Financial Times (December 10)
“Global public debt is set to exceed $100tn by the end of this year” according to IMF estimates, “with total government borrowing set to approach 100 per cent of global GDP by the end of the decade.” This development led the outgoing chief economist of the Bank for International Settlements to warn that “rising government debt levels will cause turbulence in the global economy and financial markets unless political leaders start tackling them soon.”
Tags: $100tn, BIS, Borrowing, Chief economist, Debt levels, Economy, Financial markets, GDP, Global, Government, IMF, Political leaders, Public debt, Turbulence
OilPrice.com (May 24)
De-Dollarization has begun. In China, the majority of cross-border payments had always been in dollars. “In March 2023, the share of the RMB in China’s settlements surpassed the USD for the first time.” In other transactions, the currency’s progress may be masked. For example, “the Bank for International Settlements reveals that, in 2022, the USD remained the most-used currency for FX settlements. The euro and the Japanese yen came in second and third, respectively.” However, “the Chinese renminbi, though accounting for a relatively small share of FX transactions, gained the most ground over the last decade. Meanwhile, the euro and the yen saw decreases in use.”
Tags: BIS, China, Cross-border payments, De-Dollarization, euro, FX, Japan, Renminbi, RMB, Settlements, Transactions, USD, Yen
Bloomberg (September 21)
“The value of the yen has slumped to the lowest on record, as measured against a broad basket of its peers and adjusted for inflation,” the Bank for International Settlements found based on data from 1970 onward. This serves to “underscore the pressure on the Bank of Japan to normalize its ultra-easy monetary regime, which continues to weigh down the nation’s interest rates and weaken the currency. The drop in the so-called real effective exchange rate means Japanese have to pay more for imported goods and services at a time when wage growth is failing to compensate for inflation.”
Tags: BIS, BOJ, Currency, Imports, Inflation adjusted, Interest rates, Japan, Normalize, Pressure, Real effective exchange rate, Record, Slumped, Ultra-easy, Wage growth, Yen
Markets Insider (June 27)
“The banking crisis that unfolded earlier this year isn’t over, and banks could be hit with losses akin to what was seen in 2008 if the Federal Reserve doesn’t get inflation under control.” In its annual report, the Bank for International Settlements called attention to the “lasting ramifications of 2023’s bank failures, starting with the collapse of Silicon Valley Bank in early March.”
Tags: 2008, 2023, Annual report, Banking crisis, BIS, Collapse, Failures, Fed, Inflation, Losses, Ramifications, SVB, Unfolded
Bloomberg (February 23)
“For Chinese leaders, the need to prop up faltering GDP growth outweighs fears about a rapid buildup in debt.” New loans from banks were 70% higher in January than a year prior. “Debt now tops 230 percent of GDP and could reach as high as 300 percent of GDP if current trends continue…. Even the Bank for International Settlements, a body not known for hyperbole, has warned that Chinese debt is reaching levels that typically trigger financial crises.”
Real Estate Investment Today (April Issue)
“REITs contribute to more resilient real estate markets and a more resilient financial system.” Sub-prime mortgages contributed to the residential property collapse, but REITs helped stabilize the commercial market. A recent study by researchers from the University of Wisconsin and the Bank for International Settlements found that REITs provide markets with much needed transparency and liquidity. It’s “clear that REITs provide real benefits for the broader commercial real estate industry, for investors and for our nation’s economy.”
Tags: BIS, Commercial, Economy, Financial system, Industry, Investors, Liquidity, Markets, Real estate, REITs, Residential property, Resilience, Sub-prime, Transparency, University of Wisconsin
