Posts belonging to Category IMF



Global Debt Hits Record $233 Trillion

The ratio of debt-to-gross domestic product is now 318 percent

Global debt rose to a record $233 trillion in the third quarter of 2017, more than $16 trillion higher from end-2016, according to an analysis by the Institute of International Finance. Private non-financial sector debt hit all-time highs in Canada, France, Hong Kong, South Korea, Switzerland and Turkey.

At the same time, though, the ratio of debt-to-gross domestic product fell for the fourth consecutive quarter as economic growth accelerated. The ratio is now around 318 percent, 3 percentage points below a high set in the third quarter of 2016, according to the IIF.

http://bloomberg.com/ … Mon., 08  January 2018

SEC warns bitcoin, cryptocurrency investors at risk

Investors should “exercise caution”

The U.S. Securities and Exchange Commission warned Thursday that investors should “exercise caution” with cryptocurrencies like bitcoin, noting state and federal regulators may not be able to recoup any lost investments from illegal actors.

Many promoters of initial coin offerings (ICOs) and other cryptocurrency investments are not following federal and state securities laws, SEC Chairman Jay Clayton and Commissioners Kara Stein and Michael Piwowar said in a statement. While regulators are trying to police these quickly growing markets, the SEC urged investors to be vigilant.

http://reuters.com/ … Fri., 05  January 2018

Bitcoin Futures Launch Sees Price Spike

CBOE Website Crashes

The Chicago Board Options Exchange (CBOE)’s website became unavailable just as it launched its first bitcoin futures contracts at 6 p.m. EST on Sunday.

The website downtime – which CBOE attributed to significant traffic around the futures launch in a post on Twitter – coincided with a sudden surge in the price of bitcoin, which jumped from $14,509 at 22:59 UTC to $15,732 at 23:06 UTC according to CoinDesk’s Bitcoin Price Index (BPI). Yet as of press time, CBOE’s website is becoming more available – delayed information about the contracts being offered can be found here – and the price of bitcoin has maintained a somewhat steady pace since that initial jump, trading at $15,226.29 per the BPI.

The data coming in thus far suggest that buyers are indeed moving to purchase contracts. Activity has been largely centered around the first contract to expire, dated January 17, 2018, with social media posts pointing to purchases of contracts scheduled to expire on March 14. According to CNBC, 672 January contracts have been sold as of 7:10 pm EST, with the news service reporting a price of $15,800.

http://www.coindesk.com… Mon., 11  December 2017

EU blacklist names 17 tax havens

Caymans and Jersey on notice

The EU has named and shamed 17 countries in its first ever tax haven blacklist and put a further 47 on notice, including British overseas territories and the crown dependencies of Jersey, Guernsey and the Isle of Man, in an attempt to clamp down on the estimated £506bn lost to aggressive avoidance every year. The move was hailed as a vital “first step” but the failure of the member states to agree on any sanctions for those on the blacklist provoked the European commissioner for economic and financial affairs, Pierre Moscovici, to concede it was as yet “an insufficient response”.

The blacklist includes South Korea, Mongolia, Namibia, Panama, Trinidad & Tobago, Bahrain and the United Arab Emirates. Guam, the US territory in the Pacific, also features on the blacklist, in a move that is unlikely to endear Brussels to Donald Trump’s White House.
http://www.theguardian.com… Thu., 07  December 2017

London loses EU agencies to Paris and Amsterdam in Brexit relocation

Paris won the race to take the European Banking Authority from London

London is losing the European Medicines Agency to Amsterdam and the European Banking Authority to Paris, in one of the first concrete signs of Brexit as the UK prepares to leave the European Union. The two cities won the agencies after tie breaks that saw the winner selected by drawing lots from a large goldfish-style bowl.

The Dutch capital beat Milan in the lucky dip after three rounds of Eurovision-style voting on Monday had resulted in a dead heat.

Paris won the race to take the European Banking Authority from London, beating Dublin in the final, after the favourite Frankfurt was knocked out in the second round.

http://www.theguardian.com…  Tue., 21  November 2017

Saudi Arabia needs oil at $70 to break even

The break-even is a measure of the crude price needed to meet spending plans

Saudi Arabia, OPEC’s biggest oil producer, is also a leader when it comes to slashing the crude price the country needs to balance its budget.

The kingdom will need oil to trade at $70 a barrel next year to break even, the Washington-based International Monetary Fund said Tuesday in its Regional Economic Outlook for the Middle East and Central Asia. That’s down from a break-even of $96.60 a barrel in 2016, the biggest drop of eight crude producers in the Persian Gulf. The break-even is a measure of the crude price needed to meet spending plans and balance the budget.

http://www.arabianbusiness.com…  Thu.,  02  November 2017

Bridgewater founder is not a believer in cryptocurrencies

Ray Dalio, founder of the world’s largest hedge fund, says ‘bitcoin is a bubble’

Bridgewater Associates founder Ray Dalio said Tuesday he is not a believer in cryptocurrencies. “Bitcoin today you can’t make much transactions in it. You can’t spend it very easily,” Dalio said on CNBC’s “Squawk Box.” “It’s not an effective storehold of wealth because it has volatility to it, unlike gold,” the hedge fund founder added. “Bitcoin is a highly speculative market. Bitcoin is a bubble.”

The investor said there are two important facets to being considered a valid currency: ease of transactions as a medium of exchange and being a “storehold of wealth.” “It’s a shame, it could be a currency. It could work conceptually, but the amount of speculation that is going on and the lack of transactions [hurts it],” he said.

http://www.cnbc.com…  Mon.,  09  October 2017

First big Wall Street firm to deal directly in the cryptocurrency market

Goldman Sachs Explores a New World: Trading Bitcoin

Goldman Sachs is flirting with the idea of setting up a bitcoin trading shop. The Wall Street powerhouse is in the very early stages of potentially setting up a bitcoin trading operation, according to a report by The Wall Street Journal’s Paul Vigna, Telis Demos, and Liz Hoffman. “In response to client interest in digital currencies we are exploring how best to serve them in this space,” a Goldman spokeswoman told The Journal.

If Goldman follows through, it will be the first blue-chip financial services firm to break into the cryptocurrency market, which this year has exploded in value. Goldman’s C-Suite has kept pretty quiet about digital coins. The rest of Wall Street has mixed reviews. On one hand, JPMorgan CEO Jamie Dimon called bitcoin “a fraud” and likened it to the tulip-bulb bubble of the 1600s. On the other, James Gorman, Morgan Stanley’s CEO, has taken a more moderate position on bitcoin, saying last week it was “more than just a fad.”

http://businessinsider.com…  Tue.,  03  October 2017

US debt is still climbing

The US government just passed $20 trillion in debt for the first time ever

For the first time in its history, the US federal government has more than $20 trillion in outstanding debt.

The milestone was technically hit Friday, with the Treasury Department settling its accounts at the end of the day with $20,162,176,797,904 of debt outstanding. Of that debt, the Treasury said $14,622,661,213,046 is held by the public, while $5,539,515,584,857 is held by various parts of the government, also known as Intragovernmental Holdings.

http://www.businessinsider.com…  Tue.,  12  September 2017

EU explores account freezes to prevent runs at failing banks

Discussions were due to continue in September

European Union states are considering measures which would allow them to temporarily stop people withdrawing money from their accounts to prevent bank runs, an EU document reviewed by Reuters revealed. The move is aimed at helping rescue lenders that are deemed failing or likely to fail, but critics say it could hit confidence and might even hasten withdrawals at the first rumors of a bank being in trouble.

The proposal, which has been in the works since the beginning of this year, comes less than two months after a run on deposits at Banco Popular contributed to the collapse of the Spanish lender.

It also come amid a bitter wrangle among European countries over how to deal with troubled banks, roughly a decade after a financial crash that required the European Central Bank to print billions of euros to prevent a prolonged economic slump.

http://www.reuters.com…  Fri.,  08  September 2017

Jackson Hole meeting in focus

Speeches by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi on Friday will be scrutinized

U.S. stocks dipped on Thursday as political uncertainty in Washington kept investors cautious ahead of comments on monetary policy from central bankers gathered for their annual meeting in Jackson Hole, Wyoming. Speeches by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi on Friday will be scrutinized for hints on the path of monetary policy, but neither of them is expected to give fresh guidance.

The focus on central bankers’ views will be a departure from the past two weeks, when the stock market was roiled by concerns over geopolitics, mayhem in Washington, and President Donald Trump’s controversial comments. President Donald Trump picked a new fight with fellow Republicans whose support he needs to advance his policy agenda, saying congressional leaders could have avoided a “mess” over raising the U.S. debt ceiling if they had heeded his advice.

http://www.reuters.com…  Fri.,  25  August 2017

Bitcoin and Bitcoin Cash

Orders for bitcoin cash are ‘exploding’

On Tuesday afternoon, bitcoin split into two in an event known as a “hard fork” that has divided the virtual currency’s online community.

Two competing strands of bitcoin emerged after some of its leading backers disagreed on the best way to take it forward.

The price of the cryptocurrency fell by around 4pc to around $2,700 (£2,000) after the fork, while the predicted price of Bitcoin cash rose from just over $200 to about $370, but traders are still unsure what will happen when the dust settles.

http://www.telegraph.co.uk…   Wed.,  02  August 2017

US debt default would be like Lehman crash

Raising the debt ceiling

A U.S. debt default would create significant confusion and uncertainty in financial markets and could prove as catastrophic as the failure of Lehman Brothers in 2008, the Organization for Economic Cooperation and Development (OECD) said in a new report.

Lawmakers in the U.S. side-stepped a debt default at the 11th eleventh hour in October and brought an end to prolonged negotiations over raising the debt ceiling. But talks are set to resume in the new year with the debt ceiling extended until February 7 and funding approved until January 15.

“An outright default would have extremely severe effects” the OECD said in the report, released on Tuesday.

http://www.cnbc.com…  Mon.,  12  June 2017

Greek debt deal

Euro zone, IMF to seek compromise

Euro zone finance ministers and the International Monetary Fund will seek a deal on Monday on Greek debt relief that balances the IMF’s demand for a clear “when and how” with Germany’s preference for “only if necessary” and “details later”. Without the deal, no new loans can be disbursed to Athens, even though the bailout is now handled only by euro zone governments, and Greece needs new credit to repay some 7.3 billion euros worth of maturing loans in July.

Without the loans, Athens is likely to default – a bad start for a country that wants to return to market financing next year when its latest bailout, the third since 2010, ends in mid-2018. For its part, Greece has done what it could to secure a deal. It has agreed, albeit after months of negotiations, with the euro zone lenders and the IMF on pensions and tax reforms.

http://www.reuters.com…  Mon.,  22  May 2017

The world's 100 largest banks

23 banks with more than a $1 trillon of assets

China’s largest banks kept growing in 2016, but the currency turmoil unleashed by Brexit battered European companies in S&P Global Market Intelligence’s latest global bank rankings.

China’s “Big Four” — Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Agricultural Bank of China Ltd. and Bank of China Ltd. — all maintained their rank as the four largest banks in the world with a combined $11.910 trillion in assets as of Dec. 31, 2016. Tokyo-based Mitsubishi UFJ Financial Group Inc. retained its place as the world’s fifth largest bank at $2.590 trillion in assets.

Brexit was not kind to European currencies in 2016 — the euro bought $1.055 at the end of 2016, compared to $1.086 a year earlier, while the British pound fell to $1.235 from $1.474 over the same period. The drop in the pound alone knocked $289.53 billion off of the asset value for London-based Barclays Plc, which fell two spots in the ranking to No. 17 with $1.496 trillion in assets; the bank’s assets would have been $1.785 trillion if converted to U.S. dollars using the year-end 2015 exchange rate.

http://www.snl.com…  Fri.,  21 April 2017

Political and financial risks threaten global growth

Will risks and financial vulnerabilities derail the modest recovery?

Global growth is projected to pick up to around 3½ per cent in 2018, from just under 3% in 2016 in our latest Interim Economic Outlook. The forecast modest recovery is supported by fiscal initiatives in major economies and broadly unchanged from the November Economic Outlook. While the pick-up is welcome, it would still leave global growth below the historical average of around 4% for the two decades prior to the crisis. This comes against the background of a five-year period where the global economy has been stuck in a low-growth trap. Consumption, investment, trade and productivity are far from strong and inequality is rising.Productivity gaps between frontier firms and laggard firms have widened, contributing to a growing income gap as wages have stagnated at less productive firms.

http://www.oecdecoscope.com…  Wed,  08 March 2017