The IIF’s key observations and takeaways from the fourth Singapore FinTech Festival, held November 11-15. 

ECB tiering—how much help for Europe’s banks?; Low rates spur institutional investors’ appetite for alternatives—now over 25% of U.S. public pension fund allocations; Shift towards renewable energy continues to grow—but there’s a long road ahead; Many major emerging markets remain heavily reliant on coal for power generation—notably South Africa, China and India    

The November 2019 IIF Global Regulatory Update provides updates on the Financial Stability Board along with current work streams in Regulatory Capital, Recovery and Resolution, Disclosure, Risk Management, Cyber Security, Digital Finance, Sustainable Finance, AML/CFT, Insurance and upcoming events. 

Russian authorities announced a policy pivot towards growth. National projects exceed 3% of GDP per year over 2019-24. Apart from national projects, policies will likely remain tight. We therefore expect only a modest pickup in Russia’s growth.

Lebanon's capital controls may avert short-term crisis. Yet they can pose a long-term cost by discouraging inflows, which play a pivotal role in the country's economic model. Timely formation of a new government with a strong commitment to reform can boost confidence and enable removal of controls. 

Global debt has topped $250 trillion—320% of GDP; emerging market debt hits a new record of $71.4 trillion (220% of GDP); With limited room for further monetary easing, debt service costs will be an increasing constraint on fiscal policy; Climate change is driving significant reallocation in investor portfolios; high-debt countries will have a much harder time coming up with funding to address climate risks; USD hovering at record highs despite Fed rate cuts this year: persistent growth in demand for U.S. liquidity as dollar debt across EM and mature markets (ex-U.S.) hits record highs.  Non-U.S. banks are increasingly reliant on USD funding.

Global debt surged by $7.5 trillion in H1 2019, hitting a new record of over $250 trillion. With no sign of a slowdown, we expect the global debt load to exceed $255 trillion in 2019—largely driven by the U.S. and China.

Weak growth has led to deteriorating debt dynamics in recent years. Falling business and consumer confidence do not point to a recovery. External imbalances remain despite weak activity and depreciation. Interest payments to non-residents have risen sharply due to high debt. The Rand is vulnerable to shifts in market sentiment and portfolio flows.