The Evolution and the Prospects of Contemporary Financial Instruments in Greece: The Case of SWAPS

2007 ◽  
Vol 8 (1) ◽  
pp. 7-22
Author(s):  
Olympia Agorasti ◽  
George Blanas ◽  
Pavlos Golemis
Keyword(s):  
Interest Rate ◽  
Institutional Investors ◽  
Financial Instruments

This paper presents the results of a survey of derivatives and especially of swaps usage in the Greek market. Dividing the sample to Greek companies and Greek institutional investors, we find that institutional investors use derivatives much more than companies. In particular we find that 100% of institutional investors use derivatives when the corresponding percentage of companies is 34.75% and discover the most important reasons that companies do not use derivatives. Moreover, institutional investors use all the swap products that are referred to the questionnaire when companies use only interest rate and currency swaps.

Investing in Sustainable Infrastructure in Latin America: Instruments, Strategies and Partnerships for Institutional Investors Mobilization

2021 ◽  
Author(s):  
Giovanni Leo Frisari ◽  
Max Messervy
Keyword(s):  
Latin America ◽  
Financial Institutions ◽  
Institutional Investors ◽  
Economic Recovery ◽  
Economic Systems ◽  
Investment Strategies ◽  
Financial Instruments ◽  
Low Carbon ◽  
Investment Opportunity ◽  
Sustainable Infrastructure

Despite the significant challenges in mobilizing investors resources towards sustainable infrasctrure investments in Latin America and the Carribbean, an investment opportunity in low carbon and resilient assets exists and represents a critical step towards a sustainable economic recovery from the financial duress due to the COVID-19 pandemic and its impacts on health and economic systems of the region. This papers contribuition is two-fold: it attempts to estimate and size an ideal sustainable investable pipeline accross the region generated by several policies promoting public-private-partnerships (PPP) in the transport and energy sectors. Then it identifies and details different investment strategies and financial instruments available to institutional investors to invest in the region while mitigating the risks they perceived and hinder the mobilization of their resources. Such strategies discussed in the paper include: joint ventures with local counterparties, direct and active investments in the national markets, and/or access to markets via partnerships with development financial institutions.

Review of the Method of Valuation of the SDR

Policy Papers ◽  
2010 ◽  
Vol 2010 (92) ◽  
Author(s):  
Keyword(s):  
Interest Rate ◽  
Exchange Rates ◽  
Foreign Exchange ◽  
Governing Board ◽  
International Banking ◽  
Financial Instruments ◽  
Monetary Unions ◽  
Goods And Services ◽  
The Third ◽  
Financial Transactions

This paper provides the basis for the quinquennial review of the method of valuation of the SDR, and the financial instruments used to determine the SDR interest rate. Under the governing Board decisions, the new SDR valuation and interest rate baskets would come into effect on January 1, 2011. The review examines developments during the 2005–09 period in the variables relevant to the SDR valuation. These variables include exchange rates, exports of goods, services and income, and reserve holdings. Data for exports of goods and services show China has become the third largest exporter among Fund members and monetary unions including Fund members. Nonetheless, indicators such as reserves and international banking and debt securities suggest that the currencies in the current SDR basket continue to predominate in international financial transactions, and these currencies also account for the bulk of global foreign exchange turnover. At this time, the Chinese renminbi would not appear to meet the criteria for being determined by the Fund to be a freely usable currency, which is also required for inclusion in the SDR basket.

scholarly journals Evaluation of Financial Instruments Possessing Non-Conventional Cash Flow

2018 ◽  
Vol 12 (2) ◽  
pp. 7-17
Author(s):  
Nikolay Kulakov ◽  
Anastasia Blaset Kastro
Keyword(s):  
Interest Rate ◽  
Cash Flow ◽  
Net Present Value ◽  
Average Rate ◽  
Cash Flows ◽  
Rate Of Return ◽  
Short Sales ◽  
Financial Instruments ◽  
Financial Instrument ◽  
Generalized Net

Investments are often justified and accepted based on the IRR as the main criterion of profitability. However, that criterion is hardly ever used to evaluate some financial instruments (e.g. short sales, options, futures and swaps). This is partially due to the fact that some instruments possess a cash flow describing a borrowing rather than an investment. Others have a non-conventional cash flow and, consequently, the IRR may be meaningless or impossible to determine. We describe a non-conventional cash flow of a financial instrument as a non-conventional project consisting of a sequence of single-period (simple) projects. Each simple project has only two cash flows with opposite signs therefore the IRR for the simple project is always determined. If there is a decomposition in which each simple project has the same IRR value, then that value is the IRR of the non-conventional project. If a decomposition of the non-conventional project into simple projects with the same IRR is impossible, the non-conventional project’s IRR does not exist. If a simple project is an investment then the IRR is a rate of return for an investor. If a simple project is a loan then the IRR is an interest rate for the borrower, but not for the investor. Therefore the NPV method estimates a non-conventional project for two different participants simultaneously that leads to problems with definition of IRR. In order the loan’s IRR would be a rate of return for the investor, but not an interest rate for the borrower, the sign of IRR should be replaced to opposite one. The paper discusses how to use the Generalized Net Present Value (GNPV) method to calculate a yield of the financial instrument with non-conventional cash flow. The function GNPV(r, p) depends on two rates: finance and reinvestment ones that determine a cost of funding and a rate of return, respectively. The equation GNPV (r, -r) = 0 is investigated in the paper. The solution of that equation is the Generalized Average Rate of Return (GARR). We suggest using the GARR as a new measure of a yield for evaluating financial instruments possessing a non-conventional cash flow and estimating a portfolio’s performance over period with contributions and withdrawals.

scholarly journals SUKUK NEGARA SEBAGAI PENDORONG PERTUMBUHAN PASAR KEUANGAN SYARIAH INDONESIA

IQTISHODUNA ◽  
2012 ◽  
Author(s):  
Zuraidah Zuraidah
Keyword(s):  
Financial Markets ◽  
Mutual Funds ◽  
Institutional Investors ◽  
Islamic State ◽  
Financial Instruments ◽  
State Budget ◽  
Special Purpose Vehicle ◽  
Strategic Role ◽  
The Government ◽  
A Company

Financiers expect the presence of Sukuk or Islamic State Securities driving growth of Islamic financial markets, especially in Indonesia. In addition, as one of the state budget funds, Sukuk also have a strategic role for the government as a benchmark of Islamic financial instruments. State Sharia Securities (SBSN) or can also be called Sukuk Company will publish SBSN is a company specifically formed for the purpose of publishing this SBSN (special-purpose vehicle SPV). SBSN or Sukuk this state is an instrument of debts without usury as in bonds, in which the Sukuk is issued based on a reference asset in accordance with Islamic principles. Sukuk may be used as an alternative to institutional investors such as banks, pension funds, and insurance also can invest surplus funds that had invested only in stocks, mutual funds, Seritifikat Bank Indonesia (SBI).

scholarly journals Institutions of collective investment in Ukraine: scale and consequences of investment dysfunction

2020 ◽  
Vol 2020 (2) ◽  
pp. 91-104
Author(s):  
Nataliya Shelud'ko ◽  
◽  
Stanislav Shishkov ◽  
Keyword(s):  
Stock Market ◽  
National Economy ◽  
Institutional Investors ◽  
Tax Burden ◽  
Financial Instruments ◽  
Conditional Performance ◽  
Market Participants ◽  
Economic Basis ◽  
Public Consciousness ◽  
Institutional Viability

The development of collective investment institutions (CIIs) in Ukraine is characterized by rather ambiguous and stable trends, which at first glance do not have any objective economic basis. The dynamics of CIIs activities in Ukraine demonstrates their steady invulnerability to the crises in the global and national economy, maintaining positions (in quantity terms) against the background of reduced number of both professional stock market participants and other institutional investors, and despite the decrease in the financial instruments in circulation, and the gradual formation in public consciousness of a neutral negative view of the functioning of the national stock market. The authors' assumption that the key to such institutional viability consists in the tax preferences for the CIIs, which is confirmed by the analysis. It is noted that in this case both the economic sense and the declared "collectivity" of this investment institution are distorted. The use of CIIs solely to ease the tax burden, with gross legal and tax violations creates risks for both the beneficiaries of such tax schemes and for the very existence of the institution. The specificity of "investment areas" outside the stock market, the highly conditional performance of the function of accumulation of investment resources and, correspondingly, the profanation of the CIIs' issuer function, in particular as to the fair distribution of investment income, distortions of the essence of the ideology of collective investment in combination with extremely loyal regulation on the part of the NSSMC all presently call into question the entire possibility of considering CIIs as a full-fledged component of the stock market.

scholarly journals FINANCIALIZATION AND SPECULATION IN AGRICULTURE – POSITIVE AND NEGATIVE ASPECTS OF THE FINANCIALIZATION OF THE ECONOMY

2019 ◽  
Vol XXI (3) ◽  
pp. 73-81 ◽  
Author(s):  
Justyna Franc-Dąbrowska
Keyword(s):  
Financial Crisis ◽  
Institutional Investors ◽  
Agricultural Land ◽  
Raw Materials ◽  
Agricultural Products ◽  
Land Market ◽  
Land Markets ◽  
Financial Instruments ◽  
Dual Nature ◽  
Real Value

The aim of this study was to present the phenomenon of financialization, with consideration for its dual nature: the negatively-perceived side, which is said to have contributed to the financial crisis of 2007-2008, and the positive, which influences the production of real value, especially in the agricultural land market. It was found that the value of agricultural land is increasing, along with the average annual prices of agricultural products paid for by economic entities purchasing directly from producers. The financialization of the economy after 2007 is not only associated with increases in value brought about by investments in new financial instruments, but with the process of investors transferring agricultural raw materials to commodity and agricultural land markets. The study found that both institutional investors and farmers invest in agricultural land, with a view to benefiting from the advantages of future increases in their value. There are, however, limitations on the potential purchase of agricultural land by institutional investors, which, as a result, create a price barrier on the purchase of land by actual farmers.

scholarly journals ANALYSIS OF INVESTMENT ACTIVITIES OF INSURANCE ORGANIZATIONS OF KAZAKHSTAN

2019 ◽  
pp. 518-526
Author(s):  
R.B.Sartova
Keyword(s):  
Institutional Investors ◽  
Financial Stability ◽  
Insurance Companies ◽  
Financial Resources ◽  
Financial Instruments ◽  
Insurance Premiums ◽  
Insurance Portfolio ◽  
The Republic

This article discusses the investment activities of insurance (reinsurance) organizations of the Republic of Kazakhstan in the period 2014-2018. The dynamics of the main indicators of the activities of insurance companies for the specified five-year period is given. The financial resources attracted by insurers as insurance premiums are sources of investments that can be used in accordance with the current legislation of Kazakhstan. The norms for diversifying the assets of insurance organizations are aimed at ensuring the reliability of investments and the financial stability of national insurers. The insurance portfolio of companies shows from 2014 to 2018. positive dynamics, while the structure itself has not changed significantly. The main share of the insurance portfolio is occupied by classical financial instruments: securities and deposits. In order to strengthen the role of insurance organizations as institutional investors, the transformation of insurance reserves into various sectors of the Kazakhstan economy is necessary.

scholarly journals Optimal Interventions in Markets with Adverse Selection

2012 ◽  
Vol 102 (1) ◽  
pp. 1-28 ◽  
Author(s):  
Thomas Philippon ◽  
Vasiliki Skreta
Keyword(s):  
Interest Rate ◽  
Financial Markets ◽  
Adverse Selection ◽  
Financial Instruments ◽  
Government Program ◽  
Outside Options ◽  
Market Interest Rate ◽  
Implementation Costs ◽  
Participation Decisions

We study the design of interventions to stabilize financial markets plagued by adverse selection. Our contribution is to analyze the information revealed by participation decisions. Taking part in a government program carries a stigma, and outside options are mechanism dependent. We show that the efficiency of an intervention can be assessed by its impact on the market interest rate. The presence of an outside market determines the nature of optimal interventions and the choice of financial instruments (debt guarantees in our model), but it does not affect implementation costs. (JEL D82, D86, G01, G20, G31)

Review of the Method of Valuation of the SDR

Policy Papers ◽  
2015 ◽  
Vol 15 (72) ◽  
Author(s):  
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Selection Criteria ◽  
Executive Directors ◽  
Financial Instruments ◽  
Appreciable Change ◽  
Special Drawing ◽  
Exchange Markets ◽  
Informal Discussion ◽  
International Transactions

This paper provides the basis for the quinquennial review of the method of valuation of the Special Drawing Right (SDR). The review considers the composition, size, and weighting of the SDR currency basket and the financial instruments used to determine the SDR interest rate. The analysis in this paper is guided by the informal discussion of Executive Directors in July on initial considerations for the review. In light of Directors’ preference, the two currency selection criteria for SDR inclusion are maintained. Since China continues to meet the export criterion, a key focus of this paper is on assessing whether the renminbi (RMB) could be determined to be a freely usable currency, which is the second criterion. The paper documents the rising international use and trading of the RMB since the 2010 SDR valuation review. A range of indicators suggests that use of the RMB in international transactions has risen substantially, albeit from a low base. The paper also finds that the RMB has become far more actively traded in foreign exchange markets, with sufficient depth to support operations of the size Fund members might undertake without an appreciable change in the exchange rate. Full Text also available in Chinese.

The SDR Interest Rate Basket--Proposed Change of the Representative Interest Rate for the Euro and Amendment to Rule T-1(C)

Policy Papers ◽  
2014 ◽  
Vol 2014 (88) ◽  
Author(s):  
Keyword(s):  
Interest Rate ◽  
Euro Area ◽  
European Central Bank ◽  
Yield Curve ◽  
Secondary Market ◽  
Financial Instruments ◽  
Government Bonds ◽  
European Central ◽  
Investment Grade ◽  
Selection Of

The three-month Eurepo interest rate, the euro component of the SDR interest rate basket, will be discontinued as of the end of 2014. The three-month Eurepo rate, administered by the European Money Market Institute (EMMI), has been the representative interest rate instrument of the euro area in the SDR interest rate basket since 2006. However, faced with a significant shrinking in the number of banks participating in the rate-setting panel, the EMMI announced last month that the Eurepo interest rate will be discontinued after December 31, 2014. This paper proposes to replace the three-month Eurepo rate in the SDR interest rate basket with a transactions-based three-month interest rate. Staff has consulted with the European Central Bank (ECB), which recommends to replace the Eurepo rate with a three-month spot rate derived from the secondary market yield curve covering euro area government bonds rated either investment grade or AA and above. In staff’s view, the latter option (AA and above) would be most comparable to the other instruments in the SDR interest rate basket and would have characteristics that are most consistent with previous Board guidance for selection of financial instruments in the SDR basket. The proposed change would be implemented by an amendment to Rule T-1(c), requiring a 70 percent majority of the total voting power.

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