Category Archives: News

Young retail investors do not care about ESG; not really

One of the most widely accepted “truths” about ESG (environmental, social and governance) investing is that young investors are very keen to put their money into companies that show strong ESG credentials.

Entire marketing strategies have been built around this idea. But what if, in fact, this “truth” turns out to be no more than myth?

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The bad type of inflation is here

Despite good news about vaccine roll-outs, it is too early to tell when or even whether economies will fully reopen and life will go back to “normal.”

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Businesses are complicit in Donald Trump’s siege on democracy

In a recent Financial Times article, various business executives expressed deep regret for their “Faustian bargain” with US President Donald Trump.

They should go ahead and express even deeper regret for their contribution to the serious undermining of democracy — not just in the US, but everywhere else.

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The UK should stop subsidising house prices post-Brexit

Forget Covid-19 and Brexit. The question to which most people in the UK would want an uncertain answer is what will happen to house prices in 2021.

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Look at Covid-19 vaccines to gauge inflation tantrum odds

With news of another Covid-19 vaccine on its way and optimism rising ahead of the end-year holidays, it looks like 2021 will shape up to be much better than 2020.

But one forgotten danger could spoil the party: inflation. Price rises are far from investors’ minds, but an ‘inflation tantrum’ could have devastating effects on various countries’ economies if they are not kept in check.

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Pay emerging markets to help stop climate change

Among developed countries investors, there are various interpretations of the strength of the commitment to environmental, social and governance (ESG) factors in emerging markets, ranging from the cynical to the idealistic.

The cynical view would be that there can be no “real” ESG in emerging markets because too often they are plagued by corruption, therefore investors cannot trust what companies in these countries report.

The idealistic view, on the other hand, would see every little step towards introducing ESG as a wonderful sign that these countries are finally deciding to adopt the same values as Western democracies.

While both extremes are wrong, sadly even the moderate take misses the main difference between emerging markets and developed ones: the effect of development itself on ESG — and in particular on the “E”.

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Fast and furious rally risks triggering the Sell signal

The markets rallied so fast in November that bullish investors risk pushing the needle towards the “Sell” signal, according to Bank of America’s indicator.

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Debate starts on widening the mandates of central banks

The European Central Bank (ECB) seems to be wading deeper into political territory, opening an interesting debate on what exactly is the role of central banks.

The ECB recently published a guide to the banks under its supervision, explaining how it expects them to consider risks related to climate change and the environment in their business strategies and their risk management.

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Stricter liquidity and leverage controls may be coming

If you are wondering what’s behind the sudden largesse of the European Central Bank (ECB) when it comes to purchases of bonds, you may find a recent speech by an ECB official at a conference about financial stability enlightening.

While regulators focused on making banks safer following the 2007-2009 financial crisis, the non-bank financial sector has been allowed to continue without the same stringent requirements for liquidity and leverage. This gap came into sharp focus during the crisis caused by the Covid-19 pandemic.

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