New bonds support Greek exit from bailout in 2018

2017 ◽  
Keyword(s):  
Financial Markets ◽  
Bond Markets ◽  
Open Market ◽  
Content Type ◽  
International Media ◽  
Track Record ◽  
Financing Costs ◽  
The Government ◽  
Greek Banks ◽  
Of Greece

Subject Greece’s return to bond markets. Significance After three years of market exclusion, the Greek state has issued five-year debt totalling 3 billion euros (3.5 billion dollars). The placement was hailed as success by the government and international media as the first step towards rebuilding Greece's track record in the open market. The new debt issue also solidifies hopes of Greece exiting its third bailout programme as planned in August 2018. As open market issuances carry greater financing costs than funding obtained from Eurogroup, the Greek government will largely use them to smooth the debt repayment profile and for publicity purposes. Impacts The return to financial markets represents a political victory for the Tsipras government. The successful new debt placement will improve the government’s negotiating position with international lenders. The government debt placement will establish a benchmark for further issuance from Greek banks and corporates.

US rates rift will fuel financial market volatility

2019 ◽  
Keyword(s):  
Financial Markets ◽  
Bond Markets ◽  
Open Market ◽  
Federal Open Market Committee ◽  
Content Type ◽  
Us Economy ◽  
China Trade ◽  
The Us ◽  
Investment Grade ◽  
Global Growth

Subject Financial markets outlook. Significance The decision of the US Federal Reserve (Fed) on September 18 to lower its main policy rate while not assuring investors that it will continue to loosen monetary policy is exposing divisions within the Federal Open Market Committee (FOMC), and between the Fed and bond markets. The ‘hawkish cut’ came with three dissensions, reflecting the disconnect between the resilient US economy and the deterioration in the global growth outlook. Impacts Cautious investor optimism that a US-China trade truce will be struck is fuelling US equity gains, but a substantial deal seems unlikely. The Brent oil price fell back within days following the drone attacks on Saudi Arabian oil facilities, but more short spikes are possible. Almost one-third of investment-grade government and corporate bonds are negative yielding; those with zero lifetime coupon are riskiest.

Emerging Securities Markets in China: Capitalism with Chinese Characteristics

1994 ◽  
Vol 140 ◽  
pp. 1105-1120 ◽  
Author(s):  
Solomon M. Karmel
Keyword(s):  
Securities Markets ◽  
Bond Markets ◽  
Private Ownership ◽  
Public And Private ◽  
International Media ◽  
Republic Of China ◽  
Chinese Characteristics ◽  
Funded Project ◽  
The Government ◽  
Means Of Production

The nascent stock and bond markets in the People's Republic of China have received considerable attention from the international media, yet the emergence of these markets is poorly understood. China's new “limited stock companies” increasingly answer to a variety of public and private lenders and spenders, who partially own and largely manage the means of production. The government sometimes decides which companies and managers will be rewarded with the benefits of incorporation, and it grabs a lion's share of the newly issued securities. But the result is a slow, government-led move towards a more capitalist form of management and ownership. This kind of jointly funded project – companies that merge public and private ownership, management and responsibility – may become the defining characteristic of China's emerging “capitalism with Chinese characteristics.”

Norway’s new government will favour continuity

2021 ◽  
Keyword(s):  
Financial Markets ◽  
Climate Policy ◽  
Energy Prices ◽  
Sovereign Wealth Fund ◽  
Content Type ◽  
The Core ◽  
Eu Membership ◽  
The Government

Significance The Labour, Centre and Socialist Left parties together hold a majority of parliamentary seats. Labour and Centre seem certain to form the core of the government; they might rule as a minority if they cannot bridge disagreements with the more radical Socialist Left over tax and climate policy. Impacts The election represents the best result for anti-EEA parties since Norway’s 1994 vote to reject EU membership. A sustained downturn in global financial markets could reduce the spending resources of Norway’s huge sovereign wealth fund. European demand for Norwegian gas will increase amid rising energy prices across Europe, partially caused by reduced production.

Political pressure mounts on Japanese media

2015 ◽  
Keyword(s):  
Prime Minister ◽  
Freedom Of Expression ◽  
Press Freedom ◽  
Political Pressure ◽  
Content Type ◽  
International Media ◽  
The Public ◽  
The Media ◽  
Near Term ◽  
The Government

Significance The issue of media independence has become a fraught one under Prime Minister Shinzo Abe's administration, with perceptions rising among journalists and the public that the government is subjecting the media to political pressure. Critics of the administration speak of censorship and threats to freedom of expression. Japan's ranking in the World Press Freedom Index has fallen from 22nd in 2011-12, before Abe took office, to 61st in 2015. Impacts The government seems likely to try to marginalise the criticisms of constitutional scholars, like it marginalises its other critics. International media as well as domestic journalists are likely to feel some pressure from the authorities. In the near term, the issue is unlikely to destabilise the government, or derail passage of security legislation.

Early Turkish elections could upset investor optimism

2017 ◽  
Keyword(s):  
Financial Markets ◽  
Developing Economies ◽  
Commodity Price ◽  
Bond Markets ◽  
Gradual Improvement ◽  
Content Type ◽  
Economic Fundamentals ◽  
Uncertain Outcome ◽  
The Us ◽  
Us Presidential Election

Subject The marked improvement in sentiment towards Turkish assets since mid-January. Significance Despite the uncertain outcome of Turkey’s crucial constitutional referendum on April 16, the lira has risen against the dollar while foreign investors have resumed their purchases of domestic Turkish debt, after months of heavy outflows from the local bond market. The sharp improvement in sentiment towards emerging markets (EMs) this year and the tightening in liquidity by the Central Bank (TCMB) are easing the strain on the country’s financial markets, despite significant domestic and external risks. Impacts Fears of a sharp sell-off in global bond markets following Donald Trump's victory in the US presidential election have not materialised. This is partly because aggressive monetary stimulus in Europe and Japan is continuing to suppress yields. Recent rising oil prices are sustaining the commodity price recovery that has underpinned improved sentiment towards EMs since 2016. EM currencies’ strong performance is partly due to gradual improvement in economic fundamentals in many developing economies.

Risk of Greek euro exit has risen but is still small

2015 ◽  
Keyword(s):  
Euro Area ◽  
Tourism Industry ◽  
Political Crisis ◽  
Content Type ◽  
Structural Problems ◽  
Current Contribution ◽  
Greek Economy ◽  
Greek Banks ◽  
Of Greece

Subject The prospects for Greek departure from the euro-area. Significance Since the political crisis of 2012, when the term 'Grexit' -- Greek exit from the euro -- was coined, the risk of such an eventuality has increased. The Greek economy would suffer enormous damage, while the euro-area would incur significant political and economic blows, including a contraction estimated at 1.5% of euro-area GDP, at the very least -- greater than the current contribution of the Greek economy. For Greece, a 20% contraction and a 50% erosion of average per capita income in euro terms are forecast. The new currency would be unlikely to promote exports, because of the high cost of imported machinery and intermediate goods, and the tourism industry would also be exposed to high inputs. Impacts Grexit would profoundly alter the economic and political profile of Greece, isolating it and shutting out external investment. Grexit would highlight persistent structural problems of Europe's monetary union, throwing doubt on its long-term soundness and viability. Membership reversibility implicitly reintroduces the notion of currency risk for the euro-area's most vulnerable peripheral countries. It would also destabilise such neighbours as Albania, Romania, Bulgaria and Serbia, where Greek banks have significant presence.

Plan to clear Greek banks’ bad debt looks feasible

2017 ◽  
Keyword(s):  
Commercial Banks ◽  
Bank Lending ◽  
Gdp Growth ◽  
Working Capital ◽  
Content Type ◽  
Loan Portfolios ◽  
Key Sectors ◽  
The Government ◽  
Greek Banks ◽  
Bad Debt

Subject Efforts to cleanse banks’ loan portfolios. Significance More than half of Greek bank lending is classed as ‘non-performing exposures’ (NPEs), constraining lending capacity and so putting negative pressure on GDP growth. The government says it should have a whole package of measures in place by mid-August to deal with NPEs. There have been slippages before, but this time the creditors are leaning very heavily on Athens to stick to the timetable. Impacts Bad debts will limit commercial banks’ capacity to make new loans to key sectors of the economy. This will have an adverse effect on working capital for existing businesses and their trade. Lack of liquidity will also slow new investments and construction.

Brazil impeachment battle will do short-term damage

2015 ◽  
Keyword(s):  
Financial Markets ◽  
First Year ◽  
Real Economy ◽  
Short Term ◽  
Content Type ◽  
The Real ◽  
The Government ◽  
Legal Grounds ◽  
Deep Recession ◽  
Foregone Conclusion

Significance This comes near the end of a tremendously challenging first year of Rousseff's second term, marked by collapsing popularity, mass protests and deep recession. However, impeachment is far from a foregone conclusion. The legal grounds are unclear and the government seems more likely than not to have enough congressional support to stave off the process. Indeed, the timing could increase the odds that Rousseff will complete her term. Impacts Financial markets will be especially volatile in the coming months. At best, a recovery in the real economy will not start before late 2016 or even 2017. Nevertheless, impeachment turbulence could gradually lead to more stable politics.

Inflation will worry but not derail financial markets

2021 ◽  
Keyword(s):  
Financial Markets ◽  
Federal Reserve ◽  
Bond Markets ◽  
Content Type ◽  
The Us ◽  
Sustained Increase

Significance The US Federal Reserve (Fed) is largely unperturbed by rising inflation. Bond markets concur, but some investors fear that this could prove complacent -- and costly. Impacts The price of bitcoin fell by 30% since mid-April to USD20,000, partly due to doubts of whether the token is maturing into a stable asset. US banking stocks have surged by over 70% since the vaccine breakthrough on average; strong first-quarter earnings will fuel further upside. Markets have confidence in the Fed, but investors’ fears of a more sustained increase in prices, and of the Fed falling behind, will rise.

High US government debt does not itself raise risks

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Financial Markets ◽  
Interest Rates ◽  
Federal Reserve ◽  
Government Debt ◽  
Business Investment ◽  
Content Type ◽  
Us Government ◽  
Deficit Spending ◽  
The Government

Significance Some economists are suggesting that, over the longer term, this could cause financial markets to stop buying US debt and charge prohibitively high rates, and cause the dollar to crash. Other economists argue that more deficit spending could fuel output and so keep relative debt levels in check. Impacts The government retirement trust funds will continue to be major buyers of government debt. In the recovery and beyond, financing the debt could raise private borrowing costs, reduce business investment and slow economic growth. High and rising debt might constrain policymakers in their ability to respond to unforeseen events. A higher debt path that boosts interest rates would give the Federal Reserve more flexibility in implementing monetary policy.

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