BANCI | ENGLISH

Time to review sovereign investment funds, say PwC economists

Autor: Bancherul.ro
2015-09-15 11:10

Since the financial crisis, sovereign investors (SI1) have become an increasingly important feature of the global economy. For example, the total global assets Sovereign Wealth Funds manage increased from around US$3 trillion at the end of 2008 to just over US$6 trillion in March 2015, said PwC in a statement.

Over this time, the global economy has changed with knock-on effects on SIs, say PwC economists:

- Moving on from the crisis: The economic downturn had a significant impact on some SIs which had to provide funding to their governments or prop up domestic financial sectors. For example, Ireland’s National Pensions Reserve Fund was initially set up to fund future pension payments, but during the crisis, a large chunk of its assets were used to bailout the banks. Now, the recovery is well underway in most peripheral economies. In Ireland, the sovereign fund has become the Ireland Strategic Investment Fund with the aim of supporting ‘economic activity and employment in the State.’

- US monetary policy and a strong dollar: The crisis saw a prolonged period of expansionary monetary policy in the US and other advanced economies. But this is about to change. Interest rate rises are expected to occur soon (although the developments in China may delay this even further) and the dollar has been strong for some time in anticipation of this.

- Oil prices - lower for longer: Over 50% of SWFs’ assets under management are financed by hydrocarbons. However oil and gas prices are expected to remain relatively low up to 2020. The IMF projected in July that oil prices would rise slowly to around $70/bbl. by 2020, but this was before recent falls and events in China led to a renewed sharp decline in oil prices.

PwC senior economist Richard Boxshall says: “In light of these changes, the current objectives of SIs may no longer be appropriate. We think now is the time for policymakers to review their sovereign investment funds and ask whether different objectives could be beneficial for their economy.”

Based on a review of the stated objectives of 74 SIs, PwC has established a framework of objectives, with the three main ones being capital maximisation, stabilisation and economic development. When reviewing SIs’ objectives, policymakers need to consider what their fund has been doing recently and what they want the fund to do over the next decade, which may involve a change in strategy.

PwC’s economists have identified three questions that policymakers need to answer linked to the changes to the global economy:

1. Moving on from the crisis, what structure does the domestic economy need to take so that there are several sustainable and diversified drivers of growth?

2. Will a tightening monetary policy cycle in the US mean that the US dollar remains strong for a prolonged period of time?

3. Will changes to demand and supply factors in the oil market keep prices low over the medium-term?

Says Richard Boxshall: “After policymakers have taken a view on all of these questions, they will be better positioned to begin assessing whether a change is needed to their SIs’ objectives. The chosen objectives should be at the heart of measuring the fund’s performance. Strong investment returns, while important, are not necessarily a sign of success. The fund has to meet its macroeconomic objectives to be deemed truly successful.”

Comentarii

Adauga un comentariu

Adauga un comentariu folosind contul de Facebook

Alte stiri din categoria: ENGLISH

Merger of Alpha Bank and UniCredit Bank Romania

Press Release: "Alpha Services and Holdings announces a strategic partnership with UniCredit in Romania Merger of Alpha Bank Romania and UniCredit Bank Romania and creation of third largest bank in Romania by total assets, with Alpha Bank retaining a detalii

National Bank of Romania (NBR) Board decisions on monetary policy

NBR Board decisions on monetary policy In its meeting of 4 April 2023, the Board of the National Bank of Romania decided: • to keep the monetary policy rate at 7.00 percent per annum; • to leave unchanged the lending (Lombard) facility rate at 8.00 percent per annum and the deposit facility rate at 6.00 percent per annum; • to keep the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions. The annual inflation rate went down to 15.52 percent in February 2023, from 16.37 percent in December 2022, relatively in line with forecasts. The decrease was mainly driven by the sizeable drop in the dynamics of fuel and detalii

ING posts 2022 net result of €3,674 million, dividend of €0.389 per share

ING press release: ING posts FY2022 net result of €3,674 million,
proposed final 2022 dividend of €0.389 per share

4Q2022 profit before tax of €1,711 million; CET1 ratio remains strong at 14.5%
•
Profit before tax up 29% on 4Q2021 and 24% on 3Q2022, mainly driven by higher income
•
Higher net interest income, as a further increase in liability margins helped offset TLTRO impact this quarter
•
Risk costs declined to 17 bps of average customer lending

Full-year 2022 net result of €3,674 million, supported by growing customer base and increase in lending and deposits
•
On a full-year basis, our primary customer base grew by 585,000 detalii

BT Financial Results as at 30 September 2022

BT Financial Results as at 30 September 2022 Banca Transilvania – sustained growth in customers and operations during the first nine months of the year "We continued our robust growth in the number of clients and transactions, with a dynamic well above the market average. We have been growing steadily and continued financing companies and individuals, despite the fact that the financial market is more fraught with uncertainty than ever and
the funding costs and capital requirements are additional factors driving the uncertainty in the economy. We remain committed to our objective - to be the main supporter of the economy and of the state for the development of Romania", states Mr. Ӧmer Tetik, Chief Executive detalii

Vezi toate stirile

26.04.2024

1 EUR = lei
1 USD = lei

Sursa BNR

Profil de Bancher

Michael Massourakis, economistul-şef al grupului Alpha Bank
Alpha Bank

... vezi profil

Toate Profilele

Profil de Banca

EximBank

vezi detalii

Toate Bancile

Filmul Parking, un cliseu plictisitor

Toate stirile

ING Bank

Toate stirile

Ultimele Comentarii

Refuz de plată la o benzinărie suma de 103 euro
Mi s-au retras de două ori suma de 48 euro și suma de 103 euro suma corectă este de 48 de euro ... detalii
nevoia de banci
De ce credeti ca acum nu mai avem nevoie de banci si firme de asigurari? Pentru ca acum avem ... detalii
Mda
ACUM nu e nevoie de asa ceva .. acum vreo 20 de ani era nevoie ... ACUM de fapt nu mai e asa multa ... detalii
oprire pe salariu garanti bank
mi sa virat 2500de lei din care a fost oprit 850 de lei urmand sa mi se deblocheze restul sumei ... detalii
Amânare rate
Buna ziua, Am rămas în urma cu ratele , va rog frumos sa ma ajutați cumva , soțul a pierdut ... detalii

Nume	*
E-mail	*
E-mail prieten	*
Mesaj
Cod validare	*
	Tastati codul din imagine (doar cifre)
	195.154.184.126