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☆ Exodus of capital from China signals 'seismic' change in global flows as investors grow wary of autocratic regimes
▼ + stars: | 2023-08-29 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

China's capital exodus is among the worst seen by emerging markets, said Robin Brooks, chief economist at IIF. That's as global investors have grown wary of autocratic regimes, he tweeted on Sunday. "The change in global capital flows is seismic. "But China has now seen consistent and large outflows for the past 18 months, as investors grow wary of autocracies." Global markets look at China in a new light," Brooks said in a separate X post.

Persons: Robin Brooks, Brooks, Ukraine that's, Adam Posen Organizations: IIF, Service, Institute of International Finance, hemorrhaging, CSI, Administration of Foreign Exchange, EPFR, Peterson Institute for International Economics, Foreign Affairs Locations: China, Wall, Silicon, Ukraine, outflows

☆ Brazil's real, not the dollar, could be the solution to Argentina's currency turmoil, an economist says
▼ + stars: | 2023-08-23 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

Argentina should peg the peso to Brazil's real, not the US dollar, to deal with exchange-rate instability and hyperinflation, an economist said. "If Argentina wants a currency peg so badly - Dollarization is after all just a peg - peg to Brazil," Robin Brooks said. "If Argentina wants a currency peg so badly - Dollarization is after all just a peg - peg to Brazil. AdvertisementAdvertisementSome market experts have also backed the idea of Argentina potentially adopting the US currency – economist Steve Hanke recently called for the nation to mothball its central bank and dollarize. Brooks' latest comments come after he suggested earlier that Argentina needs a recession to fix its crashing currency, not dollarization.

Persons: Robin Brooks, Brooks, Javier Milei, Steve Hanke Organizations: Service, Institute of International Finance, South, greenback Locations: Argentina, Brazil, Wall, Silicon, South American

And with China's post-COVID recovery running into the ground and suffering a deepening real estate bust, western investment curbs throw more sand in the wheels. A question now is whether a retreat of western money from emerging markets at least partly explains both their recent underperformance and that of western government bonds, in which emerging central banks and sovereign funds are heavily invested. The picture has not been much better in aggregate emerging bond indices, even if they have done marginally better than developed world counterparts, and worries over emerging high-yield and property linked bonds are rising. Have global investors high-tailed it from emerging markets already? If western money grows more wary and is increasingly warned off China and other selective emerging investments, will there be a mutual pullback of official emerging money from western bond markets?

Persons: Aly, Joe Biden, Morgan, Biden, crumb, Mike Dolan, Richard Chang Organizations: REUTERS, U.S, U.S ., Bank of, Institute for International Finance, Treasury, Reuters, Twitter, Thomson Locations: Shanghai, Shenzhen, China, Ukraine, Washington, Russia, United States, Beijing, Moscow, Taiwan, Brazil, India, South Africa, Hong Kong, Saudi Arabia, South Korea

☆ The pressure for bank consolidation will grow independently of regulators, says Charles Dallara
▼ + stars: | 2023-08-14 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe pressure for bank consolidation will grow independently of regulators, says Charles DallaraCharles Dallara, Former Institute of International Finance CEO, joins 'Closing Bell Overtime' to talk new banking regulations, banking consolidation and more.

Persons: Charles Dallara Charles Dallara Organizations: Institute of International Finance

A participant stands near a logo of World Bank at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. "Uganda's Anti-Homosexuality Act fundamentally contradicts the World Bank Group's values. World Bank President Ajay Banga, who took office in June after the Ugandan law was enacted, has come under pressure to respond to the Ugandan law. The existing portfolio will continue to disburse funds, even as new lending is put on hold, a World Bank source said. It said the IFC and MIGA would also implement additional measures to "ensure inclusion and non-discrimination as needed."

Persons: Johannes P, Ajay Banga, Banga, Kanishka Singh, Andrea Shalal, Leslie Adler, Jonathan Oatis, Richard Chang Organizations: Bank, International Monetary Fund, REUTERS, United Nations, World Bank, International Development Association, International Finance Corporation, Multilateral Investment Guarantee Agency, Reuters, IFC, Thomson Locations: Nusa Dua, Bali, Indonesia, Uganda, Washington

"China is not trying to supplant the IMF," said Matthew Mingey, a senior analyst with Rhodium Group. "When China has allowed these swap lines to be tapped, in many cases it's to unlock an IMF bailout or ensure an IMF programme stays on track." In turn, China is a major customer for Argentina's soy, corn and poultry exports. "China has every incentive to tightly manage Argentine drawings under the swap lines as the risks are very high." The swap line that the People's Bank of China (PBOC) signed in 2009 with Buenos Aires was the first agreed with a Latin American country.

Persons: Matthew Mingey, Buenos, Mark Sobel, Sobel, Sergio Massa, Martin Castellano, Alejandro Werner, Werner, Mingey, Jorgelina, Rosario, Karin Strohecker, Jorge Otaola, Joe Cash, Kirsten Donovan Organizations: International Monetary Fund, IMF, U.S . Treasury, Reuters, World Bank, TAG, People's Bank of China, Buenos Aires, Economy, Institute of International Finance, Relations, Georgetown Americas Institute, Western Hemisphere Department, Thomson Locations: China, Argentina, Beijing, Washington, Latin America, Buenos Aires, U.S, Buenos, American, United States, Zambia, Sri Lanka, Taiwan, Ukraine

☆ Businesses are scrambling for tips right now because they don't want to raise wages in case of a recession
▼ + stars: | 2023-07-26 | by ( Juliana Kaplan | ) www.businessinsider.com time to read: +4 min

Firms don't want to raise wages because they're worried about a recession, so you pay workers instead. Get the inside scoop on today’s biggest stories in business, from Wall Street to Silicon Valley — delivered daily. And now, businesses are trying to avoid making the larger wages those tips have augmented their responsibility, as the economy cools. Jonathan Morduch — a professor of public policy and economics at New York University — told the Wall Street Journal that as businesses prepare for a potential recession, "they don't want to lock into higher wages." "Businesses are happy to let workers earn more from tips, especially when there's no pressure to raise the tipped minimum," Morduch told the Wall Street Journal.

Persons: you've, they're, It's, Scheherezade Rehman, Jonathan Morduch —, New York University —, Andy Kiersz, Jacob Zinkula, Laurence Kotlikoff, what's, Morduch Organizations: Service, George Washington University, Wall Street, New York University, Boston University Locations: Wall, Silicon

☆ US lending 'meltdown' shows big investment slump is underway, economist says
▼ + stars: | 2023-07-24 | by ( Joseph Wilkins | ) www.businessinsider.com time to read: +3 min

US commercial and industrial lending slumped sharply this year, the chief economist at the Institute of International Finance said. Robin Brooks has called it a "staggering meltdown" – and warns a big slump in US investment is on its way. Credit flows have declined amid higher interest rates and tighter lending standards following this year's banking turmoil. Furthermore, a sharp surge in US interest rates since early 2022 has made borrowings much more expensive, potentially damping demand. "Meltdown in US commercial and industrial (C&I) loan growth is staggering," he tweeted on Sunday.

Persons: Robin Brooks, Alastair Borthwick, Borthwick Organizations: Institute of International Finance, Service, Silicon Valley Bank, Big, Federal Reserve, Bank of America Locations: Wall, Silicon, America

☆ Pakistan to sell contract to run Islamabad airport
▼ + stars: | 2023-07-20 | by ( ) www.reuters.com time to read: +1 min

KARACHI, Pakistan, July 20 (Reuters) - Pakistan is to proceed with the sale via tender of a contract to manage Islamabad airport after consultations with the International Finance Corporation (IFC), the Ministry of Finance said on Thursday. In March Pakistan had kicked off the outsourcing of operations at three major airports and the ministry said Islamabad airport was the first of these to be affected, as the country seeks to generate foreign exchange reserves for its ailing economy. In a statement the ministry said it had been unanimously agreed for the outsourcing of operations at Islamabad airport to go ahead in order to improve service delivery in line with best industry practices. Officials say Pakistan has been in talks with Qatar to jointly run the terminals at Islamabad, Karachi and Lahore airports. The Qatar Investment Authority pledged to invest $3 billion in Pakistan after Prime Minister Shehbaz Sharif visited Doha late last year.

Persons: Shehbaz Sharif, Ariba Shahid, David Holmes Organizations: International Finance Corporation, IFC, Ministry of Finance, Pakistan, Qatar Investment Authority, Thomson Locations: KARACHI, Pakistan, Islamabad, Qatar, Karachi, Lahore, Doha

Potential buyers and sellers are also being deterred by the long wait for deal approvals by regulators, the experts said. The uncertainty over capital rules has created a "chilling effect" that could put a lid on mergers, while rising interest rates and a looming economic downturn could also damp activity, Adams said. That compares to $3.9 billion in bank deals for non-stressed institutions, the lowest seen over the first half of a year since 2010. "Instead of evaluating mergers based on competition and the needs of the community, political factors have become too important," she said. Regional banks will "have incentives to merge and reach larger scale since they will be subject to more regulatory scrutiny and capital,” Johnson said.

Persons: ”, Timothy Adams, Adams, Michael Barr, “, Meg Tahyar, Davis Polk, Janet Yellen, Tim Johnson, ” Johnson, Tatiana Bautzer, Saeed Azhar, Nupur Anand, Pete Schroeder, Lananh Nguyen, Deepa Babington Organizations: YORK, Institute of International Finance, Global, Federal, Treasury, Dominion Bank, First, KPMG, Thomson Locations: U.S, Canada's Toronto

☆ We need to prepare for a negative shock from China, says IIF's Tim Adams on weak China economic data
▼ + stars: | 2023-07-17 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWe need to prepare for a negative shock from China, says IIF's Tim Adams on weak China economic dataTim Adams, Institute of International Finance CEO, joins 'Closing Bell Overtime' to talk banking regulation, the sector-at-large, the Chinese economy and more.

Persons: Tim Adams Organizations: Institute of International Finance Locations: China

July 14 (Reuters) - Emerging market equity funds are outpacing developed market rivals in attracting inflows for the first time in three years, underscoring a relatively more favourable growth outlook and expectations of faster rate cuts in many less developed markets. Refinitiv Lipper data shows money inflows into emerging market (EM) equity funds hit $30.55 billion in the first half of the year, compared with outflows of $88.65 billion from developed market equity funds. Data from the Institute of International Finance on Thursday also showed foreigners injected a staggering $22 billion net into emerging market portfolios in June, marking the highest influx since January. read moreThe case for emerging markets, analysts say, is they were ahead of developed markets in tightening monetary policy and are now beginning to reap the rewards of falling inflation, lower borrowing costs and improved growth. An over-leveraged real estate sector impedes growth," said Derek Izuel, chief investment officer and portfolio manager of the Shelton Emerging Markets Fund.

Persons: World's, Malcolm Dorson, Li Qiang, Derek Izuel, Patturaja, Vidya Ranganathan, Conor Humphries Organizations: Institute of International Finance, U.S . Fed, European Central Bank, Reuters Graphics, Reuters, Global, Shelton, Markets Fund, Thomson Locations: Hungary's, Europe, U.S, China

[1/3] Pedestrians are reflected on a window of a commercial building at closing hour at a financial district in Tokyo, Japan, November 22, 2017. The number of activist funds has trebled over the last five years to 69, according to data from IR Japan. Joining a hedge fund where you might lose your job tomorrow because you lost money or didn't raise funds is a very foreign world for such workers." "Many global hedge funds are opening up Tokyo offices and hiring talent" to support a growing investment focus, said Masa Yanagisawa, head of prime services Japan at Goldman Sachs in Tokyo. Hong Kong-headquartered activist hedge fund Oasis Management has hired people in Japan this year, including a former senior regulatory official it appointed to its advisory council.

Persons: Kim Kyung, Warren Buffett, Stefan Nilsson, Masa Yanagisawa, Goldman Sachs, Seth Fischer, FinCity.Tokyo, Keiichi Aritomo, Toby Bartlett, Goldman's Yanagisawa, UBP, Cedric Le Berre, Xie Yu, Makiko Yamazaki, Scott Murdoch, David Dolan, Lincoln Organizations: REUTERS, Global, Nikkei, Funds, Oasis Management, Oasis, Citadel, Citadel Securities, Nasdaq, May, Angel, Asset Management, Thomson Locations: Tokyo, Japan, HONG KONG, TOKYO, Hong Kong, Singapore, Swiss, China, Taiwan, Sydney

☆ Fed plans to boost US banks' reserve requirements; industry gripes
▼ + stars: | 2023-07-10 | by ( Pete Schroeder | ) www.reuters.com time to read: +5 min

The banking industry called the effort misguided and economically harmful. ‘HOLISTIC REVIEW’Barr’s speech served as a comprehensive update on a “holistic” review of bank capital rules that he launched shortly after joining the U.S. central bank in 2022. He said he will seek to apply stricter capital rules to banks with more than $100 billion in assets, expanding the pool of firms that must comply. Dashing industry hopes for any rules relief, Barr also said he did not plan to weaken an existing surcharge on large global banks or leverage rules which the industry argued hampered Treasury market functions. The Fed has itself come under criticism for its oversight of banks involved in this year’s banking crisis.

Persons: Michael Barr, Evelyn Hockstein, ” Barr, Barr, Joe Biden, ”, Tim Adams, Jerome Powell Organizations: WASHINGTON, Federal, Federal Reserve, Banking, Housing, Urban Affairs Committee, Capitol, REUTERS, Center, Institute of International Finance, U.S, Silicon Valley Bank, Republican, House, Monday, Bank Locations: Washington , U.S, Washington, Basel, Silicon, U.S

BUENOS AIRES/NEW YORK, June 18 (Reuters) - Argentina and the International Monetary Fund (IMF) have a $44 billion dilemma, with the two sides set to meet for crunch talks to revamp the country's huge, wobbling debt deal, key to avoiding default on billions in looming debt payments. Economy Minister Sergio Massa is expected in Washington as early as this week to try to unlock talks to accelerate IMF disbursements and ease economic targets attached to the deal, with investors and traders watching closely. "The fund knows that Argentina is a problem, it is its main debtor, but it seems to me that the negotiation has stagnated. Reuters Graphics'DAMAGE CONTROL'The government is hoping to bring forward over $10 billion in IMF disbursements scheduled for this year, though is reluctant to agree to tough austerity measures with an eye on October general elections where it faces likely defeat. "Investors are paying real attention to signs from the IMF negotiations," said economist Gustavo Ber.

Persons: Sergio Massa, Ricardo Delgado, Massa, Hugo Godoy, Gustavo Ber, Walter Bianchi, Rodrigo Campos, Adam Jourdan, Daniel Wallis Organizations: BUENOS AIRES, International Monetary Fund, Economy, IMF, Reuters Graphics, Reuters, Institute of International Finance, Reuters Graphics Reuters, Thomson Locations: BUENOS, Argentina, Washington, Argentine, Buenos Aires, China

☆ Qatar stock market ends lower, Egypt rises
▼ + stars: | 2023-06-18 | by ( Md Manzer Hussain | ) www.reuters.com time to read: +2 min

The Qatari Stock index (.QSI) dropped 0.1%, extending its losses to a second session with Gulf's biggest lender Qatar National Bank (QNBK.QA) falling 0.2% and Qatar Islamic Bank (QISB.QA) shedding 1.1%. Among the losers, Lesha Bank (QFBQ.QA) and Dukhan Bank (DUBK.QA) lost 1.1% and 1.3% respectively. Saudi Arabia's benchmark index (.TASI) added marginally as losses in energy and financial sectors countered gains in most of the sectors. Dr Sulaiman Al-Habib Medical Services (4013.SE) climbed 2.5% and Mouwasat Medical Services (4002.SE) surged 6.1%. However, Riyad Bank (1010.SE) and the world's largest Islamic bank by assets Al Rajhi Bank (1120.SE) lost 2.1% and 0.7% respectively.

Persons: Christopher Waller, Dr Sulaiman Al, Md Manzer Hussain, David Evans Organizations: . Federal, United Arab, Qatar National Bank, Qatar Islamic Bank, Lesha Bank, Dukhan Bank, Habib Medical Services, Mouwasat Medical Services, Riyad Bank, Al Rajhi Bank, Co, International Finance Corporation, IFC, Thomson Locations: United States, Saudi Arabia, United Arab Emirates, Qatar, Saudi, El

June 14 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. A raft of economic data and a likely medium-term policy easing from China will give Asian markets direction on Thursday, but the main steer will probably come from investors' reaction to the Federal Reserve's 'hawkish skip' on interest rates. China's central bank, meanwhile, is expected to cut the borrowing cost of medium-term policy loans for the first time in 10 months on Thursday, after it lowered two key short-term policy rates earlier this week. The annual rate of growth in investment is seen slowing to 4.4% from 4.7%, industrial production to 3.6% from 5.6%, and retail sales to 13.6% from 18.4%. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Jamie McGeever, Dow, disinflation Organizations: Federal, Fed, Nasdaq, Nikkei, Wednesday, People's Bank of, Institute of International Finance, Thomson, Reuters Locations: China, U.S, Japan, People's Bank of China, outflows, Beijing

☆ The inflation shock is over so there's no need for any more Fed rate hikes, the Institute of International Finance's chief economist says
▼ + stars: | 2023-06-14 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

"The US inflation shock is over", so the Fed need not hike interest rates any more, according to the chief economist of the Institute of International Finance. The IIF's measure of "inflation generalization" has fallen to the lowest level since February 2021, Robin Brooks said. US inflation has been steadily cooling from its mid-2022's highs, coming in at 4.0% in May on an annual basis. "The US inflation shock is over. While Brooks suggests the threat of inflation has faded, other market commentators have raised concerns inflation is sticky and can lead to stagflation.

Persons: Robin Brooks, —, Brooks, Goldman Sachs Organizations: Institute of International Finance, Service, CPI, Federal

☆ Investors channel billions into emerging markets, but China drops again-IIF
▼ + stars: | 2023-06-09 | by ( ) www.reuters.com time to read: +2 min

The fifth consecutive month of positive foreign investor cash flows to emerging markets came despite outflows of $7.2 billion from Chinese debt and a small $100 million inflow to the country's equities, the IIF found. Investor appetite for China has been cooling against a backdrop of disappointing data, deteriorating Sino-U.S. relations and regulatory crack-downs from Beijing that unsettled markets. Overall, investors put $6.9 billion into emerging market equities and $3.5 billion into debt. The bulk of the incoming cash - a total of $16.4 billion - went to Asian emerging markets, with equities in India, Taiwan and Korea drawing large investments. Investors pulled a total of $5.8 billion from emerging markets in Africa and the Middle East.

Persons: Amanda Perobelli LONDON, Jonathan Fortun, Fortun, Libby George, Toby Chopra Organizations: REUTERS, Institute of International Finance, Reuters, U.S, Investors, Thomson Locations: Sao Paulo, Brazil, outflows, China, U.S, Beijing, Asian, India, Taiwan, Korea, Africa, Outflows, South Africa

☆ IMF chief says there's no significant slowdown in lending and the Fed may need to do more
▼ + stars: | 2023-06-05 | by ( Jihye Lee | ) www.cnbc.com time to read: +2 min

The International Monetary Fund has yet to see enough banks pulling back on lending that would cause the U.S. Federal Reserve to change course with its rate-hiking cycle. "We don't yet see a significant slowdown in lending. The Federal Reserve in a May banks report warned that lenders are worried about conditions ahead, as trouble in mid-sized financial institutions in the U.S. caused banks to tighten lending standards for households and businesses. A majority of major global central banks, including the U.S. Federal Reserve, have tightened their monetary policy aggressively to tame soaring inflation. Meanwhile, the world's global debt has swelled to a near-record high of $305 trillion, according to the Institute of International Finance.

Persons: Georgieva, Kristalina Georgieva, Karen Tso, Pierre, Olivier Gourinchas, IIF Organizations: Monetary Fund, U.S . Federal Reserve, Federal Reserve, CNBC, Institute of International Finance Locations: Dubrovnik, Croatia, U.S

NEW YORK/LONDON, June 1 (Reuters) - A bill backed by debt justice campaigners and civil society groups advocating on behalf of economically distressed countries could alter past and future sovereign debt restructurings covered by New York state law - and Wall Street is watching. Senate Bill S4747, the NY Taxpayer and International Debt Crises Protection Act, "relates to New York state's support of international debt relief initiatives for certain developing countries." The initiative has so far failed to accelerate debt relief talks, while private creditors are not even formally included in this initiative. It would "bring badly needed improvements to the framework for resolving unsustainable sovereign debt burdens," according to Nobel Prize-winning U.S. economist Joseph Stiglitz. If this bill passes, "I would recommend issuers not go through New York law, (but) through London or any other jurisdiction," said Rodrigo Olivares-Caminal, professor of banking and finance law at Queen Mary University of London.

Persons: Bill S4747, Alexander Flood, Patricia Fahy, Kathy Hochul, Joseph Stiglitz, Rishikesh Ram Bhandary, THE BILL, Rodrigo Olivares, Caminal, Rodrigo Campos, Jorgelina, Karin Strohecker, Aurora Ellis Organizations: NY Taxpayer, Senate, Institute of International Finance, Paris Club, China, WHO, Economic, Initiative, Boston, Global, Policy, THE, Queen Mary University of London, Thomson Locations: New York, United States, Ukraine, Sri Lanka, Zambia, Rishikesh, London, Paris, Brazil, Argentina, Rosario

"A longer timeframe shows that foreign investors have been net sellers of Japanese equities by a considerable margin. We think long-term investors remain lightly positioned," they wrote last week in a note "Upside risks in Japanese equities". Non-residents sold nearly $4 billion of Chinese stocks in April, according to the Institute of International Finance, the first outflow in six months. Bank of America's monthly fund manager surveys show that "long" Chinese equities was the most crowded global trade in January. That has been scaled back significantly and investors have reduced their net overweight position in Chinese stocks, but they are still comfortably net overweight.

☆ Global debt nears record highs as rate hikes trigger 'crisis of adaptation,' top trade body says
▼ + stars: | 2023-05-18 | by ( Elliot Smith | ) www.cnbc.com time to read: +2 min

The G7 summit will be held in Hiroshima from 19-22 May. The finance industry body said the combination of such high debt levels and rising interest rates has driven up the cost of servicing that debt, triggering concerns about leverage in the financial system. Central banks around the world have been hiking interest rates for over a year in a bid to rein in sky-high inflation. The U.S. Federal Reserve earlier this month lifted its fed funds rate to a target range of 5%-5.25%, the highest since August 2007. "At close to $305 trillion, global debt is now $45 trillion higher than its pre-pandemic level and is expected to continue increasing rapidly: Despite concerns about a potential credit crunch following the recent turmoil in the banking sectors of the U.S. and Switzerland, government borrowing needs remain elevated," the IIF said.

"Global debt is now $45 trillion higher than its pre-pandemic level and is expected to continue increasing rapidly," said the IIF in its quarterly Global Debt Monitor. The report partly focused on the effects of last year's rapid rise in rates in some bank balance sheets. The IIF voiced its concern that tighter lending practices among smaller banks would hurt some businesses and households harder. "Shadow banks now account for more than 14% of financial markets, with the majority of growth stemming from a rapid expansion of U.S. investment funds and private debt markets." "With the interest rate differential between EMs and mature markets diminishing, EM local currency debt is less appealing for foreign investors," the IIF said.

"Global debt is now $45 trillion higher than its pre-pandemic level and is expected to continue increasing rapidly," said the IIF in its quarterly Global Debt Monitor. The report partly focused on the effects of last year's rapid rise in rates in some bank balance sheets. "Shadow banks now account for more than 14% of financial markets, with the majority of growth stemming from a rapid expansion of U.S. investment funds and private debt markets." But for others access to markets has been harder or non-existent on either tighter spreads as rates rose in developed markets or fast-rising borrowing costs. "With the interest rate differential between EMs and mature markets diminishing, EM local currency debt is less appealing for foreign investors," the IIF said.

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