Will the dominance of the dollar give way to a multipolar system of currencies?

In the wake of an invasion that drew international condemnation, Russian officials panicked that their dollar-denominated assets within America’s reach were at risk of abrupt confiscation, sending them scrambling for alternatives. The invasion in question did not take place in 2022, or even 2014, but in 1956, when Soviet tanks rolled into Hungary. 

This event is often regarded as one of the factors that helped kick-start the eurodollar market—a network of dollar-denominated deposits held outside America and usually beyond the direct reach of its banking regulators.

The irony is that the desire to keep dollars outside America only reinforced the greenback’s muscle.

In the wake of the Russian invasion of the Ukraine the new outbreak of financial conflict through sanctions has raised the question of whether the dollar’s dominance has been tarnished, and whether a multipolar currency system will rise instead, with the Chinese yuan playing a bigger role.

Read the full article on The Economist HERE. 

3 Major Questions Around Evergrande's Debt And China's Economy That Remain Unanswered

In the past month, Chinese property developer Evergrande has dominated financial headlines for being over $300 billion in debt. Many media reports have made parallels to Lehman Brothers role in the 2008 financial crisis. In this episode of Money Always Talks, we take a look at how things at Evergrande got this bad and what greater questions the saga raises about China's economic growth. 

 

Regulators Probe Market Amid Rising Meme Stocks

Market swings and the surging prices of meme stocks have caught the attention of the U.S. Securities and Exchange Commission (SEC), Bloomberg reported on Monday (April 7). The SEC is doing a deep dive into the markets for evidence of manipulation and other improper behavior in light of escalating meme stocks like AMC and GameStop.

How the GameStop short-sellers play - Charts that Count

The FT's US finance editor Robert Armstrong looks at a company whose shares soared more than 400 per cent just two weeks ago as amateur stock traders took on Wall Street to make money from its fortunes.

 You can get more information on this story from the FT article;

"GameStop curbs put clearing houses under the spotlight"

London won't dominate forever: These are the top five international finance centres of the future

From City A.M. –

“London won't dominate forever: These are the top five international finance centres of the future

Every market's success depends on financial stability, infrastructure development, taxation and economic strength. At the moment, western cities such as New York and London dominate as international financial centres, but increasingly hotspots are emerging in the developing world and catching the attention of investors.

While these markets can currently prove challenging in many ways, as they are immature and often gripped by political tensions, they offer great opportunities as long as well-researched decisions are made and realistic strategies are in place.

In many emerging markets, we are seeing the young, dynamic populations entering the workforce. These talented, ambitious workers are driving innovation. Where there is innovation and determination there is opportunity for success.

I expect that we will witness the continued growth of the following five locations over the coming years, as they undergo infrastructural and technological developments and become increasingly attractive to international financial corporations that are looking for new opportunities.”

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MiFID II - How it will affect you

By Stanley Epstein

The original Markets in Financial Instruments Directive (MiFID) came into force in November 2007. MiFID brought competition to the trading procedures in the European Union. Under MiFID investment firms could operate throughout the EU on the basis of the ‘authority’ of their home EU Member State. MiFID also introduces a range of investor protection measures. In short MiFID became the cornerstone of the EU’s regulation of financial markets.

During 2011 the European Commission agreed to a proposal for the revision of MiFID. The revisions are intended to take account new developments in the trading situation since 2007 including new technological developments as well as a response to the 2008 financial crisis. The revised Directive and a new Regulation, are together commonly referred to as ‘MiFID II’.

The European Parliament approved MiFID II in April 2014. The new measures will take effect from January 2017.

The changes that MiFID II will bring are substantial and are divided into eight categories. These are listed and summarized below.

1. Commodity Derivatives – while some elements of the existing directive have been adopted a new system of position limits and position reporting is to be introduced. The existing exemptions for commercial firms who trade commodity derivatives is being narrowed.
2. Transparency – the current pre- and post-trade transparency system only applies to shares traded on regulated markets. This will change and will be applied to non-equities as well (depositary receipts, ETFs, certificates and other similar financial instruments traded on a RM (regulated market) or MTF (multilateral trading facility)).
3. High frequency trading – specific provisions are being introduced that have been designed to ensure that high frequency trading (HFT) does not have a contrary effect on market quality or integrity.
4. Market structure - revisions to market structure have been designed to create comprehensive regulation of secondary trading that is fair, efficient and safe. Firms currently operating either multilateral trading systems (MTFs) or bilateral trading systems will need to consider how they fit into the new trading landscape.
5. Organisational requirements – there will be expanded requirements in respect of the management of firms, unambiguous organisational and conduct requirements relating to product governance arrangements and a prohibition on title transfer collateral agreements involving retail clients. All investment firms are going to be affected by the provisions relating to management bodies and will need to consider how their existing governance arrangements match up to the new requirements. Product governance and remuneration requirements will affect most investment firms.
6. Trade reporting – new requirements have been designed to resolve problems with the quality and availability of data that have been observed since the original directive was introduced. This will affect firms who currently offer consolidated data services.
7. Conduct of business rules - The revised legislation seeks to boost the levels of protection granted to different categories of clients will be enhanced by the new regulations.
8. Transaction reporting - The scope of the obligations for transaction reporting is being extended, while those of reports is being enhanced and an EU-wide system of Approved Reporting Mechanisms (ARMs) is to be introduced.

Five key drivers to integrating a successful GRC platform

From Information Age –
“With the ever-changing regulatory landscape, companies and organisations are finding that an increased level of awareness of governance, risk management and compliance (GRC) has become crucial to the corporate psyche and lifecycle of a company.

One of the biggest opportunities and challenges for organisations is determining what type of GRC platform is needed, and in tandem, how to successfully implement this framework into everyday business practices.

In a recent study examining challenges at 86 financial institutions, Deloitte reports that over 85% of respondents felt organisations would benefit from integrating and streamlining the use of technology for GRC activities enterprise-wide. This number is quickly on the rise as governance practices continue to take a front seat in the financial world.”

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