Emerging market GDP growth weakened further from its subdued pace of 3.6 percent in Q4 according to the January update of the IIF’s EM Coincident Indicator. The IIF reported that the EMCI declined in January to 3.2 percent.
“Signs that growth is continuing to slow in emerging markets is definitely a worry," said Charles Collyns, Chief Economist at the IIF. "Momentum seems to be picking up in advanced economies, but the benefits have yet to spread very far."
Divergence in G4 monetary policies has heightened uncertainty and market volatility that will likely persist, if not increase, as political tensions are on the rise, according to the Institute of International Finance's February Capital Markets Monitor.
"The ECB's comprehensive QE program has brought to the fore the challenges posed by the ECB and BoJ easing moves," said Hung Tran, executive managing director at the IIF. "Other countries will either need to match these easing measures, or see their currencies strengthen against the euro and the yen. This fresh wave of QE will prolong a world of plentiful liquidity and zero or negative interest rates more than six years after the financial crisis."
The Institute of International Finance today published its 2015 calendar of accredited IIF global training programs.
Twenty-nine courses will be held in financial centers around the world. Courses include the IIF's flagship executive programs and the newly added topic-driven, one-day global trainings.
Course topics will include risk management, corporate governance, accountancy, banking and insurance prudential regulation, and key issues facing the asset management, private banking and wealth management industries.
The Institute of International Finance today announced the IIF Future Leaders Class of 2015.
“The future of our industry will be determined, in part, by those who lead it,” said Tim Adams, president and CEO of the IIF. “Our Future Leaders program is meant to bring some of the brightest emerging talent in the industry together with current leaders to discuss pressing issues and to learn from one another.”
Bank lending conditions in emerging economies continued to tighten in 2014Q4 as deteriorating funding conditions offset stronger loan demand, according to the latest Emerging Markets Bank Lending Conditions Survey from the Institute of International Finance.
"Even as demand for bank lending has risen, the supply-side has weakened as the financial market volatility in the fourth quarter of last year weighed on bank funding conditions," said Charles Collyns, chief economist at the IIF.
The Institute of International Finance today released the following statement following a meeting of the IIF Board of Directors in Zurich, Switzerland:
“The IIF Board of Directors endorses the standard aggregated collective action clauses and pari passu clauses for the terms and conditions of sovereign notes released by the International Capital Market Association in August 2014. The IIF encourages its members to promote the use of these proposed terms in sovereign debt contracts.”
Capital flows to emerging markets will decline further in 2015, as the Fed starts to raise policy rates and emerging market growth remains lackluster, according to the IIF’s January report on Capital Flows to Emerging Markets.
The IIF estimated that total private non-resident capital flows to emerging markets fell by $250 billion last year from an all-time high of $1.35 trillion in 2013, to just under $1.1 trillion in 2014. The IIF said that the decline was accounted for by a collapse in flows to Russia triggered by the Russia-Ukraine conflict, but portfolio flows were affected more generally by episodes of risk aversion, notably in the fourth quarter.
Emerging market GDP growth slowed to an estimated 3.6 percent for Q4 in 2014 according to the December update of the IIF’s EM Coincident Indicator. The IIF estimated Q3 growth at 4.1 percent.
“Following a modest acceleration in Q2 and Q3, aggregate EM growth retreated toward the end of the year. Emerging markets have not yet shown much benefit from the recent strong growth in the U.S. or the sharp drop in oil prices,” said Charles Collyns, chief economist at the IIF. “In fact, further falls in commodity prices over recent weeks suggest continued EM slowdown as we move into January.”
The collapse in oil prices and heightened political uncertainty will continue to reverberate throughout the global economy in 2015, according to the Institute of International Finance’s January Capital Markets Monitor.
The IIF noted that these forces are set to reinforce the divergent trends leading towards a bifurcated global economy, with important implications for financial markets. One clear consequence has been heightened concern about global growth prospects in a disinflationary environment.