Chinese wealth management products

Chinese wealth management Products (WMPs) are a form of asset backed shadow banking deposit, paying above the rates of regulated banks. The WMPs have...

China’s augmented fiscal challenge

A very short note by the IMF in the run-up of China’s latest Article IV consultations suggests that the country’s fiscal position is much...

Official flows and consequences for FX markets

A new IMF paper shows empirically that official currency interventions affect external imbalances and, by implication, exchange rate misalignments. There is a short-term flow...

How current accounts mislead FX markets

A common fallacy is that current account deficits measure dependence on external financing. In reality, external balances and cross border financing are only vaguely...

The China credit risk

The rapid rise of China’s internal debt stock is a global concern. Oxford Economics research shows that non-financial sector debt has soared to 250%...

A brief review of China’s vulnerabilities

The IMF’s latest staff report on China serves as a reminder of key vulnerabilities. With repressed real interest rates corporate leverage remains high and...

Nomura research on rising China crisis risk

According to Nomura's Zhiwei Zhang and Wendy Chen, "China is displaying the same three symptoms that Japan, the US and parts of Europe all...

China’s internal debt overload: a refresher

According to the latest IMF China report credit to non-financial institutions has soared to over 230% of GDP, an increase of 60%-points and a...

The rising global savings glut

A DB paper suggests that the rising median age of the world's population will increase savings ratios. The trend is reinforced by macro policies aimed at generating external...

How easy G3 monetary policy spills over into East Asia

A recent BIS paper illustrates the consequences of highly accommodative monetary policy in the G3 for East Asia. These include lower policy rates than...

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Rebalancing and market price distortions

Price distortions are an important source of short-term trading profits, particularly in turbulent markets. Here price distortions mean apparent price-value gaps that arise from...

Equity return anomalies and their causes

The vast range of academically researched equity return anomalies can be condensed into five categories: return momentum, outperformance of high valuation, ...

Basic factor investment for bonds

Popular factors for government bond investment are “carry”, “momentum”, “value” and “defensive”. “Carry” depends on the steepness of the yield curve, which to some...

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