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Current state of Financial institutions

The year 2020 being a challenging one for the markets of European asset management industries, unprecedented changes were faced by firms because of the recessions. As many employees were forced to work from as the immediate consequences of the pandemic entitled. That came with little to no preparation time with sudden sell-offs of the market creating a major global liquidity shortage.

State Street conducted several researches to assess their employees especially their asset managers’ performances. And to the surprise they found satisfactory responses from their managers through the perspective of their institutional clients and also their investment advisers, European managers scored high through the bear markets.

Multiple questions like what will be the pandemic’s effects on asset management,

How the changes will be brought about? What will be the long term operations? Whether to have a different way of tackling things or to stick to the same old methods of pre-Covid times etc., was asked after there was calm in the air again.

 State Street conducted another survey in autumn of more than 600 investment institutions all over the world which included 91 European asset management organisations with the same set of questions. The results were similar to the ones of their previous surveys. There was a sense of fighting back and consolidation in top line results. European asset managers are focused on getting back their lost returns for their portfolios which made them to have their top growth objective as improve investment performance. 45% of the investors were ready to engage their companies, a long-standing trend in the asset management in a merger or an acquisition deal in the coming 10 to 12 months in Europe and beyond.

In the year 2018, a Brexit deal was not possible between the European Union and a majority of UK members of the parliament and the confidence on the targets of meeting the growth were very low. The European managers had a comparatively higher confidence this year (52%) but lower than of last year (61%).

 82 % of the European managers were confident in meeting their goals on a five-year Horizon. As the pandemic stroked the markets , the post-Covid taxation was to be paid to government expenditure which made a threat to the growth placing only 38% of the European asset managers placing in their top three.

One of the interesting results of the survey was the extent to which work from home experience is expected to become the new normal. Almost 55% of the European asset management firms have said that most of their employees will continue to work from home now onwards. A lasting move to work remotely and confirming the need to accelerate existing projects like digital transformation.


Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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