NEWSLETTER of April 11, 2025

The following content has been added at finexpert:

KfW Research
KFW-IFO-KREDITHÜRDE Q1 2025
The fragile economic situation and trade policy uncertainty are making it more difficult for companies to access loans. This is shown by the survey results on the KfW-ifo credit hurdle among companies in the first quarter of 2025. A new record proportion of SMEs found themselves subject to strict bank standards in loan negotiations. At almost 34% of small and medium-sized enterprises, the highest proportion from the previous quarter was once again exceeded. Although access to credit eased somewhat for large companies, it remained below average. Only almost one in four large companies complained about credit restrictions, compared to almost one in three large companies at the end of 2024. The difficult economic environment is the main reason for the credit hurdles across both company classes. A selection effect is also influencing the results, as the number of companies with weak finances seeking credit is likely to have increased. >more

Neuberger Berman
PRIVATE MARKETS: Q4 2024 PRELIMINARY VALUATION SUMMARY & ANALYSIS
For Q4 2024, based on preliminary analysis, NB Private Markets currently anticipates buyout fund (including growth equity) valuations to be modestly positive in reported currency, increasing by 1.3%, but flat in terms of USD, with an average decrease of 0.3%, as FX translation was a significant factor in Q4. Venture capital funds will increase in value by an average of 1.7% in USD (+2.2% in reported currency) on average. Private equity distribution rates remained relatively low throughout 2024 as a percentage of beginning NAV, but there were some signs of recovery with Q4 producing the highest quarterly distribution rate of the past three years. >more

Deutsche Bank Research
DEUTSCHLAND-MONITOR BAUFINANZIERUNG Q2/2025
After two years of recession, Germany should emerge from recession in the course of 2025. We expect GDP growth of 0.3% in 2025 and 1.5% in 2026. Long-term mortgage rates fell from 4% at the start of 2024 to 3.3% at the start of 2025. The financial markets have priced in higher government debt in recent weeks. Accordingly, mortgage rates are now likely to be back at 4%. Despite positive impetus from the construction overhang, we expect the number of completions to be just 240,000 apartments in 2024 and 245,000 apartments in 2025. In view of the recent rise in interest rates, affordability is likely to decline. We expect an index value of almost 90 points. At this level, we expect a sideways movement until the end of 2026. >more

Goldman Sachs
THE IMPACT OF UNCERTAINTY ON INVESTMENT, HIRING, AND CONSUMER SPENDING
Measures of policy uncertainty have far surpassed levels reached during the first Trump administration and could rise further as new policies are announced and other countries respond to US tariffs. Goldman Sachs Research estimates the effects of that uncertainty on business investment, hiring, and consumer spending. >more

Institut der deutschen Wirtschaft
FINANZIERUNGSLÖSUNGEN FÜR DIE KLIMANEUTRALE TRANSFORMATION VON UNTERNEHMEN
The climate-neutral transformation is urgently needed - both for climate protection reasons and to strengthen European energy sovereignty. There is an acute need for Germany to invest in energy infrastructure, industrial plants and sustainable technologies. By 2030, more than 400 billion euros will be needed for energy infrastructure alone, while a further 55 billion euros will have to be invested in low-emission plants and efficient processes (BDI/BCG/IW, 2024). However, without clear and reliable framework conditions and secure financing, there is a risk of an investment blockade. This would have serious consequences: The competitiveness of existing industry would decline and growth opportunities in forward-looking sectors would remain untapped. >more

INCOME SHIFTING OUT OF THE UNITED STATES BY FOREIGN MULTINATIONAL FIRMS
James F. Albertus
2025
I find that foreign multinational firms engage in tax-motivated income shifting out of the U.S. The analysis uses novel data on foreign-owned U.S. subsidiaries as well as variation in foreign countries' tax rates and controlled foreign corporation rules. Foreign multinational firms rely primarily on transfer pricing to shift income out of the U.S., and the aggregate amount of shifted income is modest. When foreign tax policy changes inhibit income shifting, foreign-owned U.S. subsidiaries' investment and employment fall. The results indicate that the U.S. economy has limited exposure to tax policies set abroad through foreign direct investment in the United States. >more

CUSTOMER DATA ACCESS AND FINTECH ENTRY: EARLY EVIDENCE FROM OPEN BANKING
Tania Babina, Saleem Bahaj, Greg Buchak, Filippo De Marco, Angus Foulis, Will Gornall, Francesco Mazzola, and Tong Yu
2025
Open banking (OB) empowers bank customers to share transaction data with fintechs and other banks. 49 countries have adopted OB policies. Consumer trust in fintechs predicts OB policy adoption and adoption spurs investment in fintechs. UK microdata shows that OB enables: i) consumers to access both financial advice and credit; ii) SMEs to establish new fintech lending relationships. In a calibrated model, OB universally improves welfare through entry and product improvements when used for advice. When used for credit, OB promotes entry and competition by reducing adverse selection, but higher prices for costlier or privacy-conscious consumers partially offset these benefits. >more