Entries for 'Central Banks'

As part of our new line of sustainability-themed research, we are launching a series of short "back-to-basics" notes, aiming to bring some clarity to the complex ecosystem of climate data, risk assessment methodologies, taxonomy and reporting. Our Sustainable Finance Pyramid sets out a framework of "building blocks" for the assessment of climate-related risks—and opportunities.  This toolkit supports effective disclosure—vital for regulators, policymakers and investors. 

The February U.S. Regulatory Update covers the Federal Reserve’s new proposed supervisory approach, the revised Volcker Rule covered funds proposal, the 2019 Financial Stability Oversight Council report, and more, along with Congressional updates and hearings summaries. 

The September U.S. Regulatory Update covers the Fed’s updated stress capital buffer proposal, announcement of a real-time payment system, and September Beige Book, in addition to a preview of Congressional priorities this fall regarding banking, fintech, and anti-money laundering legislation. 

Central banks poised for easing as clouds gather over the global growth and earnings outlook; Policy uncertainty remains a key risk with no-deal Brexit and potential U.S. FX intervention in the spotlight ; China accelerates market opening for foreign investors in a bid to stoke growth and ease trade tensions; Leveraged loan issuance is over 50% below H118 levels; lower global rates reduce the appeal of floating-rate securities; Who holds leveraged loans? Institutional investors may have significant exposure via collateralized loan obligations (CLOs)    

Disconnect between Fed dots and market rate expectations set to persist; Negative-yielding debt hits a record high of over $12 trillion—putting the risk of asset price bubbles in focus; Further USD strength could pose significant challenges for non-bank borrowers in emerging markets and mature markets outside the U.S.; More monetary stimulus would widen the gap between the cost of equity and debt, triggering another sharp accumulation in corporate debt; Robust growth in Panda bond issuance 

The June 2019 IIF Global Regulatory Update provides updates on Advocacy on Addressing Market Fragmentation, Evaluation of Too-Big-To-Fail (TBTF) Reforms and the Basel III Finalization & Cumulative Capital Impact Study.

Our U.S. Regulatory Update covers the Federal Reserve’s proposals on FBO requirements, FSOC’s proposed changes to nonbank designations, the NAIC International Forum, and Capitol Hill updates, among other topics. 

The May 2019 IIF Global Regulatory Update provides updates on the Financial Stability Board along with current work streams in Regulatory Capital, Cyber Security, Digital Finance, Accounting, Sustainable Finance, Systemic Risk, Insurance and upcoming events. 

Steady Fed gives sense of balanced risks: “healthy” U.S. economic trajectory, potential inflation rise towards 2%; Frontier market debt growing quickly — total outstanding $3.2 trillion — sovereign defaults low (for now); Green and sustainability-linked lending nearly doubles in 2018 – now almost $100 billion outstanding; LIBOR transition fraught with risks — linked to contract maturity profiles, spreads to new benchmarks

EM assets have enjoyed tailwinds—more dovish Fed/ECB, better growth prospects, attractive valuations… but recent dollar strength and higher oil prices highlight risks ahead; Non-financial corporate EM FX debt up by over $2 trillion since 2009, pushing total EM FX debt to $5.3 trillion; High levels of dollarization reflect declining consumer confidence in Turkey and Argentina

Markets reassess chances for a Fed rate cut this year amid more optimism on trade talks, Chinese growth; Policy backdrop feeds into asset valuation in emerging markets; China may be taking a break from deleveraging, but non-financial corporate debt is still over 150% of GDP and at over 50% of GDP, household debt in China is well above the EM average—and growing strongly

Declining equity risk premia mirror the Fed’s dovish turn in 2019—but how much further can risk-on run?; Angels falling: more U.S. issuers are at the lower end of investment grade (BBB)—and taking on more debt; More vulnerable: small unrated U.S. non-financial corporates have racked up a hefty $1.13 trillion in debt; To call or not to call: $110 billion in CoCos are redeemable through 2020

Return to low volatility has underpinned the risk rally, but a less-dovish Fed could hurt; Term premium compression again—bond markets to the rescue?; MiFID II ushers in a decline in turnover, shift towards cheaper ETFs in the EU; Older Americans shoulder a growing burden of student loan debt 

Sharp improvement in risk appetite reflects improved valuations as well as more supportive Fed policy; As new U.S. sanctions take hold, holders of Venezuelan bonds contemplate next steps; Wobbles in the leveraged loan market; millennials give a boost to U.S. commercial real estate; ESG index performance—doing good doesn’t mean giving up returns, especially in emerging markets!

After a burst of strength in 2017-18, momentum in U.S. corporate earnings and sales shows signs of fading; Growing pressure on profitability for global systemically important banks; Despite higher hedging costs, safe-haven demand continues to support foreign buying of U.S. Treasuries; Emerging market central banks load up on gold, looking to build precautionary buffers