Press Release
April 27, 2015

The Institute of International Finance today announced that Martin Boer has been named Director of the Regulatory Affairs Department effective May 1st.

Boer recently served as the Secretary General of the European Financial Services Round Table, a Brussels based industry organization comprising the CEO’s and Chairmen of Europe’s 22 leading banks and insurance companies.

Press Release
April 23, 2015

This year has not started as well as hoped. Activity data have disappointed in 2015Q1 and business confidence has deteriorated, leading the Institute of International Finance to revise down its global growth forecast to 2.8 percent for the year, unchanged from 2014.

“The headline message of our updated outlook is again one of disappointed hopes. Global growth looks to have fallen to 2 percent in the first quarter, the lowest rate since 2014Q1,” said Charles Collyns, chief economist at the IIF. “We do still expect a growth to strengthen into 2016, but we are concerned that the global economy could remain under strain. Our biggest concerns are that supply-side problems could prompt an abrupt upward shift in the expected trajectory of Fed lift-off and the possibility of a steep growth slowdown in China.” 

Press Release
April 15, 2015

Washington, D.C., April 15, 2015— The economic implications of lifting sanctions on Iran as a result of a final agreement between Iran and the P5+1 countries would be enormous but would take about a year to be felt in full, according to a new research note by the Institute of International Finance.

“The economic implications for Iran of reintegration into the global economy would be enormous,” said Garbis Iradian, chief economist for the Middle East and North Africa at the IIF. “It would spur a sharp economic recovery with a rise in oil exports, regained access to frozen foreign assets, and sizeable foreign capital inflows.”

Press Release
April 15, 2015

Washington, D.C., April 15, 2015—Reduced secondary bond market liquidity in the context of a sustained low-rate environment could pose serious risks for the financial system, noted the Institute of International Finance in a letter to the International Monetary Fund and World Bank ahead of their Spring Meetings.

“In the wake of both regulatory and market developments that have changed the economics of market-making, market depth and liquidity have deteriorated—a problem that is not yet fully recognized or understood,” wrote the IIF. “While reducing risk in the banking sector has been an important and intended consequence of regulatory reform, the resulting reduction in market liquidity goes far beyond banks.”

Press Release
April 9, 2015

Washington, D.C., April 9, 2015—The European Central Bank Governing Council will be faced with both good news and bad news leading into its next monetary policy meeting on April 15, according to the IIF’s updated version of “Draghi’s Dashboard”.

“The good news is that financial variables overall have held up well since the last meeting in early March with our financial variables staying firmly in ‘green’ territory”, said Felix Huefner, chief economist of global macroeconomic analysis at the IIF. “Even better news is that the real economy has shown further signs of improvement since last month. The bad news is that the monetary stimulus has yet to be reflected in any improvement in inflation indicators. Our inflation sub-index remains firmly in ‘red’ territory.”

Press Release
April 8, 2015

Washington, D.C., April 7, 2015—Emerging market GDP may have grown in Q1 at its weakest pace since early 2009, according to the March update of the IIF’s EM Coincident Indicator. The IIF estimates that the EM Coincident Indicator (EMCI) declined markedly in March to 1.8 percent, continuing the weakening trend of past months.

“Aggregate EM activity weakened sharply in Q1,” said Charles Collyns, chief economist at the IIF.” Hard data were generally disappointing although the recent stabilization in financial market conditions provides a glimmer of hope.”

Press Release
April 2, 2015

Washington, D.C., April 2, 2015—Global mutual fund and ETF investors reduced exposure to  emerging market equities and fixed income securities in March, according to the IIF’s latest Trends in Invesment Fund Portfolio Allocation. 

“The strength of the U.S. dollar and uncertainty about how—and when—the Fed will engineer an increase in the Fed funds rate is keeping all eyes on emerging markets.  In March, portfolio allocations to emerging market assets were reduced to their lowest level since 2009, while global investors increased allocations to U.S. bonds and Euro Area equities,” said Sonja Gibbs, director of capital markets and emerging markets policy at the IIF. “However, while overall allocations to emerging market assets have fallen, we are seeing continued differentiation—India, Indonesia, and the Philippines have seen big increases in portfolio allocations during the first quarter of 2015, while weightings for Brazil, Russia, and Mexico have declined.”

Press Release
April 1, 2015

Washington, D.C., April 1, 2015— Uncertainty about how and when the Fed will engineer an increase in the Fed funds rate has led to a notable rise in volatility in the U.S. rate market, according to two new research notes by the Institute of International Finance.

In this month’s CMM Key Issues, the IIF noted that corporate sectors in many emerging market countries now have significant USD liabilities, in both bank loans and bonds.  While some of this exposure may be effectively hedged, a number of EM countries are likely to face daunting debt servicing and refinancing risks in the next few years.

“Against this backdrop, and with further U.S. dollar strength in prospect, portfolio capital flows to emerging markets have been subdued—but with a high degree of differentiation” said Hung Tran, executive managing director at the IIF. “EM countries that have implemented sensible macroeconomic policies with a reasonable reform agenda to boost economic potential have been much more resilient—good policy pays off.”

Press Release
March 26, 2015

Portfolio flows to emerging markets continued at a below-trend pace of $16 billion in March, nearly unchanged from the prior month, according to the latest EM Portfolio Flows Tracker by the Institute of International Finance.

"Portfolio flows have responded strongly to shifts in the outlook for Fed tightening later this year," said Charles Collyns, chief economist at the IIF. "After weak inflows in the first few weeks of March, emerging markets have benefitted from dovish signals by the Fed following the March FOMC meeting."

Press Release
March 16, 2015

The slump in oil prices will present challenges and opportunities for the Middle East and North Africa (MENA), according to the latest regional report by the Institute of International Finance (IIF).

"While overall growth in the oil exporting countries will moderate and their large fiscal surpluses will decline or shift to significant deficits, low oil prices may encourage these countries to accelerate and deepen structural reform efforts to improve energy efficiency and diversify their economies," said George Abed, senior counselor and director for Africa and the Middle East." Non-oil exporting countries in the region will benefit from the fall in oil prices through reduced oil import bills and lower fuel subsidies."

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