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  • BIS: The Outlook For Business Bankruptcies

    Date 12/10/2020

    Key takeaways

    • Economic growth and forward-looking indicators of default risk inferred from equity markets, two variables that together predict business bankruptcies in advanced economies, show bankruptcies rising significantly by the end of 2021.
    • Projections of real GDP growth embedded in the consensus forecast account for the bulk of this projected increase. Unlike in previous downturns, the stock market-based default indicators contribute very little.
    • As these findings underscore, the pandemic and unprecedented government support for the business sector have driven a sizeable wedge between financial market perceptions of default risk and projections for economic activity.

  • ETFGI Reports Year-To-Date Net Inflows Into ETFs And ETPs Listed Globally At The End Of Q3 Are At A Record Level Of US$ 488.18

    Date 12/10/2020

    ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs and ETPs ecosystem, reported today that ETFs and ETPs listed globally gathered net inflows of US$59.74 billion during September, bringing year-to-date net inflows to record level of US$488.18 billion which is significantly higher than the US$349 billion gathered at this point last year. Assets invested in the global ETFs/ETPs industry decreased by 1.8%, from US$7.01 trillion at the end of August 2020, to US$6.89 trillion at the end of September, according to ETFGI's September 2020 Global ETFs and ETPs industry landscape insights report, the monthly report which is part of an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)

  • BIS: Bankruptcies, Unemployment And Reallocation From Covid-19

    Date 12/10/2020

    Key takeaways

    • The expected wave of business failures in the Covid-19 recession has yet to materialise, due in part to policy support, but also reflecting the inherent lag between declines in GDP and insolvencies.
    • Bankruptcies weigh heavily on labour markets. Unemployment typically increases three times more if a fall in GDP is accompanied by a similar-sized increase in bankruptcies.
    • Concentration of bankruptcies in those sectors hit especially hard by Covid-19 could exert a significant drag on the labour market.
    • The natural renewal process where young, dynamic firms displace those who exited takes two to three years, leaving a protracted period of lacklustre activity. This underscores the need to reallocate resources quickly and efficiently to drive growth in the post-pandemic world.

  • EBA Supports Harmonisation Of Creditworthiness Assessment For Consumer Credit Across The EU

    Date 12/10/2020

    • The EBA has responded to a Commission consultation on its proposed consumer agenda to express support for a harmonisation of creditworthiness assessments for consumer lending across the EU.
    • The harmonised approach to creditworthiness assessment for all consumer credit should cover data and methodologies that build on the EBA Guidelines on loan origination and monitoring.

  • BIS: Stress-Testing Banks During The Covid-19 Pandemic

    Date 12/10/2020

    Highlights

    • In response to the Covid-19 pandemic, a number of authorities that regularly conduct stress tests on individual banks adjusted their approach. They performed ad hoc exercises to assess the vulnerability of banking sectors as a whole. These exercises are different from regular ones in terms of key features such as objectives, design and methodologies, and communication.