dramatic economic rise fueled by cheap labor, investment, and exports, but this growth has been built on unsustainable levels of debt and a fragile financial system.
2. China is at high risk of a financial crisis in the next few years as liquidity growth slows and debt levels surpass 225% of GDP, with corporate and shadow banking debt posing significant risks.
3. While China can take steps like developing its bond market, increasing consumption and reducing unproductive investment will be difficult due to political opposition, so a crisis may be needed to force meaningful reforms.
- The document discusses quantitative easing policies adopted by countries in response to the 2008 global financial crisis and debates around continuing or withdrawing stimulus.
- It notes that while stimulus can boost economies, growth rates vary globally and historically over long periods. Developed economies face structural challenges to reaching over 2% growth even with stimulus.
- Withdrawing stimulus too quickly could cause volatility, so a gradual, clearly communicated process is recommended to bring stability to global financial markets as interest rates rise in the US.
Five Misconceptions That Don't Make For Good Investment DecisionsEdward Hugh
This document discusses five common misconceptions about investment decisions and macroeconomic policies:
1. Printing money does not always lead to inflation, as demonstrated by Japan's experience with deflation despite monetary expansion. Other factors like demographics can impact inflation.
2. Money printing through quantitative easing may not be able to stop deflation in Europe due to structural issues like population aging reducing demand.
3. Devaluing currency does not guarantee getting out of economic trouble, as Japan struggled to control the yen's value for years despite intervention.
4. The euro is a political project, so its challenges may require political not just technical solutions. Money printing alone can't address issues like demographic changes.
But resolving this legacy issue with continued application of past interventionist instruments does not incentivize the much needed structural reforms and private capital market activities. Financial repression has induced a re-allocation of capital across markets and greatly enhanced the role of public markets at the detriment of private market activities. Artificially low – or in some cases even negative – interest rates break the credit intermediation channel which can crowd out viable private investors.
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.
Global synchronization provide upward bias to Equity based investments once again. In depth look at how Janney breaks down the year ahead and where to invest to take advantage of the reemergence of Global Growth.
The document discusses whether interest rate increases in 2021 could cause gold prices to plunge. It notes that real interest rates have a strong negative correlation with gold prices. While real rates could normalize somewhat as the economy recovers, there is also potential for inflation to rise due to money supply growth and pent-up demand, which could keep real rates low and support gold prices. The document concludes that several factors, including inflation expectations, money supply growth, and a dovish Fed, make higher inflation and continued gold price support more likely in 2021 than a 2013-style plunge.
The document discusses how growing acceptance of aggressive fiscal policy could support gold prices over the long term. It notes that government deficits have increased substantially during the pandemic, distributing funds more widely than in previous crises. This may boost inflation and set a precedent for larger responses that increase debt. While rising bond yields recently pressured gold, real yields remain low and inflation expectations are up, suggesting the Fed may act to curb rates, supporting gold. The document analyzes factors that could cause rates and gold prices to rise or fall in the near term.
1. Inflation is increasingly being driven by global factors like rising food and fuel prices rather than domestic monetary policies. As trade and capital flows have integrated globally, inflation has become more volatile and persistent across countries.
2. 'Asset inflation' caused by speculative investment treating commodities like food and oil as assets contributes to high and volatile price levels beyond temporary spikes. High growth in global financial assets is channeling capital into financial markets rather than productive investment.
3. Countries like Brazil are vulnerable to speculative capital flows that can rapidly appreciate and depreciate their currencies, with inflationary impacts. Coordinated macroeconomic, exchange rate, and capital control policies are needed to manage such financial instability.
The document discusses whether the current economic boom in the US will continue. It notes that while the US GDP has recovered from the pandemic recession, there are threats on the horizon. Inflation is rising due to excess stimulus and debt levels are high, which could cause economic turbulence if interest rates rise. The recovery also remains vulnerable to coronavirus variants. Overall, the document argues while the economy has recovered, threats remain that could undermine sustained growth and support further gold price rallies.
Rania Al-Mashat - Minister of Tourism
ERF 24th Annual Conference
The New Normal in the Global Economy: Challenges & Prospects for MENA
July 8-10, 2018
Cairo, Egypt
The world economy is at a critical juncture with risks of a double-dip recession in major developed economies and moderating growth in emerging markets. There are downside risks from contagion of the sovereign debt crisis and fragility in the banking sector combined with high unemployment and potential policy paralysis. To address these challenges, the document recommends no premature fiscal austerity but more short-term stimulus coordinated internationally and focused on job creation and medium-term reforms. Bolder actions are also needed to deal with financial fragility and provide stable development financing aligned with reforms to the financial system.
The document contains several articles discussing economic and financial market risks and opportunities. The first section highlights Standard & Poor's downgrading of the UK banking system due to economic weakness, reputational damage to banks, and high dependence on government support. The second section focuses on opportunities in emerging markets such as Brazil, where fundamentals remain positive and growth is expected to be strong. It also notes pension funds pouring funds into emerging market debt and the potential for relatively higher growth in developing economies going forward.
Rohit Business and economic environmentRohit Yadav
Liquidity trap refers to a situation where monetary policy is ineffective because interest rates are close to zero, causing people and banks to hoard money even if more is supplied. This can occur during severe recessions and deflation. Two examples are the Great Depression and Japan's lost decade in the 1990s. Overcoming a liquidity trap requires unconventional policies like quantitative easing or expansionary fiscal policy to stimulate demand.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
- Economic growth in 2011 was sluggish at around 1.7% GDP, below the level needed to significantly reduce the unemployment rate. While some improvements were seen, job growth and the labor participation rate remained problematic.
- The Federal Reserve implemented several quantitative easing programs aimed at stimulating growth by lowering interest rates and increasing liquidity, but these have had limited success in spurring lending and investment.
- Continued policy uncertainty around taxes, regulations, healthcare, and the European fiscal crisis have contributed to risk aversion among businesses and investors, limiting hiring and capital expenditures. The economic outlook for 2012 remains tepid.
The document discusses the outlook for the global economy in 2012. It predicts that US GDP growth will accelerate to 2.0-2.5% in the second half of the year, helped by improving housing, employment, and consumer demand. It also discusses the outlook for other major economies like the Eurozone, Japan, and China, noting continued challenges from the European debt crisis but also the use of monetary and fiscal policy tools to support growth. Key investment implications include overweighting equities and shifting exposure to non-US markets.
(Positive Money) - The Bank of England has created £375 billion through Quantitative Easing (QE). The money created has strengthened bank balance sheets and boosted the stock market, but has had limited effect on the rest of the economy. But there’s no reason QE can’t be put to better use – some simple reforms proposed by the New Economics Foundation could allow the Bank of England to put the money directly where it’s needed: building new homes, lending to small businesses and investing in green infrastructure.
A new report entitled “Strategic Quantitative Easing” published by the New Economics Foundation (nef) is calling for a strategic QE – investing in home building and energy efficiency, infrastructure and small business lending. If you have always wondered how exactly does QE work, and how it could work differently - this report will give you the answers.
Read the report here
Postive Money
HSBC entered the Argentine banking market in the 1990s through acquisitions. Initially, the outlook was positive with profits in 1999. However, the Argentine economic crisis from 1999-2001 severely impacted HSBC. The devaluation of the peso caused HSBC to lose $977 million in 2001 as loan repayments were discounted under government pesification policies. While early losses occurred, HSBC has remained in Argentina and adjusted to the economic instability.
Business, People, and COVID: A RoadmapBaburaj Nair
This document provides an overview of the economic impacts of recessions and depressions based on historical examples over the last 100 years. It notes that recessions are defined as two consecutive quarters of negative GDP growth and depressions see over 10% declines in actual GDP. Previous recessions have severely impacted sectors like finance, construction, housing, agriculture, and aviation. The document advocates for contingency planning and proposes actions companies can take to manage impacts on revenues, supply chains, productivity, costs and employees. It emphasizes the need for cooperation between government, businesses and society to maintain confidence and overcome economic downturns.
Dr Ben Thirkell-White on Global poverty and the credit crunch 16 Sept 2009.
Collapse of Western excess is creating a crisis for developing countries caught in the tailwind. 2.8 billion survive on less than two dollars a day. After significant gains in the last decade, which saw GDP growing across Africa at an average of 5%, latest figures indicate this is dropped to less than 3%. The solutions are complex, will be incremental, and require action at both macro (intergovernmental) and micro-levels (individuals and NGOs assisting economic development on the ground). There is no silver bullet, but only realistic and committed action at all levels.
If U.S. politics do not derail the recovery, pent-up demand can drive faster economic growth. Fixed-income outflows appear likely to continue, pushing rates higher.
1. China has experienced a dramatic economic rise fueled by cheap labor, investment, and exports, but this growth has been built on unsustainable levels of debt and a fragile financial system.
2. China is at high risk of a financial crisis in the next few years as liquidity growth slows and debt levels surpass 225% of GDP, with corporate and shadow banking debt posing significant risks.
3. While China can take steps like developing its bond market, increasing consumption and reducing unproductive investment will be difficult due to political opposition, so a crisis may be needed to force meaningful reforms.
- The document discusses quantitative easing policies adopted by countries in response to the 2008 global financial crisis and debates around continuing or withdrawing stimulus.
- It notes that while stimulus can boost economies, growth rates vary globally and historically over long periods. Developed economies face structural challenges to reaching over 2% growth even with stimulus.
- Withdrawing stimulus too quickly could cause volatility, so a gradual, clearly communicated process is recommended to bring stability to global financial markets as interest rates rise in the US.
Five Misconceptions That Don't Make For Good Investment DecisionsEdward Hugh
This document discusses five common misconceptions about investment decisions and macroeconomic policies:
1. Printing money does not always lead to inflation, as demonstrated by Japan's experience with deflation despite monetary expansion. Other factors like demographics can impact inflation.
2. Money printing through quantitative easing may not be able to stop deflation in Europe due to structural issues like population aging reducing demand.
3. Devaluing currency does not guarantee getting out of economic trouble, as Japan struggled to control the yen's value for years despite intervention.
4. The euro is a political project, so its challenges may require political not just technical solutions. Money printing alone can't address issues like demographic changes.
But resolving this legacy issue with continued application of past interventionist instruments does not incentivize the much needed structural reforms and private capital market activities. Financial repression has induced a re-allocation of capital across markets and greatly enhanced the role of public markets at the detriment of private market activities. Artificially low – or in some cases even negative – interest rates break the credit intermediation channel which can crowd out viable private investors.
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.
Western governments are hopelessly addicted to deficit financing while refusing to address looming funding issues - with apologies to the embarrassingly foolish Angela Merkel, politicians can no more successfully “battle” the markets than you and I can successfully “battle” gravity. Petrocapita is an investment trust built around the premise that demand for energy will continue to move prices higher over the long-term. Petrocapita was created to allow investors to add professionally managed oil & gas assets directly to their portfolios.
This document summarizes a market perspective report from July 2016. It discusses how central banks have driven interest rates to record lows and even negative levels in some countries in an attempt to stimulate economic growth. However, global GDP growth remains sluggish despite enormous monetary stimulus efforts. As a result, government debt levels have increased substantially. The long-term implications of prolonged low and negative interest rates on economies and financial markets remains uncertain.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
AnsA) When financial markets stood on the verge of collapse in th.pdfsutharbharat59
Ans:
A) When financial markets stood on the verge of collapse in the summer of 2008, two of the
worlds most important central banks, the US Federal Reserve and the Bank of England, began
considering unorthodox policy measures. They turned to Quantitative Easing, or QE: injecting
money into the economy by purchasing assets from the private sector, in the hope of boosting
spending and staving off the threat of deflation. These were desperate measures for desperate
times.
With signs of a fragile economic recovery gathering enough momentum to reassure
policymakers in the US, the policy was expected to be wound down. But in a move that caught
commentators off guard, the Fed instead committed to continue with its existing level of asset
purchases. For the foreseeable future, at least, QE is here to stay. What began as a short-term
crisis measure has now become a key component of Anglo-American growth strategies. Its
important, then, to take stock of QE and the central role it has played within the Anglo-American
response to the financial crisis.
The way the Fed led the policy response to the financial crisis is important in two ways. First, it
reflects the extent to which the Anglo-American economies have become financialised: credit-
debt relations are pervasive throughout all facets of contemporary economic activity and there
has been a deepening, extension and deregulation of financial markets commensurate with this
development. In that context, with the increased competitiveness, scale and global integration of
financial markets intensifying the risk of financial instability, the crisis management capacities of
central banks have become increasingly important.
Second, central bank leadership of the policy response also reflects a key feature of neoliberal
political economy in practice. Despite all the rhetoric of free markets, competition and
deregulation that has been the mainstay of neoliberalism, there is a central contradiction at its
heart: neoliberalism has been extremely reliant upon the active interventions of central banks
within supposedly free markets.
The crisis has been warehoused on the expanding balance sheets of central banks, demonstrating
just how much scope for policy manoeuvre there is when governing elites want it. Government
debt and private assets, including toxic mortgage-backed securities, have been indefinitely
transferred onto central bank accounts. This strategy highlights the role of arbitrary accounting
processes, shaped by state institutions, at the heart of supposedly free market economies.
Given this room for manoeuvre, there is no doubt that a much more expansionary fiscal policy
and a progressive taxation system could have been implemented in response to the crisis, but that
response is foreclosed by the ideological confines of the prevailing neoliberal orthodoxy. Instead,
we have monetary expansion and fiscal austerity.
Incubated within the crisis conditions of the 1970s, the neoliberal revolution in the West.
What recent and past actions have Canada and the US taken to counter.pdfmeejuhaszjasmynspe52
What recent and past actions have Canada and the US taken to counteract their exchange rates
with the economy in such distress over the past 10 years?
Solution
Since 2007, the world has experienced a period of severe financial stress, not seen since the time
of the Great Depression. This crisis started with the collapse of the subprime residential
mortgage market in the United States and spread to the rest of the world through exposure to
U.S. real estate assets, often in the form of complex financial derivatives, and a collapse in global
trade. Many countries were significantly affected by these adverse shocks, causing systemic
banking crises in a number of countries, despite extraordinary policy interventions. Systemic
banking crises are disruptive events not only to financial systems but to the economy as a whole.
Such crises are not specific to the recent past or specific countries – almost no country has
avoided the experience and some have had multiple banking crises. While the banking crises of
the past have differed in terms of underlying causes, triggers, and economic impact, they share
many commonalities. Banking crises are often preceded by prolonged periods of high credit
growth and are often associated with large imbalances in the balance sheets of the private sector,
such as maturity mismatches or exchange rate risk, that ultimately translate into credit risk for
the banking sector.
Crisis management starts with the containment of liquidity pressures through liquidity support,
guarantees on bank liabilities, deposit freezes, or bank holidays. This containment phase is
followed by a resolution phase during which typically a broad range of measures (such as capital
injections, asset purchases, and guarantees) are taken to restructure banks and reignite economic
growth. It is intrinsically difficult to compare the success of crisis resolution policies given
differences across countries and time in the size of the initial shock to the financial system, the
size of the financial system, the quality of institutions, and the intensity and scope of policy
interventions. With this caveat we now compare policy responses during the recent crisis episode
with those of the past. The policy responses during the 2007-2009 crises episodes were broadly
similar to those used in the past. First, liquidity pressures were contained through liquidity
support and guarantees on bank liabilities. Like the crises of the past, during which bank
holidays and deposit freezes have rarely been used as containment policies, we have no records
of the use of bank holidays during the recent wave of crises, while a deposit freeze was used only
in the case of Latvia for deposits in Parex Bank. On the resolution side, a wide array of
instruments was used this time, including asset purchases, asset guarantees, and equity injections.
All these measures have been used in the past, but this time around they seem to have been put in
place quicker (for detailed informatio.
2012 global credit outlook sovereign debt problems weigh on a mostly tepid fo...Pim Piepers
The document summarizes Standard & Poor's outlook for global credit markets in 2012. Key points include:
- Sovereign debt problems in Europe and potential fiscal tightening in the US increase uncertainty and risk of recession.
- The US recovery is expected to continue but unemployment will likely remain above 8%. Growth in emerging markets should be solid.
- European economies will likely see continued recession in the first half of 2012 driven by weak demand, tight credit conditions, and high unemployment. Housing markets will remain weak except in the UK.
Swedbank's Global Economic Outlook, 2010 March 18Swedbank
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
The document summarizes a report by The Economist Intelligence Unit on the global economic outlook for Q4 2020. It finds that advanced economies will enter a "new normal" characterized by slow growth, low inflation, and high debt due to the fiscal stimulus measures enacted during the COVID-19 pandemic. Central banks have taken on the new role of directly financing government spending, and low interest rates mean debt servicing costs are negligible. As a result, debt piles may simply disappear over time if growth outpaces interest rates. However, this situation also carries long-term risks for productivity, inflation, and financial stability.
The document discusses why global economies have become increasingly dependent on central bank monetary stimulus to boost economic growth. It argues that a variety of imbalances, such as globalization, debt levels, environmental regulations, and aging populations, have reduced the productivity of capital. To counteract these imbalances, governments and central banks have lowered interest rates, enacted quantitative easing programs, and reduced banking regulations to increase the amount of money and credit in the economy. However, relying too heavily on monetary policy to stimulate growth risks creating larger economic distortions over the long run. Addressing the underlying imbalances through productive economic and social policies could help reduce the need for continual monetary stimulus.
The present commentary discusses how past bad policy choices of Canada's central bank have tied its hands to manage the inflation crisis of 2022. The price level has been disconnected from the realities of the economic conditions prevailing in the macroeconomy. Given the low-price level, the bank has been lowering its policy rate since the 1990s. And now it finds itself stuck in a low-rate trap that it can't increase the rate even if current inflationary pressure demands so. If it increases its policy rate to manage the inflation crisis, it may create another crisis(es) in the process – asset crisis, debt crisis, and/or systemic crisis. What to choose, whether inflation crisis or other(s)? It appears to be in a fix.
The document provides an update on the world economic situation and prospects as of mid-2012. It finds that despite some signs of improvement, the global economic outlook remains challenging. Global economic growth is projected to remain slow in 2012, below most regions' potential, and the jobs crisis continues globally and in many regions. The largest risk to the outlook is a further escalation of the euro area debt crisis.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
Developing Trends - Central Banks - The Good the Bad and the UglyNikhil Mohan
This document discusses central banks and their performance. It summarizes that central banks aim to target inflation and maximize output. The US central bank has performed best among developed economies, while Israel's central bank has performed best among emerging markets from 2002-2011. Countries with interest rates lower than what the Taylor Rule prescribes have experienced little inflation cost and stronger growth. Inflation was a concern in early-mid 2011, but growth, or the lack thereof, will be a bigger concern for emerging markets going forward, suggesting interest rate cuts may be needed.
The document summarizes the US financial crisis and its impact on the US dollar and global economy. It discusses how loose lending standards, mortgage-backed securities, and credit default swaps led to the crisis. Central banks have responded by printing vast sums of money to inject liquidity. However, coordinated global policy action is also needed to rebalance global imbalances between surplus and deficit countries. Going forward, the world faces challenges around debt contraction and whether $8 trillion is sufficient given potential solvency issues rather than just liquidity problems.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
1. GLOBAL IMBALANCES1.1 Cheap But Flighty How Global Imbalanc.docxSONU61709
1. GLOBAL IMBALANCES
1.1 Cheap But Flighty: How Global Imbalances Create Financial Fragility
by Toni Ahnert and Enrico Perotti
Bank of Canada Working Paper 2015-33
https://www.bankofcanada.ca/wp-content/uploads/2015/08/wp2015-33.pdf
August 2015
How a wealth shift to emerging countries may lead to instability in developed countries. Investors exposed to expropriation risk are willing to pay a safety premium to invest in countries with good property rights. Domestic intermediaries compete for such cheap funding by carving out safe claims, which requires demandable debt. While foreign inflows allow countries to expand their domestic credit, risk-intolerant foreign investors withdraw even under minimal uncertainty. We show that more foreign funding causes larger and more frequent runs. Beyond some scale, even risk-tolerant domestic investors are induced to withdraw to avoid dilution. As excess liquidation causes social losses, a domestic planner may seek prudential measures on the scale of foreign inflows.
Topics to study:
· Investment / risk - relationship
· Global Imbalances
· Factors to attract foreign investment
· Safety-seeking foreign funding
1. An increasing scale of foreign funding may induce runs even by risk-tolerant investors since they seek to avoid dilution.
2. Result supports a mandate for introducing a macroprudential regulator to oversee the nature of foreign inflows because the socially preferred funding structure would involve less credit volume and more stability than the private choice.
3. Global imbalances shaped the credit boom and, ultimately, the financial crisis
4. The accumulation of wealth in countries with a weak protection of property rights creates a demand for absolute safety provided by intermediaries in developed countries.
5. The safety-seeking nature of foreign flows creates risk.
1.2 Global Imbalances and the Financial Crisis: Products of Common Causes
Maurice Obstfeld and Kenneth Rogoff
University of California, Berkeley, and Harvard University.
Federal Reserve Bank of San Francisco
https://scholar.harvard.edu/files/rogoff/files/global_imbalances_and_financial_crisis_0.pdf
November 2009
This paper makes a case that the global imbalances of the 2000s and the recent global financial crisis are intimately connected. Both have their origins in economic policies followed in a number of countries in the 2000s and in distortions that influenced the transmission of these policies through U.S. and ultimately through global financial markets. In the U.S., the interaction among the Fed’s monetary stance, global real interest rates, credit market distortions, and financial innovation created the toxic mix of conditions making the U.S. the epicenter of the global financial crisis. Outside the U.S., exchange rate and other economic policies followed by emerging markets such as China contributed to the United States’ ability to borrow cheaply abroad and thereby finance its unsustainable housing bubble.
Topics to st ...
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
Similar to Building Business Resilience and Ingenuity (20)
1. 1
GLOBAL ECONOMY – A NEW NORMAL:
Building Business Resilience and Ingenuity – A Compelling Global Economic Imperative.
Global interest rates are their lowest for 5000 years says Bank of America.
US Federal Reserve interest rate has been closer to zero for quite some time. Central
Banks in Japan, Sweden, Denmark, Switzerland, and Euro Zone have been dabbling
with price of money by venturing in to negative interest rates, as their initial efforts to
boost growth by increasing the quantity of money (through quantitative easing, credit
easing and currency market interventions) have not helped revive global growth.
Monetary policy actions that were unheard of until a few years ago have become part
of a new normal. But even these unorthodox monetary policy stimuli appear to be
totally ineffective to revive global growth and inflation.
The flattening yield curves and negative yields on government bonds in developed
economies essentially reflect the long term expectations on global growth, inflation,
and interest rates.
Welcome onboard. We have entered an era where capital has practically zero cost.
Why is the global growth and inflation not kicking in when cost of capital is zero and
with none other than the central banks having thrown their hat in the ring?
Firstly, very high levels of public and private debts have crippled global investment,
and the associated global debt deleveraging is slow and could take a few years. Not to
mention the latent risk of debt defaults by certain highly leveraged sectors and
countries that, if happens, can be gut wrenching, to say the least. Across America,
Europe, and Asia significant amount of public and private debts with exposure to
energy, commodity and real estate sectors are being classified as bad debts, shaking
investors’ confidence.
Secondly, roil in the commodity markets have left a big hole in the purse of those
countries that are dependent upon commodity exports. Brazil, Venezuela, Argentina,
Colombia, Nigeria, and Russia are battling tumbling currencies, steep inflation and
interest rates. Double digit budget deficits in Brazil and Venezuela are acting as a last
straw. Instability in many parts of Africa and Middle East continue to pose challenge
PEARLSTELLAR
PEARLSTELLAR BUSINESS MANAGEMENT PVT. LTD
2. 2
for investment and growth. In fact, things are taking a turn for worse in Africa with
drought, famine, sectarian infighting, and prospect of civil war looming over several
African countries. Even there is a risk of sovereign defaults in some of the African
countries.
Third, falling population growth (birth rates lesser than replacement rates) across
developed economies, along with ageing societies (falling working age population)
across developed and few emerging economies (America, Europe, Japan, South Korea,
China, and Russia) is adversely impacting the labor input to growth, besides causing a
savings glut as the elderly spend less. On the other hand, increasing dependency ratios
are straining the public welfare budgets.
Fourth, the long trail of excess capacities and glut in commodity inventories left behind
by the the boom period is rendering any new capital spending counterproductive,
especially when similar assets are on the block for throw away prices in the market.
And fifth, the rising inequality causes skewed distribution of incomes with
disproportionate amount of income flowing to capital (income from capital/wealth)
and increasingly lesser income flowing to labor (income from labor), which essentially
means people (low and middle income households) who tend to spend higher
proportion of their income earn less, and people (wealthier households/entities) who
tend to save higher proportion of their income earn more, resulting in further savings
glut and thereby depressing overall global consumption.
Under these circumstances (feeble public, private investments and weak consumption),
the monetary stimulus (zero or negative interest rates, quantitative easing, credit
easing, current market interventions etc.) adopted by the central banks have calmed
down the nerves in the financial markets and have helped avoid meltdown of stocks
and asset bubbles. In other words, the cut loose monetary policy actions, with stretched
balance sheets, adopted by central banks of developed economies have given a
temporary solace to the financial markets by providing artificial support to the asset
prices even though the under lying asset quality is a suspect, and when the real
economy has been gasping for breath. In fact, such cut loose gravity defying actions by
the central banks conceal the fault lines and open wounds of the real economy by
continuing to feed / reinforce the behavior of irrational exuberance, and hence to that
extent making it extremely harder for the real economy to heal and regain its
fundamentals. Further, such monetary stimuli if adopted for a sustained duration
(which indeed is the case for few years now), carry the risk of creating further asset
bubbles and unmanageable overheating of the global economy, not to mention the
further income & wealth inequalities created by those actions.
Undeniably the central banks across the globe are doing whatever it takes to avoid
global economy slipping in to deflation and deep recessions, while few governments
are complimenting the efforts of the central banks by increasing their budgets for
public investments even if this warrants a short term spike in, or digression from the
3. 3
committed targets for budget deficits. But such interventions are not sustainable
neither can they help revive global growth.
Given this global context, it is imperative to come to terms with the following stark
realities:
1. There are several layers of global issues (debts, defaults, deficits, devaluations,
demographic challenges, redistributions, excess capacities, glut in inventories,
regional conflicts, social backlashes, isolationist tendencies etc.) that are likely to
influence the path to global economic recovery. These issues need a coordinated
response from the governments and institutions, which remains elusive so far.
2. We have not found an answer yet to revive the global growth. So far all the
monetary and fiscal stimuli have not produced traction with real economy, and in
fact have the impact of delaying the recovery and reinstatement of fundamentals,
because there is lack of political will across the globe to go through structural
reforms that would essentially entail short term pain.
3. Honestly, we do not have any credible and realistic way to forecasting when we are
likely to see the light at the end of the tunnel. And even when it occurs we are quite
uncertain about the kinds of experiences and changes we would have gone through
as an individual, society, and nation. And the intensity, impact, and memories of
those events is likely to open up new chapters in behavioral economics. We are
already a mute witness to referendums, and public backlash in many countries
against globalization, privatization, austerity, sovereign bailouts, global trade,
disruptive business models (platforms), technology innovations, currency unions,
open borders, migrations, resettlements, strained public services, labor reforms,
unemployment, marginalization, rising income / wealth inequality, and structural
reforms.
4. There is already a great disbelief on Britain having voted to leave the European
Union, especially when a day before the historic referendum the pound sterling
rallied sharply against the dollar as the opinion polls predicted a verdict to remain
within the European Union. A day later, the “leave campaign” having won by huge
lead. France, Netherlands, and Italy are likely to follow suit. Governments and
political establishments across Europe and America are becoming increasingly
inept at gauging the mood of the public, as witnessed through such surprise
outcomes of primaries, elections, and referendums. Scotland has not minced words
on their intentions to conduct another referendum on leaving UK since they see
their future as part of European Union. As Europe sails in to unchartered territories,
trade and business relationships within Europe and with the rest of the world
would get renegotiated and redefined. And it is anyone’s guess as to how these
events would impact the recovery of global economy.
Clearly we are in a for a long haul. We cannot afford to turn a blind eye to what is
happening around us. Several such unprecedented and defining moments in the
4. 4
current global economic, monetary, political and social landscape, are creating strong
headwinds to business growth and profitability.
Hence the need of the hour is to enhance business resilience to volatility, and sharpen
organization ingenuity to ride new waves of opportunities, and succeed in these
uncertain times without getting overwhelmed by external events.
In this regard, there are four key areas that merits immediate attention from the
business leaders:
- Strategy Making & Execution: Revalidate growth strategies by revisiting the
underlying assumptions against geographies, sectors, verticals, segments, and
supply chain. Keenly listen to the feedback and ideas from the frontlines. Exorcise
intellectual arrogance and contempt that stifle free flow of ideas and collaboration.
Build internal capabilities to capture new opportunities. Assign clear ownerships
on strategy execution within the organization along with measurable metrics and
milestones. Inorganic growth opportunities are to be critically analyzed for their
relevance in the overall portfolio and value proposition strategy. There are several
instances of big businesses having grossly failed to leverage the synergies of
inorganic growth due to poor integration of the newly acquired business, resulting
in compartmentalized silos within the organization. Lead cultural change. Break
barriers to performance. Do not hesitate to rock the boat, if that can help infuse
accountability, agility, sense of urgency and bias for action.
- Business Transformation: Revalidate business models and leverage technology
deployment as a competitive differentiator. Be open to let go some of the legacy
processes, practices and business models that are not in sync with current trends,
and do not hesitate to embark upon bold internal business transformation
programs to reanchor the organization, and to reorient organization footprint to
capture new growth opportunities. Consolidation of real estate footprints, common
support functions along with business process blue printing to identify and
eliminate redundant processes are worth looking at.
- Technology Assimilation: Technology can ignite the spirit of innovation and help
reimagine business models. Drive internal productivity and efficiency across all
functions by leveraging technology deployment and digitization initiatives.
Business analytics supported by technology deployment, if designed thoughtfully,
can provide fresh insights and can be a great enabler in evolving pertinent growth
strategies and business models. Business can create new channels of effective
marketing communication, market penetration and customer experience by
harnessing social technologies. Technology have not really been given their fair
share in strategy discussions and it is high time we did so. Technology thinking and
architecture within organizations must evolve beyond their usage in
communication, storage, financial platforms. Encouragingly, there are some green
shoots seen in this area with business leaders taking notice of this lacunae in their
strategy making process.
5. 5
- Executive Decision Making & Leadership: Again, technology can play a pivotal
role in providing executives with specific and intuitive dashboards with lead / lag
indicators. It is high time we critically analyzed the outcome and impact of our
investment in time and money towards executive coaching. Executives must be
good at understanding the impact of political, market, policy, socio-economic, and
technology developments on their businesses. Which means demonstrating
excellence in one’s specific functional or technical domain alone is no longer
adequate. Corporate learning and development programs have a lot of catch up to
do as well so as to develop programs that develop targeted capabilities and
reinforce specific behaviors aligned to business needs, and must be tied down to
executive / leadership succession planning to address growth strategies and
forecasts over a five-year horizon.
Adopting an integrated approach towards Strategy Making & Execution, Business
Transformation, Technology Assimilation, and enhancing Executive Decision Making &
Leadership would help build required resilience and ingenuity within their
organization. It can help businesses to overcome market pricing challenges and deliver
on profitability commitments by leveraging productivity. It can help organizations
create sustainable value for their stakeholders even during tough times.
Subramanya Raja.V
Subramanya Raja.V is a Founder Director in Pearlstellar Business Management Pvt. Ltd. He is
a keen observer of global economy, business, technology, politics, and social affairs. His area of
expertise include strategy, operations excellence, organization design, leadership impact,
performance management, change management, and customer engagement. He is passionate
about collaborating with business leaders and chief executive officers in their endeavor to
improve business performance.