Russia’s two largest banks plan SWIFT alternative
http://rt.com/business/195472-russia-sberbank-vtb-swift/
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http://rt.com/business/195472-russia-sberbank-vtb-swift/
Continue ReadingFirst is a mismatch in liquidity offered by investment funds with redemption terms that may be inconsistent with the liquidity of underlying assets. Many credit funds hold illiquid credit instruments that trade infrequently in thin secondary markets.
Second is the large amount of assets concentrated in the hands of a few managers. This concentration can result in “brand risk,” given that end-investor allocation decisions are increasingly driven by the perceived brand quality of the asset management firm. Sharp drawdowns in one fund of an asset manager could propagate redemptions across funds for that particular asset manager if its brand reputation is damaged, for example through illiquidity or large losses.
Third is the concentration of decision making across funds of an individual fund manager, which can reduce diversification benefits, increase brand risk, or both.
Fourth is the concentrated holdings of individual issuers, which can exacerbate price adjustments.
Fifth is the rise in retail participation, which can increase the tendency to follow the herd.
Policymakers and markets need to prepare for structural higher market volatility. Doing so requires strengthening the system’s ability to absorb sudden portfolio adjustments, as well as addressing structural liquidity weaknesses and vulnerabilities.
Advanced economies with financial markets at risk for runs and fire sales may need to put in place mechanisms to unwind funds should they come under substantial pressure that threatens wider financial stability.
Submitted by Charles Hugh-Smith of OfTwoMinds blog,Whether this trend will hold or reverse is unknown, but it does suggest that there are advantages to being the cleanest shirt in the dirty laundry.Dave at Trade with Dave recently posed …
Continue Readingfirst, the SNB should hold at least 20% of its assets in gold;second, it should no longer be allowed to sell any gold at any time; andthird, all of its gold reserves should be stored in Switzerland.
Even Bob Pisani knows by now that the European Close seems to create a trend-reversal moment intraday that few machines (and even fewer humans) are willing to fight. Whether this is remnants of short-term cycles found due to POMO or just a drop in…
Continue ReadingVia Gavekal Capital’s blog,The 100-day moving average of the advance/decline ratio for the MSCI World Index has collapsed to its lowest level since November 2008.Out of the 46 MSCI country indices, we count 20 countries where the 100-day moving av…
Continue ReadingAmid wild fluctuations in stocks and range-bound trading in bonds this week, the U.S. dollar marched ever higher. The currency is set to finish another week stronger, which would mark 12-straight weeks of gains, the longest winning streak ever.&nb…
Continue ReadingVia Nanex,It is very common to find examples of stock quotes changing rapidly – hundreds and sometimes thousands of times per second in a single stock. At the extreme, we’ve seen in excess of 25,000 quote changes in a single stock in one second of…
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