Regulators in doubt where to wait for crisis

Regulators in doubt: where to wait for a crisis?

The financial crisis seems to have become an expected part of the economic cycle, but they seldom repeat themselves. In 1980-ies. was a hotbed of Latin America, in the late 1990s. – Russia and South-East Asia in 2007-2008. – US banks and the real estate market.
Today, some fear that a new crisis will happen in the asset management sector.

sector companies control $ 87 trillion, of BlackRock investment fund in the world’s biggest manages assets of $ 4.4 trillion, which is higher than the balance of any bank giant.
After the recent financial crisis, regulators have tightened business rules for banks: now they must have more capital and sufficient liquidity to cope with short-term pressures. But it can be an act of “the last and decisive battle.”

Having a situation where banks have sharply reduced their lending, companies are increasingly turning to debt instruments (which are mostly owned by investment funds) for lending, writes the British magazine The Economist.
asset management companies have been the cause of the financial problems in the past.

The collapse in 1998, the hedge fund Long Term Capital Management, which led by industry veterans, professors, and two Nobel Prize winners, has led to this shock on Wall Street and the urgent intervention of the Federal Reserve. Trying to save two hedge fund was one of the main reasons for the collapse of Bear Stearns in 2008
That same year, the money market funds managed by a group of Reserve, announced that the net value of its assets fell below $ 1 ( “break the buck”), with the result that the Fed once again had to intervene urgently.
All these events are quite concerned about the regulators.

In January, the international organization Financial Stability Board (Financial Stability Board) published a consultative paper, which offers qualified Asset management companies as “systemically important financial institutions” and their activities are strictly regulated.
The latest report of the Bank of England expressed concern about pension funds and insurance companies that are no longer performing the role of stabilization in the market and are increasingly using short-term market decline to make a profit by buying cheap assets.
In response, the asset management sector expressed their counterarguments. Firstly, funds act as stewards of capital clients, which is placed in separate accounts (with a third party, they act as gatekeepers). Banks such as Lehman Brothers, on the contrary, speculating customers money on their behalf.
Even if the asset management company will declare bankruptcy, its assets will be transferred to a competitor without losses to investors.

Hundreds of closed-end mutual funds every year, and their care has minimal impact on the market and does not require a rescue from the government.
Secondly, a comparison with incorrectly banks; except for hedge funds, asset management companies tend not to work with borrowed money. BlackRock balance of only $ 8.7 billion, while HSBC is almost $ 2.7 trillion, which is 300 times greater. Thus, the funds less vulnerable to an unexpected drop in prices for assets than banks that confirmed the crisis of 2008
Third, there is little evidence that the asset management company can become a cause of panic in the market. According to a nationwide non-profit organization The Investment Company Institute, the fall of 2008 or the stock market is at its lowest point in the mutual funds accounted for only 6% of all the shares of sales in New York.
All these arguments are quite convincing, and regulators do not hide that they are in a difficult situation, like between a rock and a hard place. Their goal is to anticipate future crises that may not be similar to the past. Following this logic, they are closely monitoring those sectors in which there was no crisis.

This alarm can be compared with the risk to the well-known game “Beat the mole” (Whack-a-mole), when the hammer has one seat and a toy mole jumps out from another location.
Some of the problems that worry regulators were partly their fault. For example, lack of liquidity in the corporate bond market is a result of the restrictions imposed after the crisis. If regulators this time decide to “put pressure” on the investment funds and asset management companies, they can get a situation similar to the game “Beat the mole.”

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Stock subsided America

Stock subsided America

Today
US stock futures show
very quiet dynamics before opening
markets, because investors are waiting
Janet Yellen speech. premarket
Futures on the Dow Jones and Nasdaq
slidand down to 0.01%, futures
on S P 500 “thin” in
0.04%.

planned
greater activity in the telecommunications
Sector: T-Mobile and Sprint
Corp start a price war between
themselves after their transaction
merger failed. premarket
declined stock prices Home
Depot (after the announcement about the change
manual). 0.74% shares gained Gap
after the earnings report that exceeded
analysts’ expectations.

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Options

options

Hello!

to * Mo * start of sobstv.sisteme options test) at the end of month. Share results …

* If successful-start on a real MT4 with poss th copy for investors

** Here is what the system = on October 1. = 14%

Options

Revenue growth in Ste. At times, in comparison with August. –NO– was large drawdowns -ok.40%, therefore, optimizes the system further

* Here is what the system = 2 weeks + 2% =Options

should be optimized, with the subsidence – early on Real – / trace-e results of test at the end of September.

With you, Victor

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Its index of German economic sentiment rose sudd

Its index of German economic sentiment rose suddenly

Index
“The index of economic sentiment
Germany “unexpectedly significantly
above forecast. when we predict
value of 4.8 points, he was on the
level 6.9. This is good news – because
they mean that the business environment
“Locomotive” of the euro zone, even though
the difficult situation in the European
economy is still willing to work and
develop.

On
Against this background, one can expect temporary
strengthening of the euro and some growth check
European indices. However, all this
may be hampered by the fact that
investors await the Fed meeting and the information
on it.

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DAILY FORECAST FOR ACTUAL SETTINGS

DAILY FORECAST FOR ACTUAL SETTINGS

Today I want to talk about a couple of evrobritanets. judging by my traffic strategy will be strong (volatility).

Once again I look to my robot, which is written by the correlation group of currencies. Investors willing to consider. In the meantime, here’s my predictionDAILY FORECAST FOR ACTUAL SETTINGS

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Busy gold

The busy gold

On
Recently gold has risen in price after a week
sliding down: on the Russian-Ukrainian
increased border tensions. AT
a result of the demand for gold has grown –
Investors tried to “escape” from the risks
transferring its assets in a trouble-free
reserve.

However, a meeting was held yesterday in
Minsk between the presidents of Russia and
Ukraine, the parties tried to negotiate
to resolve the conflict. It is clear that to
the end of the talks is still far away, but
the fact of the peace talks again made
gold pass correction process: it
again went down.

Today
Gold is trading around $ 1280.50
per troy ounce. Supports – at
1270 dollars and below – 1240 dollars.
The resistance for the near future – on
$ 1300 and above – in the field
$ 1324 – 1325.

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Eurozone in anticipation of trouble

Eurozone: in anticipation of trouble

If Germany, France and Italy did not find a way to lift the European economy afloat, the euro is doomed. Just a few years ago, the leaders of the euro area thought that after the storm finally came clear days. Due to the promises of Mario Draghi, President of the European Central Bank, to “do everything possible” to maintain currency, confidence has returned to the continent. It seemed as growth resumed, albeit at a slow pace. Distressed peripheral countries were restored after the adoption of the rescue and painful measures to reduce the budget deficit and improving the competitiveness of the programs. Unemployment, particularly among young people, remained extremely high, but at least it was reduced in most countries. Spreads on bonds fell sharply against the background of the fact that the financial markets have ceased to believe in the euro disintegration. It was an illusion. In recent years the euro area gave the boat again to flow. In the second quarter of their combined GDP stagnating in Italy again he slipped into a clear recession, French GDP remained unchanged, and even mighty Germany was faced with an unexpectedly strong decline in performance. The figures for the third quarter look anxious, partly because of the growth in the Eurozone will slow down even more because of Western sanctions against Russia. At the same time, inflation dropped to a dangerously low level, up to about 0.4%, well below the target of 2%, the European Central Bank. Because of this, there are fears that the euro area as a whole could become a victim of extensive deflation. The yield on German bonds is less than 1% – another harbinger of falling prices. The euro zone is in stark contrast with the United States and Britain, whose economy has been experiencing steady growth.

The fact that four years ago began as a banking crisis has turned into a crisis of growth, which now covers three major economies. Germany is teetering on the brink of recession. France gripped by stagnation. Italy’s GDP barely exceeds the level achieved at the input of the single currency 15 years ago. Since the share of these three countries account for two-thirds of the GDP of the Eurozone, growth in countries such as Spain and the Netherlands, can not compensate for their lethargy. The root causes of the new Europe of adversity are three very familiar and interrelated problems. The first – the lack of political leaders with courage and determination, which are necessary for the implementation of structural reforms to enhance competitiveness and, ultimately, the resumption of growth: large country lost two years, bought the promise of Mr. Draghi, to do “everything possible”. The second – the public is not sure of the acute need for radical change. And the third problem: despite the efforts of Mr. Draghi, the monetary and fiscal conditions are too stringent and restrict growth, which complicates the implementation of structural reforms.

Economic Reforms

In the euro area are noticeably different manifestations of these problems. But the most acute problems of all three appear in France. Recently, its president, Socialist Fransua Olland was forced to change the composition of the government to remove it from the Arno Monteburga that, despite the post of minister of economy, persistently criticized the current policy. Mr Hollande, who became president in 2012 on a promise of cloudless future, can hardly be called a reformer, like Thatcher. But after March, he appointed Manuel Valls Prime Minister, at least he has implemented the principles of public spending cuts, tax cuts and structural reforms. In theory, a new and more cohesive government might succeed, but public opinion is not ready for this. Mr Hollande is not just unpopular; in contrast to the Italian Prime Minister Matteo Renzi, who led a strong case for tough reforms (still held), the French president was unable to convince voters that the pathological changes, including a reduction in the state budget, are inevitable. Instead, Mr. Monteburg and his team make a tempting offer: if the Eurozone will cancel the existing rules and allow an increase in the budget deficit and government spending, painful reforms will no longer be needed as the economy miraculously yourself get out of a dangerous situation.

Mr. Monteburg rights with respect to the third European problems: excessive austerity, mainly carried out in the continent Germany. At the annual economic meeting in Jackson Hole, Mr. Draghi implicitly admitted that in the euro area held too tight fiscal and monetary policy. He hinted that he was in favor of quantitative easing, and used by America and Britain and called to ensure that fiscal policy is more conducive to stimulate growth – a message that was clearly addressed to German Chancellor Angela Merkel. That’s all it strongly insists on the respect of budgetary discipline in the euro area, just as the German Bundesbank most opposed to quantitative easing.

Angie, you’ve never tried

Despite the general gloom, it should be possible for the negotiations. If Mr. Hollande and Mr. Renzi will be able to show a sincere desire to carry out structural reforms, Ms. Merkel must agree on a less tight fiscal policy (including an increase in public investment in Germany) and a looser monetary policy. Close your eyes and imagine how these three leaders are working with the European Commission on the completion of the single market and the promotion of trade deals with the United States. Unfortunately, in reality, Ms. Merkel is no particular reason to believe France or Italy, when the external pressure exerted on them weakened, they immediately abandoned the commitment to reform. She also promoted Jean-Claude Juncker, to do nothing of the candidate, as president of the European Commission. So, it will be difficult. But without a new push by the European leaders will not resume growth, and deflation is restored. Japan experienced a lost decade in the 1990s., And is still struggling with the consequences. But unlike Japan, Europe is not a single and united country. If monetary union will bring only stagnation, unemployment and deflation, some people in the end will vote for an exit from the Eurozone. Due to the promise of Mr. Draghi set the lower limit of the national debt, backed the market risk related to the fact that financial pressure can cause the collapse. However, the political risk that one or more countries decide to abandon the single currency is constantly increasing. The euro crisis is not over, he was waiting on the horizon.

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British pound rose as Bank of England head hinted

The British pound rose as the Bank of England head hinted at a rate hike

Managing the Bank of England Mark Karni said Wednesday that the rise in interest rates in the UK in the next few months may be more appropriate if the economy continues to gain momentum despite the weak performance of consumer spending. After his words the British pound rose 1% against the US dollar.
During his speech at the forum of the European Central Bank in Portugal Carney said that in the case of accelerating the growth of wages and investment companies, he will think over whether to keep the Bank of England’s key rate at a record low of 0.25%. Earlier this month, Carney advocated the preservation of the previous monetary policy, since, in his words, the regulator had to balance between accelerating inflation and slowing economic growth in the UK.
Shortly after Carney’s comments British pound rose 1.1%, to 1.2954 US dollar, reaching its highest level in three weeks. The yield on 10-year UK bonds jumped to 1.181%, the highest since the beginning of May, against 1.078% at the close on Tuesday.
"Partial rejection of the stimulus measures are likely to be necessary, as the Bank of England will no longer have to make compromises, and the decision-making process will go to normal", – he said.
Comments Carney suggests that the Bank of England yet close to raising rates after reducing them after last year’s referendum on membership in the UK ES.Istochnik: “News Feed”

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Review of financial and economic press Investors

Review of financial and economic press: Investors are afraid of the recession in the eurozone

RBC-Daily

Investors feared a recession in the eurozone

the euro zone economy at the beginning of September is in a recession, it follows from the press release of the research company Sentix. It is dedicated to the publication of that index investors’ confidence in the euro zone. Index decreased for two consecutive months. In this case, the September figures were significantly worse in August. If last month’s index was 2.7 points, but this month it dropped to negative values, to -9.8 points. This is the worst rate since July 2013, the company said.

Entry into force of the new EU sanctions slowed Finland

Finland opposed the introduction of new sanctions against Russia, which is why the EU has to be postponed for a few days of their introduction. About this newspaper The Wall Street Journal citing a statement by Prime Minister Aleksandra Stubba. According to him, the Finnish position is that the EU should wait for the introduction of new economic sanctions against Russia. “Finland as a whole does not believe that now is the right time [for sanctions],” – said Stubb. He added that “more will be discussions about the extent to which [the sanctions] will be published in the Official Journal of the EU.”

Washington insists on the introduction of new sanctions against Russia

Washington insists that the US and EU imposed new sanctions against Russia because of the situation in Ukraine. ITAR-TASS reported with reference to the official representative of the National Security Council of the White House. According to the NSS officer, the US government “is in the same position, which on Friday laid out US President Barack Obama at the end of the next NATO summit.”

DW

German Chancellor: Sanctions – the only means of pressure on the Russian Federation

Sanctions are the only means of pressure on Russia. This opinion was expressed Germany’s Chancellor Angela Merkel (Angela Merkel) in broadcasted on Tuesday, September 9 interview with German radio station rbb-Inforadio. The direct participation of Russia in the Ukrainian conflict "very, very obvious"And its action should not be left without consequences. Nevertheless, the German government has no doubt that the military way this conflict can not be solved, said Angela Merkel.

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Frank is growing in spite of everything

Frank is growing, in spite of everything

The Swiss franc strengthened on Thursday, after the central bank abandoned the introduction of negative interest rates on deposits, but has confirmed his intention to defend the lower limit set by them for the euro / franc in 2011 at the level of 1.2000. Swiss National Bank has introduced a binding to the euro at the peak of euro crisis, after the massive inflow of foreign capital, streamed into the country in search of refuge. Exchange rate the Swiss franc against the single currency closer to parity, jeopardizing the future of Swiss exporters and intensifying downward pressure on inflation. The central bank promised to buy euros in unlimited quantities to stop the strengthening of the franc on the border 1.20. It was assumed that this measure will be temporary, but it’s been three years, and the upward pressure on the franc does not weaken. Moreover, it has even increased as stimulating monetary policy of the ECB is the euro devaluation. Frank crept close to 1.20 immediately after reduction by the ECB and the launch of a quantitative easing program announcement at the September meeting.

"The three-month Libor rate close to zero, so the minimum exchange rate remains the main instrument for regulating monetary conditions"- Central Bank officials said, adding that the economic situation is deteriorating, and the threat of deflation takes real shape of the strengthening of the franc. According to analysts, the SNB has refrained from intervening in the foreign exchange market, because in August the Central Bank’s foreign exchange reserves have not changed. Some investors had hoped that Switzerland will follow the example and the ECB will lower the deposit rate below zero, to weaken the franc – that is, financial institutions will have to pay extra for hosting central bank money in his accounts.

The Central Bank made it clear that they are willing to resort to such a measure. In addition, in an accompanying statement said that the Central Bank "I am ready to buy foreign currency in unlimited quantities"To achieve its political objectives, and, if necessary, take further measures without delay" – it says that the Bank is ready to act at any time, not only at regular meetings. However, until they decide to leave a negative rate reserve. "They keep abreast of"- shoals Michael Sneyd, strategist at BNP Paribas, but Dzheyn Fouli of Rabobank noted a high probability of intervention. A negative rates will remain as a last resort, in the event that the ECB will start an ambitious program of QE. Frank grew by 0.5% against the US dollar and by 0.3% to 1.2069 against the euro. Strengthening of the franc during the euro crisis is likely to have been due to the stampede of investors, but now it seems, is structural. Over the past year the currency weakly responds to risk aversion. Meanwhile, JPMorgan analysts noted that Switzerland has a chronic imbalance of payments, where the current account surplus is too high, so that it can be eliminated through capital flight. Source: Forexpf.Ru – Forex Market News

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