NEWSLETTER of August 7, 2020

The following content has been added at finexpert:

Oliver Wyman | International Banking Federation
BIG BANKS, BIGGER TECHS HOW POLICY-MAKERS COULD RESPOND TO A PROBABLE DISCONTINUITY
The report shows how authorities worldwide face the difficult challenge of ensuring that regulation and supervision protects consumers and systemic stability while capturing the benefits of innovation and competition. IBFed and Oliver Wyman asked a broad range of industry participants and policymakers across most major markets about their current views and what they viewed as challenges for the future. The markets included the UK, the EU, the US, Australia, Brazil, Canada, China, India, Japan, South Korea and South Africa. >more

BCG
THE FUTURE OF WEALTH MANAGEMENT: A CEO AGENDA
The wealth management industry is over 200 years old. Yet for most of that history, providers have operated according to the same general playbook. It took the massive digital and regulatory disruption of the past 20 years to begin shaking up industry business models, and evidence suggests that most providers have moved slowly, with many still adhering to traditional ways of private banking. >more

EY
PRIVATE EQUITY: DER TRANSAKTIONSMARKT IN DEUTSCHLAND H1 2020
Two megadeals and the corona crisis shaped the German private equity market in the first half of the year. The number of deals collapsed from 112 in the same period last year to 94. This represents a decline of 16 percent and marks the lowest figure since 2016. The reluctance of financial investors in the wake of the corona pandemic was particularly noticeable in the second quarter: Between April and June, they executed only 38 deals, compared with 56 transactions in the first quarter. Despite the significant decline: at 24.2 billion euros, the transaction value from January to June was more than three times as high as in the same period last year. Such a high value has never been achieved in any first half of the period under review. This was mainly due to two mega deals. >more

Bank for International Settlements
BIS QUARTERLY REVIEW: JUNE 2020
This Quarterly Review draws on several BIS data sets to examine emerging market corporates' external and foreign currency debt on the eve of the Covid-19 outbreak.  It also assesses whether emerging market government debt is a cause for concern. >more
 

WHO IS AFRAID OF BLACKROCK?
Massimo Massa, David Schumacher, and Yan Wang
2020
We exploit the merger between BlackRock and Barclays Global Investors to study how changes in expected ownership concentration affect the investment behavior of funds and the cross-section of stocks worldwide. We find that funds with open-end structures and a large exposure to commonly-held stocks begin avoiding these stocks following the merger announcement. This leads to a permanent change in the composition of institutional ownership and a negative price and liquidity impact. We confirm these results in a large sample of global asset management mergers. Our findings suggest that market participants act strategically in response to changes in expected financial fragility. >more

THE HIDDEN COSTS OF BEING PUBLIC: EVIDENCE FROM MULTINATIONAL FIRMS OPERATING IN AN EMERGING MARKET
Pablo Slutzky
2020
This paper studies how firms deal with business regulations that limit their operations. I first exploit a natural experiment to show that the ownership structure of a firm affects its degree of compliance with regulations, with publicly listed firms complying more than privately held ones. Then I show that this differential compliance imposes a burden on listed firms that helps explain the patterns of M&A activity. When the level of market regulations increases, private firms acquire listed ones, and listed firms stop acquiring private ones. These results uncover an additional cost faced by listed companies, identify a new driver of M&A transactions, and show evidence that high levels of regulation lead to opaque corporate structures. >more