NEWSLETTER of December 23, 2022

The following content has been added at finexpert:

Deloitte
DER BANKEN- UND KAPITALMARKTAUSBLICK 2023
As the impact of the challenging macroeconomic environment varies greatly from country to country, the effect on banks will also be very uneven globally. While low or negative economic growth will have a negative impact on banks' business prospects, rising interest rates will have a favorable effect. Large institutions with sufficient capital buffers should have built up enough resilience to withstand a coming economic downturn. >more

KfW Research
PERMANENTLY HIGH ENERGY COSTS MAY OVERBURDEN MANY SELF-EMPLOYED PEOPLE FINANCIALLY - START-UP PLANS ALSO AFFECTED
The majority of self-employed people are struggling with increased energy costs. However, the energy cost increases are passed on by less than half of the self-employed, and only in part, because they cannot enforce price increases. Energy price inflation is thus pushing many self-employed workers to their breaking point. If energy costs remained permanently high, many self-employed would be financially overburdened. One fifth of the self-employed see the energy crisis as threatening their existence. >more

BCG
DO GREEN DEALS CREATE VALUE?
A recent BCG study finds that green deals generally create more value than nongreen deals upon announcement and over the ensuing two years. At a more granular level, however, the industry, region, boldness of the deal, and characteristics of the parties are important variables. Although the findings paint a complex picture, the message is clear: companies that use the right approach to green dealmaking generate higher returns. >more

Bank for International Settlements
BIS QUARTERLY REVIEW: DEZEMBER 2022
New BIS analysis of the 2022 Triennial Central Bank Survey shows shifts in trading patterns and market structure in foreign exchange and over-the-counter interest rate derivatives markets, identifying risks deserving attention. Foreign exchange swap positions point to over $80 trillion of hidden US dollar debt, reported off-balance sheet. The volume of daily foreign exchange turnover subject to settlement risk remains stubbornly high despite mechanisms to mitigate such risks. >more

CARBON TAXES AND THE GEOGRAPHY OF FOSSIL LENDING
Luc Laeven, and Alexander A. Popov
2022
Using data on syndicated loans, we find that the introduction of a carbon tax is associated with an increase in domestic banks’ lending to coal, oil, and gas companies in foreign countries. This effect is particularly pronounced for banks with large prior fossil-lending exposures, suggesting a role for bank specialization. Lending to private companies in foreign markets increases relatively more, which points to an intensification of banks’ incentives to avoid public scrutiny. We also find that banks reallocate a relatively larger share of their fossil loan portfolio to countries with less strict environ-mental regulation and bank supervision. >more

ACCESSING PRIVATE MARKETS GLOBALLY: CONTRACTS AND COSTS
Wayne Lim
2022
This paper examines contracts and the costs of accessing private markets globally. Contract terms vary by fund region and type. European funds charge lower fees than US funds, but evidence linking regulation to fee compression is weak. Investors’ costs are estimated to be 5% to 26% of committed capital. The fee drag on gross-to-net TVPI is 0.1x to 0.7x and 5% to 8% in annualized terms. While managers set fees that effectively capture excess returns, there is limited evidence of agency costs. Incentive fees are not associated with performance. Instead, higher managerial ownership is a predictor of performance. >more