Föhrenbergkreis Finanzwirtschaft

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Posts Tagged ‘IMF’

How To Deal With Failed Banks

Posted by hkarner - 4. Juli 2018

By Deniz Igan, IMF Blog

July 3, 2018

Reforms since the global financial crisis have made bail-ins a credible option and bail-outs less likely 

During the global financial crisis, policymakers faced a steep trade-off in handling bank failures. Using public funds to rescue failing banks (bail-outs) could weaken market discipline and lead to excessive risk taking—the moral hazard effect.

Letting private investors absorb the losses (bail-ins) could destabilize the financial sector and the economy as a whole—the spillover effect. In most cases, banks were bailed out.

This created public resentment and prompted policymakers to introduce measures to shift the burden of bank resolution away from taxpayers to private investors.

Resolving a failing bank should rely on bail-ins: private stakeholders should bear the losses. Den Rest des Beitrags lesen »

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Estimating Cyber Risk for the Financial Sector

Posted by hkarner - 23. Juni 2018

June 22, 2018

Average annual losses to financial institutions from cyber-attacks could reach a few hundred billion dollars a year 

Cyber risk has emerged as a significant threat to the financial system. An IMF staff modeling exercise estimates that average annual losses to financial institutions from cyber-attacks could reach a few hundred billion dollars a year, eroding bank profits and potentially threatening financial stability.

Recent cases show that the threat is real. Successful attacks have already resulted in data breaches in which thieves gained access to confidential information, and fraud, such as the theft of $500 million from the Coincheck cryptocurrency exchange. And there is the threat that a targeted institution could be left unable to operate.

Not surprisingly, surveys consistently show that risk managers and other executives at financial institutions worry most about cyber-attacks, as in the graphic below. Den Rest des Beitrags lesen »

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The Perils of Corporate Concentration

Posted by hkarner - 21. Juni 2018

Date: 20-06-2018
Source: The Wall Street Journal By William A. Galston

U.S. companies are too big and have too much market power. Workers are suffering.

Amid the din of daily political combat, it’s easy to overlook long-term trends reshaping the country. The stock market has quadrupled since 2009’s Great Recession low, but the growth of real wages has failed to accelerate, even as unemployment has fallen from 10% to under 4%. An International Monetary Fund paper published earlier this month suggests these developments are linked to a single cause—increasing corporate concentration throughout the U.S. economy.

A standard definition of market power, say the authors of the IMF paper, is the ability to maintain prices above marginal cost—the level that would prevail under perfect competition. They find that between 1980 and 2016, markups by U.S. companies have increased by an average of 42%. Although markups have risen in all major industry sectors, some have experienced increases far above the average, led by 419% for biotechnology. Not surprisingly, there is a strong relationship between markups and profitability.

There is also evidence that markups are related to market concentration, which has surged in recent decades. Since the mid-1990s the standard measure of concentration used in antitrust analysis, the Herfindahl-Hirschman Index, has risen by 50%. Den Rest des Beitrags lesen »

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The Anatomy of Global Debt

Posted by hkarner - 17. Juni 2018

Howard Davies, the first chairman of the United Kingdom’s Financial Services Authority (1997-2003), is Chairman of the Royal Bank of Scotland. He was Director of the London School of Economics (2003-11) and served as Deputy Governor of the Bank of England and Director-General of the Confederation of British Industry.

The IMF’s new Global Debt Database is an impressive piece of work. And the numbers suggest that the so-called debt intensity of growth has increased: we seem to need higher levels of debt to support a given rate of economic than we did before.

LONDON – At the end of May, the International Monetary Fund launched its new Global Debt Database. For the first time, IMF statisticians have compiled a comprehensive set of calculations of both public and private debt, country by country, constructing a time series stretching back to the end of World War II. It is an impressive piece of work.

The headline figure is striking. Global debt has hit a new high of 225% of world GDP, exceeding the previous record of 213% in 2009. So, as the IMF points out, there has been no deleveraging at all at the global level since the 2007-2008 financial crisis. In some countries, the composition of debt changed, as public debt replaced private debt in the post-crisis recession, but that shift has now mostly stopped.

Are these large figures alarming? In aggregate terms, perhaps not. At a time when economic growth is robust almost everywhere, financial markets are relaxed about debt sustainability. Long-term interest rates remain remarkably low. But the numbers do tend to support the hypothesis that the so-called debt intensity of growth has increased: we seem to need higher levels of debt to support a given rate of economic growth than we did before. Den Rest des Beitrags lesen »

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Creating a Better Global Trade System

Posted by hkarner - 30. Mai 2018

May 29, 2018

Trade in services has risen dramatically and the use of technology is changing how countries trade with each other 

Recent news on global trade has tended to focus on protectionist measures and diplomatic tensions. These challenges have raised concerns over growth and jobs across the world.

Yet what is often lost in the current discussions is that we are entering a new era of trade—an era in which data flows are becoming more important than physical trade.

The new era

Think about it: between 1986-2008, global trade in goods and services grew at more than twice the rate of the global economy. In recent years, however, growth in this more traditional type of trade has barely exceeded global GDP growth. Den Rest des Beitrags lesen »

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Technology and the Future of Work

Posted by hkarner - 2. Mai 2018

By Adrian Peralta, and Agustin Roitman, IMF Blog

May 1, 2018

Technology impacts how we work 

Many feel anxious about the impact of new technology on their jobs. This is not new. In fact, it dates back at least to the Luddites movement at the outset of the Industrial Revolution. And it resurfaced during the Great Depression and again in the 1960s, following a period of high productivity growth, and in the 1980s at the outset of the IT revolution.

How can governments help? By investing in peoples’ skills.

A dramatic shift

In the past, technological advances have helped raise incomes for most. But we should not forget that the transitions involved—for workers, firms, sectors, and whole economies—have been difficult for many.

Many observers think the latest wave of technological innovation will be more disruptive than the ones in the past, especially for labor. They point to the timid growth of real wages and the falling labor share in national income in recent decades. New technological advances—in artificial intelligence, automation and robotics—might be even more dramatic. This is because of the presumed ease with which some technologies can substitute for a broad range of human skills. Den Rest des Beitrags lesen »

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Mounting Debt Threatens Sustainable Development Goals

Posted by hkarner - 28. April 2018

By Chris Lane and Elliott Harris, IMF Blog

April 27, 2018

Some developing countries are falling behind when it comes to incomes .

In 2015, 193 countries adopted the 17 Sustainable Development Goals (SDGs) as an overarching policy roadmap through 2030. These goals are predicated on the idea that for a sustainable future, economic growth must go hand-in-hand with social inclusion and protection of the environment.

Our respective institutions, the United Nations Department of Economic and Social Affairs (UNDESA) and the International Monetary Fund (IMF), fully support these goals. From the UN perspective, they represent a down payment on a more peaceful, prosperous, and cooperative world, especially in increasingly perilous times. For the IMF, they help underpin economic stability and sustainable and inclusive economic growth.

In 2017, most types of development financing flows increased, helped by an upturn in the world economy, increased investment, and supportive financial market conditions. Yet less than three years after adoption, the implementation of the SDGs is running into a major hurdle—rising public debt in some developing countries. This is the sobering message of a new report on financing for development issued by the UN, in collaboration with the IMF and almost 60 other agencies. Den Rest des Beitrags lesen »

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Shining a Bright Light into the Dark Corners of Weak Governance and Corruption

Posted by hkarner - 24. April 2018

By Christine Lagarde, IMF Blog

April 22, 2018

Anti-corruption strategies require broader regulatory and institutional reforms (Kritchanut/iStock).

The IMF Executive Board has just endorsed a new framework for stepping up engagement on governance and corruption in our member countries. Let me talk about why this is important and what it means for our work.

Costs of corruption

We all know that entrenched corruption is economically pernicious, undermining the ability of countries to deliver inclusive and sustainable economic growth. Den Rest des Beitrags lesen »

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Bringing Down High Debt

Posted by hkarner - 19. April 2018

By Vitor Gaspar and Laura Jaramillo, IMF Blog

April 18, 2018

High debt makes governments’ financing vulnerable to sudden changes in market sentiment 

Global debt hit a new record high of $164 trillion in 2016, the equivalent of 225 percent of global GDP. Both private and public debt have surged over the past decade. High debt makes government’s financing vulnerable to sudden changes in market sentiment. It also limits a government’s ability to provide support to the economy in the event of a downturn or a financial crisis.

Countries should use the window of opportunity afforded by the economic upswing to strengthen the state of their fiscal affairs. The April 2018 Fiscal Monitor explores how countries can reduce government deficits and debt in a growth-friendly way.

High government debt is a concern

Of the $164 trillion, 63 percent is nonfinancial private sector debt, and 37 percent is public sector debt. Advanced economies are responsible for most global debt. Nevertheless, in the last ten years, emerging market economies have been responsible for most of the increase. China alone contributed 43 percent to the increase in global debt since 2007. In contrast, the contribution from low income developing countries is barely noticeable. Den Rest des Beitrags lesen »

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IWF-Finanzministertreffen in Zeiten der Mega-Nervosität

Posted by hkarner - 14. April 2018

„Das System fester Regeln und einer gemeinsam getragen Verantwortung im Welthandel droht zerrissen zu werden“, warnt die Chefin des Internationalem Währungsfonds.

Selten fanden Tagungen von Internationalem Währungsfonds (IWF) und Weltbank in den vergangenen Jahren in einem derart angespannten Umfeld statt wie die Frühjahrstagung in der kommenden Woche in Washington. „Die Nervosität ist zum Greifen“, merkt ein langjähriger Teilnehmer an. Dabei scheint, wenn man allein die Wachstumszahlen der Weltwirtschaft betrachtet, alles im Lot. Das sagt auch IWF-Chefin Christine Lagarde. „Aber die Jubel-Stimmung von vor einem Jahr ist verflogen“, beschreibt ein Insider. Viel zu bedrohlich sei, was in der Welt geschehe. Die Liste ist lang: vom massiven US-Handelsstreit mit China und anderen Staaten über die Unsicherheiten durch einen völlig unberechenbaren US-Präsidenten, das drastisch verschlechterte Verhältnis des Westens zu Russland bis hin zu militärischen Konflikten, insbesondere dem in und um Syrien. Den Rest des Beitrags lesen »

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