search.noResults

search.searching

dataCollection.invalidEmail
note.createNoteMessage

search.noResults

search.searching

orderForm.title

orderForm.productCode
orderForm.description
orderForm.quantity
orderForm.itemPrice
orderForm.price
orderForm.totalPrice
orderForm.deliveryDetails.billingAddress
orderForm.deliveryDetails.deliveryAddress
orderForm.noItems
Canada has of course been notable in the G7 universe for not having deployed any unconventional policy measures, and it is this perhaps that allows the Bank of Canada to be rather more candid about the challenge of the ballooning of global debt. Deputy governor Wilkins recent speech on the “Age of Leverage” noted “Global debt now totals around $240  more than three times current global gross domestic product (GDP) “ “That is a headwind to growth and makes us vulnerable to another  steps taken by central banks had occurred, we’re needed to clean up the  added “that strikes me though is how much overall leverage has grown  debt has skyrocketed over the past 10 years, to close to 90 per cent  nominal terms over the same period.” “Growth in corporate debt can be a good thing, especially when companies are borrowing to invest in new capacity. But it has exploded over the past decade and has some risky qualities.”


 the not too distant future markets will have to face up to. “The latest  under management for investment funds at US$45 trillion at the   worldwide. There are two key reasons for this. First, the low interest rate environment in advanced economies has spurred investors to seek higher returns abroad. Second, the rising prominence of new products such as exchange-traded funds (ETFs) has made it easy for a broader range of investors to gain exposure to emerging-market debt and high-yield bonds. The expansion of these products is a natural result of  


“What concerns me though is we don’t know how these funds will react  will evolve. We’ve seen more uncertainty in markets in recent months, but we haven’t seen a broad and sustained increase in risk aversion. If fund managers were to suddenly shift their asset allocations, the  models of investment funds could further amplify the resulting stresses. For instance, the liquidity of ETF shares is widely thought to be higher than that of the underlying assets. In a stress situation, herd behaviour among ETF investors could amplify changes in asset prices and lead to widespread contagion.” In principle this is an important reminder that markets’ reaction function has been deeply impaired, and the next crisis may indeed be much worse than the last, even if it may still be some years away.


Marc Ostwald E: marc.ostwald@admisi.com T: +44(0) 20 7716 8534


10 | ADMISI - The Ghost In The Machine | March/April 2019


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40