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  • BIS: Hard Or Soft Landing?

    Date 14/07/2022

    Key takeaways

    • Inflation is now at its highest level in several decades and threatens to become entrenched. Whether inflation is demand- or supply-driven, central banks have little choice but to tighten policy to lower aggregate demand and bring inflation back to target.
    • Evidence from past tightening cycles suggests that strong growth and high job vacancies, as well as front-loaded rate hikes, can help prevent a hard landing. But rapidly increasing inflation, low term spreads and elevated debt levels raise the risk of a recession, particularly in the face of persistent negative supply shocks.
    • Central banks need to steer a narrow course between tightening too much or too quickly, which could precipitate a hard landing, and tightening too little or too late, which could lead to inflationary pressures becoming ingrained, necessitating more costly measures down the road.

  • Monetary Policy In A World Of Conflicting Data, Federal Reserve Governor Christopher J. Waller, At Rocky Mountain Economic Summit Global Interdependence Center, Victor, Idaho

    Date 14/07/2022

    Thank you, Mike, and thank you to the Global Interdependence Center for the invitation to speak to you today. Let me start at the place that all remarks about U.S. monetary policy should start, which is with the Federal Reserve's dual mandate of maximum employment and price stability.

  • BIS: Mis-Allocation Within Firms: Internal Finance And International Trade

    Date 14/07/2022

    Summary

    Focus

    Are conglomerate firms highly productive? Or do they suffer from internal quarrels and squander investment opportunities? An established observation in the trade literature is that conglomerate firms are more productive than single-product firms. By contrast, the finance literature has established that multi-segment firms trade at a discount to single-product firms, with a lower valuation ("Tobin's Q"), because funds are misallocated across their divisions through the internal capital market.

  • Capital And (For A Change) Liquidity Buffers − Speech By Victoria Saporta, Bank Of England Executive Director, Prudential Policy, Given At The Bank Of England

    Date 14/07/2022

    The UK Prudential Regulation Authority (PRA) requires UK banks to hold ‘buffers’. These are extra funds that banks can use in times of stress.

  • EEX - Exchange Council Discussed Emergency Measures Of The Exchange And Further Impacts Of Ukraine War

    Date 14/07/2022

    On 6 July 2022, the Exchange Council of the European Energy Exchange (EEX) held its second meeting of the year, chaired by Dr. Bernhard Walter, Head of Market Design and Regulatory Affairs at EnBW AG. The main topics of the discussions were the current market conditions due to the Ukraine war, the precautions taken by the exchange and clearing house and upcoming amended regulation.