Download or read book Institutionalizing Countercyclical Investment written by Bradley Jones and published by International Monetary Fund. This book was released on 2016-02-29 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Do portfolio shifts by the world’s largest asset owners respond procyclically to past returns, or countercyclically to valuations? And if countercyclical investment (with both market-stabilizing and return-generating properties) is a public and private good, how might asset owners be empowered to do more of it? These two questions motivate this study. Based on analysis of representative portfolios (totaling $24 trillion) for a range of asset owners (central banks, pension funds, insurers and endowments), portfolio changes typically appear procyclical. In response, I suggest a framework aimed at jointly bolstering long-term returns and financial stability should: (i) embed governance practices to mitigate ‘multi-year return chasing;’ (ii) rebalance to benchmarks with factor exposures best suited to long-term investors; (iii) minimize principal-agent frictions; (iv) calibrate risk management to minimize long-term shortfall risk (not short-term price volatility); and (v) ensure regulatory conventions do not amplify procyclicality at the worst possible times.
Download or read book Institutionalizing Countercyclical Investment written by Bradley A. Jones and published by . This book was released on 2016 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Institutionalizing Countercyclical Investment written by Bradley Jones and published by International Monetary Fund. This book was released on 2016-02-29 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Do portfolio shifts by the world’s largest asset owners respond procyclically to past returns, or countercyclically to valuations? And if countercyclical investment (with both market-stabilizing and return-generating properties) is a public and private good, how might asset owners be empowered to do more of it? These two questions motivate this study. Based on analysis of representative portfolios (totaling $24 trillion) for a range of asset owners (central banks, pension funds, insurers and endowments), portfolio changes typically appear procyclical. In response, I suggest a framework aimed at jointly bolstering long-term returns and financial stability should: (i) embed governance practices to mitigate ‘multi-year return chasing;’ (ii) rebalance to benchmarks with factor exposures best suited to long-term investors; (iii) minimize principal-agent frictions; (iv) calibrate risk management to minimize long-term shortfall risk (not short-term price volatility); and (v) ensure regulatory conventions do not amplify procyclicality at the worst possible times.
Download or read book Commodity based Sovereign Wealth Funds written by Abdullah Al-Hassan and published by International Monetary Fund. This book was released on 2018-02-09 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: Commodity-based sovereign wealth funds (SWFs) have been at a crossroads following the recent fall in commodity prices. This paper provides a framework for commodity-based SWF management, focusing on stabilization and savings funds, by (i) examining macrofiscal linkages for SWFs; (ii) presenting an integrated sovereign asset and liability management (SALM) approach to SWF management; and (iii) applying this framework to a scenario where assets are being accumulated and to a scenario where the SWF is drawn on to cover a financing gap due to lower commodity prices.
Download or read book Central Bank Reserve Management and International Financial Stability Some Post Crisis Reflections written by Bradley Jones and published by International Monetary Fund. This book was released on 2018-02-16 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: Motivated by the tension first revealed during the global financial crisis between the domestic and international financial stability obligations of central bank reserve managers, this paper offers some reflections along four main lines. First, the paper highlights how official reserve management has evolved to mirror important aspects of private institutional investor behavior over time, and addresses the policy relevance of this convergence. Second, evidence is documented of procyclical portfolio behavior by reserve managers during the crisis, which added to the stabilization burden shouldered by central banks in reserve currency-issuing countries. Third, in appraising the evolution of related vulnerabilities since the crisis, the paper finds grounds for both cautious optimism and lingering concern, the balance of which points to an uncertain future resolution. Fourth, some potential remedies are presented to help dampen the procyclical impulses of reserve managers in future periods of international financial turbulence.
Download or read book Asset Bubbles written by Bradley Jones and published by International Monetary Fund. This book was released on 2015-02-11 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: In distilling a vast literature spanning the rational— irrational divide, this paper offers reflections on why asset bubbles continue to threaten economic stability despite financial markets becoming more informationally-efficient, more complete, and more heavily influenced by sophisticated (i.e. presumably rational) institutional investors. Candidate explanations for bubble persistence—such as limits to learning, frictional limits to arbitrage, and behavioral errors—seem unsatisfactory as they are inconsistent with the aforementioned trends impacting global capital markets. In lieu of the short-term nature of the asset owner—manager relationship, and the momentum bias inherent in financial benchmarks, I argue that the business risk of asset managers acts as strong motivation for institutional herding and ‘rational bubble-riding.’ Two key policy implications follow. First, procyclicality could intensify as institutional assets under management continue to grow. Second, remedial policies should extend beyond the standard suite of macroprudential and monetary measures to include time-invariant policies targeted at the cause (not just symptom) of the problem. Prominent among these should be reforms addressing principal-agent contract design and the implementation of financial benchmarks.
Download or read book IMF Research Bulletin June 2016 written by International Monetary Fund. Research Dept. and published by International Monetary Fund. This book was released on 2016-06-17 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the June 2016 issue of IMF Research Bulletin, Eugenio Cerutti interviews Lars E.O. Svensson. Lars, a professor at the Stockholm School of Economics, was a Visiting Scholar at the IMF. In the interview, he discusses monetary policy, financial stability, and life at the IMF. The Bulletin also features a listing of recent Working Papers, Staff Discussion Notes, and key IMF publications. The table of contents from the latest issue of IMF Economic Review is also included.
Download or read book Ireland written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2016-09-29 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Technical Note discusses the findings and recommendations made in the Financial Sector Assessment Program for Ireland in the areas of asset management and financial stability. Most of the potential avenues for domestic financial instability from Irish-domiciled money market funds and investment funds appear to be contained. The potential for destabilizing spillovers from Irish-domiciled money market and investment funds to the domestic economy appears limited. The Central Bank of Ireland has made important progress in addressing long-standing data gaps as they pertain to the asset management industry. A number of initiatives could be helpful in further strengthening industry oversight.
Download or read book Procyclical Behavior of Institutional Investors During the Recent Financial Crisis written by Mr.Michael G Papaioannou and published by International Monetary Fund. This book was released on 2013-09-11 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper (i) provides evidence on the procyclical investment behavior of major institutional investors during the global financial crisis; (ii) identifies the main factors that could account for such behavior; (iii) discusses the implications of procyclical behavior; and (iv) proposes a framework for sound investment practices for long-term investors. Such procyclical investment behavior is understandable and may be considered rational from an individual institution’s perspective. However, our main conclusion is that behaving in a manner consistent with longterm investing would lead to better long-term, risk-adjusted returns and, importantly, could lessen the potential adverse effects of the procyclical investment behavior of institutional investors on global financial stability.
Download or read book Tracking America s Economy written by Norman Frumkin and published by Routledge. This book was released on 2015-03-26 with total page 426 pages. Available in PDF, EPUB and Kindle. Book excerpt: This completely revised and updated edition of Norman Frumkin's acclaimed work offers vital information for the urgent growing debate on the state of the nation's economy. Frumkin makes complex ideas and statistical data accessible to people without special training in economics. His goal in this book is to provide a better understanding of the performance of the American economy, and a basis for evaluating proposals intended to influence its future course. Using data current through the first half of 2003, Frumkin focuses on the meaning and use of a wide array of indicators of economic growth, employment, wages, productivity, investment, saving, and finance in assessing the current state of the U.S. economy and forecasting future developments. Equally useful for economists, students, investors, journalists, and anyone concerned with the economy, this totally revised edition includes detailed coverage of many important new topics, such as terrorism's impact on the economy, federal debt and interest rates, job openings and unemployment, government spending and taxes, the 2001 recession, and more.
Download or read book Unicist Business Strategy written by Peter Belohlavek and published by Blue Eagle Group. This book was released on 2011-07 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt: These books were written as consultation books to be used to solve problems. They are essentially analogous to medical books for individuals who decided to manage the concepts and fundamentals of things in order to manage the root causes of problems. The purpose of a business strategy is to influence the market and the environment to achieve business goals. The unicist approach defines that a strategic approach includes both a “maximal strategy” and a “minimum strategy” to adapt to the market and the environment.
Download or read book Understanding the Use of Long term Finance in Developing Economies written by Mr.Maria Soledad Martinez Peria and published by International Monetary Fund. This book was released on 2017-04-26 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This short paper reviews recent literature on the use of long-term finance in developing economies (relative to advanced ones) to identify where long-term financing occurs, and what role different financial intermediaries and markets play in extending this type of financing. Although banks are the most important providers of credit, they do not seem to offer long-term financing. Capital markets have grown since the 1990s and can provide financing at fairly long terms. But few firms use these markets. Only some institutional investors provide funding at long-term maturities. Governments might help to expand long-term financing, although with limited policy tools.
Download or read book The Federal Tax System written by United States. Congress. Joint Economic Committee and published by . This book was released on 1964 with total page 340 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Hearings Reports and Prints of the Joint Economic Committee written by United States. Congress. Joint Economic Committee and published by . This book was released on 1964 with total page 1592 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Federal Tax System Facts and Problems 1964 written by United States. Congress. Economic Joint Committee and published by . This book was released on 1964 with total page 358 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Systemic Contingent Claims Analysis written by Mr.Andreas A. Jobst and published by International Monetary Fund. This book was released on 2013-02-27 with total page 93 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent global financial crisis has forced a re-examination of risk transmission in the financial sector and how it affects financial stability. Current macroprudential policy and surveillance (MPS) efforts are aimed establishing a regulatory framework that helps mitigate the risk from systemic linkages with a view towards enhancing the resilience of the financial sector. This paper presents a forward-looking framework ("Systemic CCA") to measure systemic solvency risk based on market-implied expected losses of financial institutions with practical applications for the financial sector risk management and the system-wide capital assessment in top-down stress testing. The suggested approach uses advanced contingent claims analysis (CCA) to generate aggregate estimates of the joint default risk of multiple institutions as a conditional tail expectation using multivariate extreme value theory (EVT). In addition, the framework also helps quantify the individual contributions to systemic risk and contingent liabilities of the financial sector during times of stress.
Download or read book Investing in Resilience written by Asian Development Bank and published by Asian Development Bank. This book was released on 2013-01-01 with total page 368 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investing in Resilience: Ensuring a Disaster-Resistant Future focuses on the steps required to ensure that investment in disaster resilience happens and that it occurs as an integral, systematic part of development. At-risk communities in Asia and the Pacific can apply a wide range of policy, capacity, and investment instruments and mechanisms to ensure that disaster risk is properly assessed, disaster risk is reduced, and residual risk is well managed. Yet, real progress in strengthening resilience has been slow to date and natural hazards continue to cause significant loss of life, damage, and disruption in the region, undermining inclusive, sustainable development. Investing in Resilience offers an approach and ideas for reflection on how to achieve disaster resilience. It does not prescribe specific courses of action but rather establishes a vision of a resilient future. It stresses the interconnectedness and complementarity of possible actions to achieve disaster resilience across a wide range of development policies, plans, legislation, sectors, and themes. The vision shows how resilience can be accomplished through the coordinated action of governments and their development partners in the private sector, civil society, and the international community. The vision encourages “investors” to identify and prioritize bundles of actions that collectively can realize that vision of resilience, breaking away from the current tendency to pursue disparate and fragmented disaster risk management measures that frequently trip and fall at unforeseen hurdles. Investing in Resilience aims to move the disaster risk reduction debate beyond rhetoric and to help channel commitments into investment, incentives, funding, and practical action
