Greek recovery will attract institutional investors

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Financial Institutions ◽  
Capital Markets ◽  
Institutional Investors ◽  
Yield Curve ◽  
Strict Adherence ◽  
Content Type ◽  
Investor Confidence ◽  
The Way

Significance The new issue’s main purpose was to build up a benchmark yield curve to facilitate the sovereign’s future access to capital markets and, ultimately, pave the way for the broader participation of Greek corporates and financial institutions. Impacts Tightening EU monetary policy and/or adverse developments in EU peripheral economies should push Greek yields and spreads upwards. Investor confidence will hinge on the government’s strict adherence to reform and ability to resolve banks’ non-performing loans. The upcoming elections in Greece may destabilise the issuance schedule.

Cross-Border M&A is followed by cross-border investor relations

2016 ◽  
Vol 32 (9) ◽  
pp. 4-6
Author(s):  
Arsia Amir-Aslani ◽  
Philippe Lê ◽  
Mark Anthony Chanel
Keyword(s):  
Capital Markets ◽  
Design Methodology ◽  
Strategic Communication ◽  
Investor Relations ◽  
Short Term ◽  
Content Type ◽  
Investor Confidence ◽  
Cross Border ◽  
Biotechnology Sector

Purpose This paper aims to highlight the growing role of strategic communication in cross-border M&A in helping companies meet market expectations and investor confidence. Design/methodology/approach Viewpoint. Findings When all of the elements about a corporation that can possibly be compiled and projected and understood by the financial community, then that company can expect to compete successfully in the capital markets. Originality/value Communicating the value of R&D programs and their short/term goals has not been extensively covered for the biotechnology sector.

Indonesian reform plans may boost economy longer-term

2015 ◽  
Keyword(s):  
Monetary Policy ◽  
Financial Market ◽  
Foreign Investment ◽  
Institutional Reform ◽  
Market Volatility ◽  
Power Balance ◽  
Gdp Growth ◽  
Infrastructure Development ◽  
Content Type ◽  
Investor Confidence

Subject Jokowi's reform packages. Significance President Joko 'Jokowi' Widodo last week announced the first of three economic packages designed to re-invigorate the economy and attract foreign investment. The remaining two packages will be announced later this month and in November respectively. Similar packages have been devised by past administrations, but to little effect. To gain investor confidence, Jokowi will need to specify how his administration intends to implement its plans. Impacts Financial market volatility will continue until US monetary policy begins to normalise (probably no earlier than December). The power balance in Jokowi's cabinet militates against institutional reform. Policies to boost infrastructure development promise longer-term gain, but little boost to 2015 GDP growth.

The monitoring role of institutional investors

2019 ◽  
Vol 36 (4) ◽  
pp. 517-546 ◽  
Author(s):  
Xiaoqiong Wang ◽  
Siqi Wei
Keyword(s):  
Financial Institutions ◽  
Institutional Investors ◽  
Empirical Support ◽  
Two Dimensions ◽  
Geographical Proximity ◽  
Investment Horizon ◽  
Corporate Policies ◽  
Content Type ◽  
Corporate Decisions

Purpose This paper aims to examine the monitoring role of institutional investors in corporate decision-making by classifying financial institutions based on geographical proximity and investment horizon from 1980 to 2014. Design/methodology/approach By using unique data sets on firm and institution location and investor horizon measure (Gaspar et al., 2005), the authors categorize institutional investors into six proximity-horizon classifications. This method captures the heterogeneity of investors. The corporate decisions assessed include firm investment, financing, payout policy, misbehavior, takeover defenses and profitability. Findings Both geographical proximity and investment horizon are directly related to institutional investors' monitoring cost. As a result, the effectiveness of institutional monitoring may vary based on geographical proximity and investment horizon. This paper collectively examines both dimensions of financial institutions and provides evidence that institutional investors present different preferences for corporate policies. Given stronger information advantage, both local and nonlocal investors that are long-term oriented fulfill better roles in monitoring corporate decisions but from different perspectives. Research limitations/implications Different from previous studies that treat institutional investors homogeneously, this paper provides empirical support that investors are indeed different in influencing firm policies. Originality/value To the authors’ best knowledge, this is the first study that classifies investors based on two dimensions, geographical proximity and investment horizon, and examines their joint effects on corporate policies. This proximity-horizon classification allows the authors to better disentangle the effects of institutional ownership structure on the monitoring outcomes.

Cabinet chaos raises junk status risk for South Africa

2015 ◽  
Keyword(s):  
Higher Education ◽  
South Africa ◽  
Monetary Policy ◽  
Federal Reserve ◽  
Content Type ◽  
Student Protests ◽  
Investor Confidence ◽  
The Us ◽  
Intelligence Agencies

Significance He replaces the little known David van Rooyen, who had been in post for only four days following the axing of technocrat Nhlanhla Nene. The nature of the latter's removal shook investor confidence unprecedentedly for post-apartheid South Africa. Impacts Economic turmoil caused by Nene's axing could embolden ANC factions pushing for Zuma to resign before the next poll in 2019. However, Zuma may use his hold on the intelligence agencies to undermine opponents, eg by uncovering personal scandals. Expected monetary policy tightening by the US Federal Reserve will likely undermine any rand appreciation caused by Gordhan's appointment. Recent student protests could encourage Zuma to dismiss Higher Education Minister Blade Nzimande, weakening the SACP.

Game theory and sovereign wealth funds

2014 ◽  
Vol 22 (1) ◽  
pp. 61-76 ◽  
Author(s):  
Harry McVea ◽  
Nicholas Charalambu
Keyword(s):  
Game Theory ◽  
Capital Markets ◽  
Design Methodology ◽  
Soft Law ◽  
Theory Analysis ◽  
International Consensus ◽  
Sovereign Wealth Funds ◽  
Content Type ◽  
Regulatory Strategy ◽  
The Way

Purpose – The purpose of this article is to assess strategies available to recipient states for managing the putative risks posed by sovereign wealth funds (SWFs) in the context of global, liberalized, and capital markets. Design/methodology/approach – The paper employs a game theory analysis in assessing these risks. Four basic scenarios are outlined whereby recipient states may interact with SWFs: “unselfish recipient state – unselfish SWF” (Option 1); “unselfish recipient state – Selfish SWF” (Option 2); “Selfish Recipient State – unselfish SWF” (Option 3); and “Selfish Recipient State – Selfish SWF” (Option 4). Findings – In the light of this analysis, and the balance of risks which the authors perceive recipient states are exposed to in practice, the authors claim that recipient states ought, rationally, to adopt a selfish regulatory strategy irrespective of the strategy which SWFs adopt in practice. Originality/value – This claim does not deny the importance of voluntary international measures – such as the “Santiago principles” – in the way SWFs are regulated. Rather, it seeks to show that according to a game theory analysis, and an attempted application of that analysis in practice, undue reliance by recipient states on international “soft law” regulatory initiatives to regulate SWF activity (which constitutes the current international consensus) is strategically unwise.

scholarly journals Corporate citizenship, stakeholder management and Sustainable Development Goals (SDGs) in financial institutions and capital markets

2020 ◽  
Vol 4 (1) ◽  
pp. 47-59
Author(s):  
Jacob Dahl Rendtorff
Keyword(s):  
Sustainable Development ◽  
Business Ethics ◽  
Financial Institutions ◽  
Capital Markets ◽  
Sustainable Development Goals ◽  
Stakeholder Management ◽  
Corporate Citizenship ◽  
Business And Society ◽  
Content Type ◽  
Development Goals

PurposeThe aim of this theoretical and conceptual research paper is to give a definition of the concept of corporate citizenship, which together with business ethics and stakeholder management function as foundation of a vision of the UN Sustainable Development Goals (SDGs) for financial institutions and capital markets.Design/methodology/approachThis paper is based on a conceptual methodology which analyzes the main aspects of corporate citizenship with regard stakeholder management and the UN SDGs. In particular there is focus on stakeholder justice, integrity and fairness with regard to stakeholder responsibility at capital markets.FindingsThis paper suggests that concepts of corporate citizenship, business ethics, stakeholder justice, integrity and fairness, as well as stakeholder responsibility must be conceived as the basis for an acceptable vision of sustainable development at capital markets.Research limitations/implicationsThis paper is a theoretical paper so the paper is limited to the presentation of major concepts from the point of view of business ethics, stakeholder management and SDGs. This is a framework that needs to be developed in specific research and investment practice at capital markets.Practical implicationsThis paper provides the basis for developing a good vision of SDGs in financial institutions and capital markets and it demonstrates that the SDGs must be developed as the foundation of ethics of investments and capital markets.Social implicationsWith suggestions of visions of corporate citizenship, business ethics and stakeholder management this paper situates the firm in a social context as a social actor in the context of sustainable development. The business firm is therefore integrated in society and there is a close connection between business and society which needs to be developed in codes and values of ethics of financial institutions capital markets.Originality/valueThe originality and value of this paper is a conceptual formulation of the relation between the concepts of corporate citizenship, business ethics, stakeholder management and SDGs in financial markets. With this the paper refers to earlier research and summarizes concepts from this in a short synthesis.

The Effects of Yield Control Monetary Policy: A Helicopter Money Drop to Financial Institutions

2020 ◽  
Vol 10 (01) ◽  
pp. 2050004
Author(s):  
Robert Jarrow ◽  
Sujan Lamichhane
Keyword(s):  
Monetary Policy ◽  
Financial Institutions ◽  
Yield Curve ◽  
Bond Market ◽  
Government Bond ◽  
Wealth Transfer ◽  
Bank Of Japan ◽  
Arbitrage Strategy ◽  
Arbitrage Opportunity ◽  
Free Government

On 21st September, 2016, the Bank of Japan (BOJ) embarked on a new unconventional monetary policy called yield curve control (YCC). We show that YCC creates an arbitrage opportunity in an otherwise frictionless and arbitrage-free government bond market which financial institutions can exploit. This arbitrage creates a wealth transfer from the BOJ to these financial institutions. We estimate the lower bound on this wealth transfer for the first 28 months to be $5.25 billion or [Formula: see text]582.32 billion, which constitutes an unexplored policy externality. This corresponds to 7.49% per annum on the notional employed in this arbitrage strategy.

Controlling Household Credit

1988 ◽  
Vol 125 ◽  
pp. 46-55
Author(s):  
Jon Shields
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Financial Institutions ◽  
Balance Sheets ◽  
Household Credit ◽  
The Way

It is often postulated that the reintroduction of credit controls would be neither effective nor politically possible. Major changes have been implemented over the last eight years both in the way that financial markets work (domestically and internationally) and in the conduct of monetary policy. Controls over either the size of the balance sheets of financial institutions or the terms under which customers can obtain loans would seem to run totally counter to these developments. Does this rule them out completely?

scholarly journals Regional house price cycles in the UK, 1978-2012: a Markov switching VAR

2014 ◽  
Vol 7 (3) ◽  
pp. 345-366 ◽  
Author(s):  
Rosen Azad Chowdhury ◽  
Duncan Maclennan
Keyword(s):  
Monetary Policy ◽  
Housing Market ◽  
Housing Policy ◽  
Markov Switching ◽  
House Price ◽  
Empirical Work ◽  
Extensive Literature ◽  
Content Type ◽  
The Impact ◽  
The Way

Purpose – This paper aims to use Markov switching vector auto regression (MSVAR) methods to examine UK house price cycles in UK regions at NUTS1 level. There is extensive literature on UK regional house price dynamics, yet empirical work focusing on the duration and magnitude of regional housing cycles has received little attention. The research findings indicate that the regional structure of UK exhibits that UK house price changes are best described as two large groups of regions with marked differences in the amplitude and duration of the cyclical regimes between the two groups. Design/methodology/approach – MSVAR principal component analysis NUTS1 data are used. Findings – The housing cycles can be divided into two super regions based on magnitude, duration and the way they behave during recession, boom and sluggish periods. A north-south divide, a uniform housing policy and a monetary policy increase the diversion among the regions. Research limitations/implications – Markov switching needs high-frequency data and long time spans. Practical implications – Questions a uniform housing policy in a heterogeneous housing market. Questions the impact of monetary policy on a heterogeneous housing market. The way the recovery of the housing market varies among regions depends on regional economic performance, housing market structure and the labour market. House price convergence, beta-convergence. Originality/value – No such work has been done looking at duration and magnitude of regional housing cycles. A new econometric method was used.

Time-varying response of treasury yields to monetary policy shocks

2019 ◽  
Vol 27 (4) ◽  
pp. 422-442
Author(s):  
Lassaâd Mbarek ◽  
Hardik A. Marfatia ◽  
Sonja Juko
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Yield Curve ◽  
Time Varying ◽  
Monetary Policy Shocks ◽  
Content Type ◽  
Treasury Bond ◽  
Policy Shocks ◽  
Monetary Policy Effectiveness ◽  
The Impact

Purpose This paper aims to examine the Treasury bond yields response to monetary policy shocks in Tunisia under a heterogeneous economic environment. Design/methodology/approach Using a traditional fixed coefficient model, the impact of monetary policy changes on the term structure of interest rates for the whole period from January 2006 to December 2016 is estimated first. Then the stability of this relationship by distinguishing two sub-periods around the revolution of January 2011 is studies. To investigate how the relationship between the monetary policy and the Treasury yield curve evolves over time, a time-varying parameter model is estimated. Findings The results show that the impact of monetary policy is more pronounced at the short end of the yield curve relative to the longer end. Furthermore, this impact declines significantly across all maturities following the revolution and exhibits wide time variation. This evidence supports the negative influence of high levels of uncertainty on monetary policy effectiveness and highlights the desirability of more active monetary policy, especially in turbulent environment. Research limitations/implications The impact of uncertainty on the effectiveness of monetary policy shocks needs to be explored further in future research to understand the structural sources of uncertainty and their dynamic interactions with monetary policy and risk aversion in asset markets. Practical implications A more active role of the central bank to influence the yield curve mainly through Treasury bond purchases covering medium and long maturities may be warranted. Communication also needs to be reinforced to ensure predictability of the monetary policy stance. Originality/value This paper extends the empirical literature on the pass-through of monetary policy to interest rates for an emerging country in context of transition by estimating a state-space model to test the time-varying behavior and examine the influence of increased economic uncertainty on monetary policy effectiveness.

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