2013 May Capital Markets Monitor and Teleconference
Hot Markets, Cool Economies
Over the past six months, most equity markets worldwide have made substantial gains. While emerging market equities have underperformed in 2013, many U.S. equity indices (and Germany’s DAX) have recently reached new record highs. Bond yields have also fallen and credit spreads tightened, including for sovereign debt of troubled Euro Area countries.
The financial market rallies have been in response to mixed signs for economic growth—first quarter GDP data seem to disappoint everywhere including the U.S., China and even the feeble Euro Area—which have fed into expectations of further monetary easing in both mature and emerging market economies.
IIF CAIM raises concerns that proposed EU Financial Transaction Tax could hurt savers and pensioners
April 23, 2013 — The IIF’s Council on Asset and Investment Management (CAIM) today released a position paper on the proposed EU Financial Transaction Tax (FTT). CAIM raised concerns that any revenue potentially generated by the proposed FTT would be considerably outweighed by the potential costs in terms of burden on end-users of financial services, potentially weaker economic growth and job losses.
Private Sector and Public Sector Leaders meet in Washington for a Roundtable on International Capital Markets and Emerging Markets
April 21, 2013 — Senior public officials from both mature and emerging market economies, leaders from the private finance sector, and representatives from international financial institutions participated in a Roundtable discussion on International Capital Markets and Emerging Markets in Washington DC. The Roundtable has become over the last few years a major annual event, and a key forum for the exchange of views among key decision makers in both the public and private sectors on global policy issues and sovereign debt market developments.
Euro Briefing: The Post Solidarity Era
After a week of messy negotiations and flawed proposals, default and devaluation were avoided in Cyprus. Looking ahead, it remains to be seen whether the desire to pass the burden for financial support of the banking sector on to bank creditors is a new approach to be applied generally across the Euro Area, or a one-off solution to be applied just in the very special case of Cyprus.
Strengthening the Role of Long-Term Investors
January 28, 2013 — The IIF and Swiss Re released today a joint report featuring eight short briefings on issues and challenges facing the long-term investment community, including financial repression, regulatory changes, the EU financial transaction tax and infrastructure investment. Long-term investors play a pivotal role for the real economy as providers of risk capital – but also for the financial markets as stabilizers and shock absorbers. This timely report is intended to raise awareness of the need to strengthen the role of long-term investors.
Euro Briefing: The Challenge of Sustaining Improvement
Judging from the evolution of key financial variables, there has been steady progress in helping resolve the Euro Area debt crisis in recent months. For 2013, the main challenge will be that of sustaining improvement. For this to occur, region-wide growth needs to be re-established, alongside continued structural reforms and smooth implementation of the single supervisor.
The Role of Markets in Sovereign Debt Crisis Detection, Prevention and Resolution
January 8, 2013 — IIF First Deputy Managing Director Hung Tran today delivered a speech at the BIS Seminar “Sovereign Risk: A World Without Risk-Free Assets?” In his remarks, Hung Tran discussed the role of markets and market infrastructure in sovereign debt crisis detection, prevention, and resolution. Given the prospect of slow growth, large budget deficits and high public sector debt, Hung Tran noted that “the challenges of managing and resolving sovereign debt crises in many countries, including advanced economies, will be with us for some time to come.”