Obama pledges to confront climate change | Middle class must benefit from economic growth, Obama says | ECB's Weidmann sees politicization of forex rates
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22 January 2013
CFA Institute: Financial NewsBrief
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BoJ raises inflation target, commits to unlimited asset buying
Giving in to intense pressure from newly elected Prime Minister Shinzo Abe, the Bank of Japan has doubled its inflation target to 2% and obligated itself to an asset-buying program with no upper limit. Reuters (22 Jan.), NHK World (Japan) (22 Jan.)
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Obama pledges to confront climate change
President Barack Obama surprised many in Washington, D.C., when he used a portion of his inaugural address to commit to dealing with climate change. "We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations," he said. Climate change was rarely mentioned in the U.S. presidential campaign. Reuters (21 Jan.), The New York Times (tiered subscription model) (21 Jan.), Houston Chronicle (tiered subscription model)/Texas on the Potomac blog (21 Jan.), The Globe and Mail (Toronto) (tiered subscription model) (22 Jan.)
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Middle class must benefit from economic growth, Obama says
President Barack Obama said in his inaugural address that the government must do more to make sure that when the economy expands, the middle class isn't left behind. Unlike his first inaugural speech, in which Obama focused on dealing with the aftermath of the financial crisis, this time the president said the U.S. must deal with long-term economic problems. The Washington Post (tiered subscription model) (21 Jan.)
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ECB's Weidmann sees politicization of forex rates
Aggressive monetary policies in Japan and Hungary are politicizing foreign exchange rates and undermining the independence of central banks, European Central Bank Governing Council member Jens Weidmann says. "Already now worrisome infringements can be observed, for instance in Hungary or Japan, where the new government is interfering massively in central bank affairs and is pushing for a [more] aggressive monetary policy and threatens the end of central bank autonomy," he said. Market News International (21 Jan.), The Telegraph (London) (tiered subscription model) (21 Jan.), Reuters (21 Jan.)
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Euronext faces uncertain future with ICE
When IntercontinentalExchange's proposed purchase of NYSE Euronext is finalized, Euronext might find itself out in the cold. ICE CEO Jeff Sprecher is commonly thought to be much more interested in commodities and futures than in equities, leaving many to speculate that Euronext could be spun off. Financial News Online (U.K.) (subscription required) (21 Jan.)
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Deutsche Bank exec discusses controversial risk measures
In this interview, Greg Wood, director of algorithmic execution for listed derivatives and foreign exchange at Deutsche Bank, discusses kill switches and other risk-management measures. "The idea behind risk-management checks that act as 'speed bumps' is to identify whether a client may be overtrading. ... We believe that there should be risk-management checks in every part of the electronic order flow that is practical," Wood said. Wall Street & Technology (18 Jan.)
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Morningstar Direct: Asset Allocation for a Non-Normal World
Forget "black swans"; it's more like a flock of black turkeys. Extreme events happen with regularity across asset class. Traditional MVO cannot take that into account. Download our webinar on new approaches with Dr. Paul Kaplan, CFA.
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CFA Institute in the News
Germany's repatriation of gold reserves is a sign of: 
VoteDeclining trust among nations
VoteGerman preparation for systemic events with the fiat-currency system
VoteGrowing German independence within the eurozone
VoteThe German government bowing to public pressure to repatriate its gold
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Asian-Pacific markets mixed after BoJ boosts inflation target
Asian-Pacific markets were mixed Tuesday after the Bank of Japan doubled its inflation target to 2% and adopted an unlimited asset-buying program. Japan's Nikkei 225 closed down 0.4%. Hong Kong's Hang Seng Index rose 0.3%. China's Shanghai Composite fell 0.6%. South Korea's Kospi rose 0.5%. Australia's S&P/ASX 200 was unchanged. India's Sensex was down 0.6% at midafternoon. The Economic Times (India) (26 Feb.), The Wall Street Journal (tiered subscription model) (22 Jan.)
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Economics
German recovery is already here, central bank says
The Bundesbank said it sees the beginning of growth this quarter in Germany. "The largely stable labor market and a better outlook for output suggest that the economic weakness won?t last all that long," according to the central bank. The positive outlook comes despite likely negative gross domestic product growth in the fourth quarter and a projection that calls for 0.4% GDP growth over all of 2013. Bloomberg (21 Jan.), The Washington Post (tiered subscription model)/The Associated Press (21 Jan.)
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Algerian attack could hasten Statoil's shift to U.S. shale
Norway's biggest energy exploration firm, Statoil, likely will accelerate development of shale oil in the U.S. and exploration of Brazilian offshore oil fields after terrorists attacked its Amenas gas facility in Algeria, industry analysts said. However, Statoil probably won't pull out of Algeria because of the attack, they said. The company was already moving to reduce its presence in high-risk areas before the attack. Bloomberg (21 Jan.), Platts (21 Jan.)
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Security issues emerge as China invests in aerospace
China is investing heavily to expand its aerospace industry and is acquiring access to dual-use technology that has civilian and military applications. U.S. officials are concerned about the trend and are trying to decide how to respond, says Michael Wessel of the U.S.-China Economic and Security Review Commission. The New York Times (tiered subscription model)/DealBook blog (21 Jan.)
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U.N. agency expects record-high unemployment worldwide
Global unemployment will exceed 200 million this year, a record high, despite economic improvement, according to the International Labor Organization. The U.N. agency says it expects joblessness to increase by 5.1 million people. Reuters (21 Jan.)
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Online platforms challenge financial advisers
Financial advisers are facing a growing challenge in attracting and keeping clients from Internet firms that offer investments, financial planning and advice. Since the financial crisis, many wealthy investors have shifted assets from fee-based advisers to inexpensive, self-directed accounts, according to Cerulli Associates. InvestmentNews (free registration) (20 Jan.)
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Geopolitical/Regulatory
EU plans to authorize financial-transaction tax
EU finance ministers are expected to allow 11 eurozone nations, including Germany, France and Italy, to proceed with a tax on financial transactions. Ministers are "expecting to take a decision to move forward, on an enhanced cooperation basis, the financial-transaction tax," Irish Finance Minister Michael Noonan said. Reuters (21 Jan.), Bloomberg (22 Jan.)
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Labor board backs workers who talk shop on social media
The National Labor Relations Board, in a series of rulings and public statements, has defended the right of employees to discuss work on social media, such as Facebook and Twitter. The U.S. agency says employer policy restricting social media use is illegal if it bars workers from communicating with one another for the purpose of getting better wages, benefits or working conditions. The New York Times (tiered subscription model) (21 Jan.)
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BoE official calls for simpler alternative to Basel III
Andrew Haldane, executive director of financial stability at the Bank of England, has again spoken out about complex challenges in Basel III. "Regulators cannot really police this complex beast," he said. "There are moves afoot with the Basel Committee [on Banking Supervision] to seek ways to simplify and streamline the move to a proper regulatory, rather than self-regulatory, edifice." Haldane says the U.K. Financial Services Authority is ahead of the Basel Committee in developing a simpler model. Reuters (21 Jan.)
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France proposes leader for ECB bank supervisor
France has nominated a candidate to head the European Central Bank's bank supervisor, which will oversee at least 150 eurozone institutions beginning in March 2014. Finance Minister Pierre Moscovici declined to identify the person, who is speculated to be Bank of France official Daniele Nouy. "We have a candidate for this post," Moscovici said. "It's not a mystery, and I hope that she will convince." Reuters (21 Jan.)
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Financial Products
First Trust aims to debut 2 stock ETFs
First Trust filed with the Securities and Exchange Commission to launch two equity exchange-traded funds that focus on paying out income. The First Trust Enhanced High Income ETF and the First Trust Enhanced Low Beta Income ETF would seek to generate extra income by selling out-of-the-money call options on the Standard & Poor's 500 index. Benzinga.com (18 Jan.)
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