Key Issues

IIF Estimates Portfolio Inflows to Emerging Markets Surge to Two Year High in July


July 28, 2014 — The Institute of International Finance today released new estimates for portfolio flows to emerging markets for July 2014 that saw inflows accelerate further in July, reaching a new two year high. According to the IIF’s Portfolio Flows Tracker, emerging markets received $44 billion in portfolio inflows from global investors in July, compared to $37 billion in June and $43 billion in May. This compares to average monthly inflows of $24 billion from 2010-2013.

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Russia: Sanctions Begin to BiteMember only content

The sanctions imposed by the U.S. on July 16 represent a further escalation and for the first time target major Russian entities. Even though their immediate impact on the sanctioned entities should be manageable, the broader impact on the Russian economy is likely to be much stronger and longer lasting. The mere threat of sanctions has already caused foreign capital inflows to reverse, for the first time since the 2008 global financial crisis. With sanctions likely to escalate and broaden further, capital outflows look set to accelerate, pushing Russia into recession and intensifying the already significant financial pressures in domestic banks and corporations.

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New York State Department of Financial Services proposes Codes, Rules and Regulations on virtual currencies

July 24, 2014 — On July 17, 2014 the New York State Department of Financial Services issued proposals that require firms to obtain a license to operate any Virtual Currency Business Activity. The proposals also outline a formal application process for both firms and those accountable (Directors, Principal Officers, Principal Stockholders and Principal Beneficiaries) within such firms. A detailed application process and application fees are also set out in the consultation as is prospective actions of the superintendent (approval, denial, suspension and revocation of the license, for example). In addition to requiring both internal compliance policies (including anti-fraud, anti-money laundering, cyber security, privacy and information security) and an individual acting in the capacity of a Compliance Officer, the proposed rules address a variety of regulatory themes:

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July-August 2014 Capital Markets Monitor and Teleconference

Monetary Policy Uncertainty and Low Volatility

A striking feature of the current global economic recovery, particularly since mid-2012, has been the substantial increase in asset valuation—to record highs—amid a fall in volatility, to the lowest levels since 1993.

Against a backdrop of subdued economic and earnings growth, this buoyant financial market performance can be attributed to near-zero interest rates and plentiful central bank liquidity. In addition, as noted in the June 17-18 FOMC meeting, market participants “may not factor in sufficient uncertainty about the path of the economy and monetary policy.” In other words, risk aversion has fallen to remarkably low levels, helping drive a pronounced compression of credit spreads and a marked rise in equity market valuations.

Going forward, with uncertainty likely to increase on both fronts, a correction from current ultra-low levels of volatility could continue, accompanied by a correction in asset valuation—particularly in the corporate sector, where leverage has increased substantially.

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IIF on Global Economy: No Time to Relax

July 10, 2014 — The Institute of International Finance today revised down its forecast for global economic growth to 2.6 percent for 2014, but predicts a pick-up in economic activity in the second half of the year, rising to 3.3 percent in 2015.

“Global growth for the first half of 2014 has clearly disappointed, with growth outcomes uneven and many EMs stuck in the doldrums,” said Charles Collyns, chief economist for the IIF. “It’s perhaps surprising that financial markets are buoyant and risk appetite is strong, but we believe that reflects reassurances of policy support in the core countries rather than rising confidence in the fundamental drivers of growth. Looking forward, we expect to see acceleration in growth for the second half of 2014, but we remain concerned that the global economy could continue to underperform.”

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IIF Identifies Top 10 Impediments to Long-Term Infrastructure Financing and Investment

July 1, 2014 — The Institute of International Finance today released a top 10 list of impediments to long-term infrastructure financing and investment, accompanied by potential solutions. The list was developed by the IIF’s Council for Asset and Investment Management, representing investors with nearly $20 trillion in assets under management.

“The G20 has made the promotion of infrastructure investment one of its top priorities for 2014, and institutional investors have been strong supporters of this effort,” said Hung Tran, executive managing director at the IIF. “Identifying these impediments and providing practical suggestions for solutions will aid policymakers in developing policy frameworks that promote infrastructure investment.”

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July 2014 Global Regulatory UpdateMember only content

July 9, 2014 — This month’s IIF Global Regulatory Update provides updates on current work streams in regulatory capital, recovery and resolution, data requirements, accounting, disclosure, insurance, and non-bank non-insurance financial institutions as well as upcoming events.

Events

Teleconference: Brazil's Policy Challenges and OutlookMember only content

July 31, 2014

Mr. Ramón Aracena, Chief Economist for Latin America, will share his views on the policy challenges and economic outlook following a trip to Brazil last week. The call will take place at 8:00 AM EDT.

2014 Annual Meeting of Latin America Chief Executives

September 9-10, 2014

Mexico City

Hosted by Banorte, this year’s program will focus on the global and regional economic outlook, challenges from post-crisis regulation, and financial inclusion.

2014 IIF Executive Program on Risk Management - Risk Strategy Beyond Basel III

September 9-11, 2014

New York

Offered in cooperation with Credit Suisse, this three-day program succinctly brings together the concerns that risk officers face with growing regulatory demands that are forcing change in the financial industry landscape and current business models in the market. Interactive roundtable discussions with session speakers and the moderator will underpin the program allowing the audience-driven discussions to uncover further insights, especially from fellow participants.

IIF MENA Regional Economic Forum

September 29-30, 2014

Manama, Bahrain

Hosted by Gulf International Bank, the Forum will address the challenges of economic diversification and meaningful job creation in the oil-producing economies, prospects for political stability and sustainable economic growth in the transition (“Arab Spring”) countries, global energy markets and the future role of the MENA oil producers in global energy supplies, and prospects for Arab economic cooperation and private sector intra-regional capital flows in the wake of the “Arab Spring.”

2014 IIF Annual Membership Meeting

October 10-11, 2014

Washington, D.C.

The 2014 IIF Annual Membership Meeting will be held from Friday, October 10 through Saturday, October 11 at Ronald Reagan Building and International Trade Center in Washington, D.C.



Other Events