Policy concerns will keep Turkish lira under strain

2021 ◽  
Keyword(s):  
Central Banks ◽  
Fourth Quarter ◽  
Economic Recovery ◽  
Corporate Debt ◽  
Economic Stability ◽  
Lower Growth ◽  
Content Type ◽  
Risk Appetite ◽  
Service Sectors ◽  
Turkish Lira

Significance Mounting concerns that a faster-than-expected global economic recovery from the COVID-19 pandemic will spur inflation, forcing the leading central banks to signal an earlier-than-expected withdrawal of monetary stimulus, have contributed to renewed pressure on the lira. Although Turkey is less vulnerable than it was in 2013, it is still acutely susceptible to a sharp deterioration in risk appetite. Impacts Policy tightening in the fourth quarter will probably be reflected in lower growth in the current and later quarters. Provided the coronavirus threat fades and vaccination proceeds apace, the prospects for tourism and some service sectors will improve. Base effects and financial and economic stability may allow growth of 3-5% in 2021, despite lira volatility and high corporate debt levels.

Negative bond yields will fuel global equity rally

2016 ◽  
Keyword(s):  
Stock Market ◽  
Sovereign Debt ◽  
Asset Prices ◽  
Central Banks ◽  
Oil Price ◽  
Bond Yields ◽  
Fiscal Stimulus ◽  
Government Bonds ◽  
Content Type ◽  
Risk Appetite

Significance The gains in global equities stem from the expanding universe of negative-yielding government bonds, which now account for nearly a third of the stock of global sovereign debt. This is pushing yield-hungry investors into riskier assets, despite concerns about the sustainability of a stock market rally with weak fundamental underpinnings and central banks' ultra-loose policies driving asset prices. Impacts Sterling will remain under pressure because of the BoE's aggressive monetary easing, both conventional and unconventional. The recent oil price rebound will support equity valuations and risk appetite. Fiscal stimulus will benefit stocks in the construction and defence sectors.

COVID-19 strengthens EU drive for economic sovereignty

2020 ◽  
Keyword(s):  
Private Sector ◽  
Supply Chains ◽  
Public Investment ◽  
Economic Recovery ◽  
European Politics ◽  
Economic Stability ◽  
Content Type ◽  
Consensus View ◽  
Pharmaceutical Production ◽  
The Eu

Subject EU economic sovereignty. Significance COVID-19 is increasing momentum within the EU to enhance the bloc’s economic and strategic sovereignty by substantially reducing dependence on non-EU powers, particularly China. While the immediate concern is to become more self-sufficient in medical and pharmaceutical production, leaders are also set on strengthening European sovereignty in critical sectors including technology and automobiles. Impacts A strong economic recovery will be important in determining an EU consensus view concerning the bloc’s main economic competitors. Public investment in the private sector will provide greater economic stability, but more state influence on supply chains and investments. Scepticism of China will become a growing feature in European politics.

Prospects for Russia in the fourth quarter

2015 ◽  
Keyword(s):  
International Relations ◽  
Fourth Quarter ◽  
Oil Price ◽  
Economic Recovery ◽  
Political Control ◽  
Economic Uncertainty ◽  
Content Type

Subject Prospects for Russia in the fourth quarter. Significance Russia finds itself facing increasing economic uncertainty and geopolitical tensions. However, to generate sustained economic recovery, Moscow needs both a higher global oil price and a resolution to the situation in Ukraine that will lift sanctions. Meanwhile, the Kremlin is extending its domestic political control ahead of next year's elections and recalibrating its international relations east and south.

Calls to bolster central bank legitimacy will grow

2021 ◽  
Keyword(s):  
Risk Management ◽  
Central Bank ◽  
Central Banks ◽  
Economic Recovery ◽  
The Political ◽  
Economic Risk ◽  
Content Type ◽  
Political Realm

Significance While credited with avoiding financial and economic catastrophe, central banks have been criticised for intruding into the political realm, for example, by picking winners and exacerbating unequal distributions of income and wealth. Impacts Progress will require politicians and legislatures seriously to address the institutional and political problems of central bank policy. The apparent success of expanding central bank activity could encourage Western governments to further outsource some responsibilities. Political populism during the economic recovery may push central banks to bow more to political exigencies over economic risk management.

OPEC+ cuts to hit Russian external surplus into 2021

2020 ◽  
Keyword(s):  
Foreign Investment ◽  
Fourth Quarter ◽  
Economic Recovery ◽  
Private Capital ◽  
Productive Capacity ◽  
Russian Government ◽  
Government Bonds ◽  
Foreign Investors ◽  
Content Type

Significance Foreign investment slowed, private capital flowed out and geopolitical risk and ruble depreciation dented foreign investors' appetite for Russian government bonds. Impacts The economic recovery expected to start in the fourth quarter is likely to be undermined by an unconstrained rise in COVID-19 infections. Ruble weakness is contributing to inflation, though this may be temporary as disinflationary forces are strong. Ruble depreciation is raising the prices of imported machinery, deterring investment in productive capacity.

Belgian unity is at stake under new government

2020 ◽  
Keyword(s):  
Prime Minister ◽  
Fourth Quarter ◽  
Economic Recovery ◽  
Content Type ◽  
Defence Spending ◽  
Second Wave

Significance The coalition, headed by Prime Minister Alexander De Croo, consists of seven parties from Green, liberal, socialist and fiscally conservative backgrounds. The main challenges will be finding a united and sustainable approach to handling the COVID-19 crisis and reversing support for Flemish nationalism. Impacts The second wave of COVID-19 restrictions make a strong economic recovery in the fourth quarter unlikely. Owing to budgetary constraints, defence spending, currently below 1% of GDP, will not get close to the 2% NATO target by 2024. The absence of the New Flemish Alliance (N-VA) from the coalition will make it easier for Belgium to agree to EU proposals on immigration.

High corporate debt risks Brazil's post-COVID recovery

2021 ◽  
Keyword(s):  
Interest Rates ◽  
Capital Markets ◽  
Small Businesses ◽  
Government Support ◽  
Economic Recovery ◽  
Corporate Debt ◽  
Small Companies ◽  
Content Type ◽  
Debt Issuance ◽  
The Impact

Significance Small companies have been the most affected. Government programmes have supplied credit but struggled to channel funds to the neediest companies, especially at the beginning of the pandemic last year. Large companies, although remaining the major credit borrowers, have also accessed funding via debt issuance and stock offerings in capital markets. Impacts Companies’ financial obligations will increase along with recent rises in interest rates. Lack of adequate government support this year may delay economic recovery. New investments are less likely in face of mounting corporate debt. The impact of rising liabilities will be more prolonged for small businesses.

Russian Banking System under Conditions of Global Crisis

2009 ◽  
pp. 4-14 ◽  
Author(s):  
G. Gref ◽  
K. Yudaeva
Keyword(s):  
Banking System ◽  
Commodity Prices ◽  
Financial Sector ◽  
Banking Crises ◽  
Economic Recovery ◽  
Balance Sheets ◽  
Current Economic Crisis ◽  
Risk Appetite ◽  
The Us ◽  
The Face

Problems in the financial sector were at the core of the current economic crisis. Therefore, economic recovery will only become sustainable after taking care of the major weaknesses in the financial sector. This conclusion is relevant both for the US and UK - the two countries where crisis has started, and for other economies which financial institutions turned out to be fragile in the face of the swings in the risk appetite. Russia is one of the countries where the crisis has revealed serious deficiency in the financial sector. Our study of 11 banking crises during the last 25-30 years shows that sustainable economic recovery and decrease in the dependence on commodity prices will be virtually impossible without cleaning of balance sheets and capitalization of the financial sector.

Non-standard functions and structures of ministries of finance under economic challenges: A case study of Western governments

2020 ◽  
Vol 26 (11) ◽  
pp. 2448-2471
Author(s):  
S.V. Anureev
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Comparative Analysis ◽  
Great Britain ◽  
Central Banks ◽  
Economic Recovery ◽  
Budget Process

Subject. This article examines the functions and management structures of central financial bodies and related parliamentary and governmental structures in Australia, Canada, Great Britain, Japan, Germany, France and Italy. Objectives. The article aims to identify non-standard functions and structures that go beyond the classical responsibility of finance ministries as a central part of the budget process arising from current economic challenges. Methods. For the study, I used a comparative analysis. Results. The article describes the important new functions of financial authorities and treasuries of Western governments aimed at economic growth and economic recovery. Conclusions. The organizational and management structures and functions of the ministries of finance go far beyond the budget process, overlap with and dominate the functions of central banks and ministries of economic development.

scholarly journals Corporate debt maturity and economic development

2019 ◽  
Vol 15 (5) ◽  
pp. 669-687 ◽  
Author(s):  
Celia Álvarez-Botas ◽  
Víctor M. González-Méndez
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Financial Crisis ◽  
Firm Size ◽  
Debt Maturity ◽  
Corporate Debt ◽  
Content Type ◽  
Country Level ◽  
The Relationship ◽  
Bank Concentration

Purpose The purpose of this paper is to analyse the effect of economic development on the influence of country-level determinants on corporate debt maturity, bearing in mind firm size and the period of financial crisis. Design/methodology/approach The authors employ panel data estimation with fixed effects to examine the role of economic development in influencing the relationship between country-level determinants on corporate debt maturity. The paper uses a sample of 30,727 listed firms, belonging to 39 countries, over the period 2005–2012. Findings Corporate debt maturity increases with the efficiency of the legal system and bank concentration and decreases with the weight of banks in the economy. However, the importance of these country determinants is greater in developing than in developed countries. The authors also show that firm size in developed and developing countries influences country determinants of corporate debt maturity. Finally, the results reveal that the financial crisis has affected the debt maturity of firms differently in developed and developing countries, with the effect of bank concentration lengthening debt maturity, this effect being more pronounced in developing countries. Practical implications The findings provide useful insights to guide policy decisions providing access to long-term financing, as corporate debt maturity depends on economic development, institutional environment, banking structure and firm size. Originality/value This study incorporates economic development in explaining the relationship between country-level determinants and corporate debt maturity.

Sign in / Sign up

Export Citation Format

Share Document