NEWSLETTER of July 18, 2025

The following content has been added at finexpert:

Institut der Wirtschaftsprüfer in Deutschland
IDW KNOWLEDGE PAPER ZUR BILANZIERUNG VON GRÜNEN FINANZIERUNGEN
In 2021, the IDW published a Knowledge Paper contributing to the emerging discussion around the accounting of a new category of financial instruments—so-called "green" financial instruments. These include bonds used to (re)finance green projects and instruments with interest rates linked to sustainability factors. Since then, the IASB has issued amendments to IFRS 9 and IFRS 7 to address these instruments, and the IDW's national accounting board (FAB) has published guidance for German GAAP. This updated Knowledge Paper reflects these developments and aims to promote consistent interpretation and application of accounting rules to enhance transparency in financial reporting under both IFRS and HGB. >more

PwC
DEUTSCHER MASCHINENBAU: IM SOG DER GEOPOLITIK?
The PwC Maschinenbau-Barometer Q2 2025 reveals a cautious recovery in Germany’s mechanical engineering sector. While one in four executives now view the domestic economy positively, global outlooks remain clouded by geopolitical risks and trade tensions. Industry-wide revenues are expected to decline slightly (–1.7 %), though individual firms anticipate modest growth (+0.3 %). Cost pressures persist — especially from energy and labor — yet investment sentiment has improved, with nearly a quarter planning increased spending. Artificial intelligence is seen as the most transformative technology, highlighting the sector’s shift toward digital innovation. >more

Deutsche Bank Research
CHARTS TO MAKE YOU GO WOW!
Deutsche Bank’s latest chartbook, “Charts that make you go WOW!”, presents over 50 striking visualizations capturing the most surprising, insightful, and conversation-starting trends in global economics, markets, demographics, and geopolitics. Drawing on proprietary research and publicly available datasets, this publication is designed to challenge assumptions, reveal unexpected relationships, and stimulate debate. >more

KfW Research
ALTERUNG: UNTERSCHÄTZTES HEMMNIS VON INVESTITIONEN IM MITTELSTAND
Older owners of small and medium-sized enterprises (SMEs) in Germany invest less frequently than their younger counterparts. This is shown by evaluations based on the KfW SME Panel. However, this investment gap is not a new phenomenon: for over twenty years, companies with owners under the age of 40 have been investing on average 20 percentage points more frequently than companies with owners over the age of 60. However, this is becoming increasingly problematic due to demographic trends: the group of older entrepreneurs is growing ever larger while there is a shortage of young talent. The slowing effect on investment in SMEs is therefore increasing overall. In terms of securing future competitiveness and the investment requirements resulting from the dual transformation of the corporate sector, these are not very encouraging developments. >more

GLOBAL SUPPLY CHAIN DISRUPTIONS AND PRODUCT MARKET COMPETITION
Karca Aral, Erasmo Giambona, Ricardo Lopez A., and Gordon M. Phillips
2025
We study how production networks and product market competition interact in propagating supply chain shocks in the recent 2018 U.S.-China trade war and during the COVID-19 pandemic. U.S. firms with Chinese suppliers experienced sizable sales declines in the period following both of these shocks, as trade tensions between the U.S. and China escalated and the pandemic impacted production in China. Notably, these sales losses occurred for firms in less competitive industries and with less diversified supply chains. The main policy implication is that competition can mitigate the effect of supply chain shocks. >more

ADOPTION OF CENTRAL BANK DIGITAL CURRENCIES: INITIAL EVIDENCE FROM CHINA
Haichen Bai, Lin William Cong, Mei Luo, and Ping Xie
2025
Central banks all over the world are at various stage of developing central bank digital currency (CBDC). Few countries have launched the CBDC or widely used it in the economy. In addition to surveying the literature, which features extremely scarce empirical studies due to data limitations, this paper provides likely the earliest and the most comprehensive empirical documentation of the adoption of China’s CBDC (e-CNY) after the central bank launched and actively promoted it in pilot regions using both regulatory power and economic incentives. We find that regions with active promotions for e-CNY plausibly witness more frequent and larger e-CNY transactions, more wallet creations, and greater merchant adoption. However, despite the strong intervention, individual users mostly stick to existing electronic payment Apps and are reluctant to switch to e-CNY. Given the world eagerly learns from China’s experiment and China plans to expand the application scope of e-CNY as a general payment tool domestically and internationally with added smart-contract functions, we discuss primary challenges and potential paths forward for the development of e-CNY and CBDCs in general. >more