The Impact of Pension Funds on Financial Markets

Monetary policy, and the response it elicits from financial markets, raises normative questions. This chapter, building on an introductory section on the objectives and instruments of monetary policy, analyzes two such questions. First, it assesses the impact of monetary policy on inequality and argues that the unconventional policies adopted in the wake of the financial crisis exacerbate inequalities in income and wealth. Depending on the theory of justice one holds, this impact is problematic. Should monetary policy be sensitive to inequalities and, if so, how? Second, the chapter argues that the leverage that financial markets have today over the monetary policy agenda undermines democratic legitimacy.

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Pension Fund Management, Investment Performance, and Herding in the Context of Regulatory Changes: New Evidence from the Polish Pension System

Risks ◽

10.3390/risks9010006 ◽

2020 ◽

Vol 9 (1) ◽

pp. 6

Author(s):

Łukasz Dopierała ◽

Magdalena Mosionek-Schweda

Keyword(s):

Pension System ◽

Pension Funds ◽

Management Style ◽

Market Model ◽

Herd Behavior ◽

Investment Performance ◽

Fund Managers ◽

Regulatory Changes ◽

Increased Risk ◽

The Impact

The aim of this paper is to assess the impact of reforms introduced in the operation of Polish open pension funds on management style, risk exposure and related investment performance. The article analyzes the impact of the reformed regulations on the herd behavior of fund managers. In particular, we examined whether the elimination of the internal benchmark for fund evaluation impacts the elimination or reduction of herd behavior. We proposed a multi-factor market model to evaluate the performance of funds investing in various types of instruments. Moreover, we used panel estimation to directly take into account the impact of the internal benchmark on herd behavior. Our results indicate that highly regulated funds may slightly outperform passive benchmarks and their unregulated competitors. In the case of Polish open pension funds, limiting investments in Treasury debt instruments clearly resulted in increased risk and volatility of returns. However, it also raised competition between funds and decreased the herd behavior. Additionally, the withdrawal of the mechanism evaluating funds based on the internal benchmark was also important in reducing herd behavior.

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The impact of COVID-19 pandemic on transmission of monetary policy to financial markets

International Review of Financial Analysis ◽

10.1016/j.irfa.2021.101705 ◽

2021 ◽

Vol 74 ◽

pp. 101705

Author(s):

Xiaoyun Wei ◽

Liyan Han

Keyword(s):

Monetary Policy ◽

Financial Markets ◽

The Impact ◽

Transmission Of Monetary Policy

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Green Urban Development: The Impact Investment Strategy of Canadian Pension Funds

SSRN Electronic Journal ◽

10.2139/ssrn.3853175 ◽

2021 ◽

Author(s):

Alexander Beath ◽

Sebastien Betermier ◽

Maaike Van Bragt ◽

Quentin Spehner ◽

Yuedan Liu

Keyword(s):

Urban Development ◽

Investment Strategy ◽

Pension Funds ◽

The Impact

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COVID -19 and Indian Financial Markets: A Review

Management Insight - The Journal of Incisive Analysers ◽

10.21844/mijia.16.2.1 ◽

2020 ◽

Vol 16 (02) ◽

pp. 1-8

Author(s):

Kamaldeep Kaur Sarna

Keyword(s):

Financial Markets ◽

Financial Institutions ◽

Financial Services ◽

Stock Markets ◽

Global Economy ◽

Banking Sector ◽

Global Financial Crisis ◽

Negative Impact ◽

Management Strategies ◽

The Impact

COVID-19 is aptly stated as a Black Swan event that has stifled the global economy. As coronavirus wreaked havoc, Gross Domestic Product (GDP) contracted globally, unemployment rate soared high, and economic recovery still seems a far-fetched dream. Most importantly, the pandemic has set up turbulence in the global financial markets and resulted in heightened risk elements (market risk, credit risk, bank runs etc.) across the globe. Such uncertainty and volatility has not been witnessed since the Global Financial Crisis of 2008. The spread of COVID-19 has largely eroded investors’ confidence as the stock markets neared lifetimes lows, bad loans spiked and investment values degraded. Due to this, many turned their backs on the risk-reward trade off and carted their money towards traditionally safer investments like gold. While the banking sector remains particularly vulnerable, central banks have provided extensive loan moratoriums and interest waivers. Overall, COVID-19 resulted in a short term negative impact on the financial markets in India, though it is making a way towards V-shaped recovery. In this context, the present paper attempts to identify and evaluate the impact of the pandemic on the financial markets in India. Relying on rich literature and live illustrations, the influence of COVID-19 is studied on the stock markets, banking and financial institutions, private equities, and debt funds. The paper covers several recommendations so as to bring stability in the financial markets. The suggestions include, but are not limited to, methods to regularly monitor results, establishing a robust mechanism for risk management, strategies to reduce Non-Performing Assets, continuous assessment of stress and crisis readiness of the financial institutions etc. The paper also emphasizes on enhancing the role of technology (Artificial Intelligence and Virtual/Augmented Reality) in the financial services sector to optimize the outcomes and set the path towards recovery.

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