The Intuition Finance Digest: Recent Episodes
Intuition Publishing (www.intuition.com)
What’s happening in the world of finance? The Intuition Finance Digest gives you a unique take on some of the industry’s major trends.
We sat down with Melissa Watrass of Trillium Surveyor to talk about her transition from anthropology to finance, the role of AI in her work, the important skills for today's workforce, the role of learning, DEI, and much more.
Emerging market (EM) assets have rallied this year, with debt leading the way and equities showing signs of renewed strength. Lower inflation, easier monetary policy, and shifting trade patterns are all contributing to the momentum.
With its emerging digital assets alliance with the US, the UK is positioning itself as a bridgehead for US crypto firms seeking access to Europe, while the US is advancing stablecoins to reinforce the dollar’s dominance in global finance.
https://www.intuition.com/uk-looks-to-benefit-from-us-crypto-alliance/
In September 2015, the leaders of United Nations’ 193 member states adopted the 2030 Agenda for Sustainable Development (“Transforming our World”), a universal agenda containing the Sustainable Development Goals (SDGs).
The SDGs were selected after the largest public consultation in the UN’s history, resulting in 17 interlinked global objectives for reducing inequality, protecting the planet, and paving the way toward a prosperous and more sustainable future for all.
The 17 goals, which comprise 169 targets and 230 indicators, are intended to be achieved by 2030.
Responsible AI refers to the design, development, deployment, and use of AI systems in a manner that is ethical, safe, transparent, regulatory-compliant, and beneficial to society at large.
It acknowledges that AI has the power to bring about significant improvements across numerous sectors and industries, as well as wider society, but that it also gives rise to significant risks and potential negative outcomes.
Responsible AI aims to embed ethical principles into AI systems and workflows to mitigate these risks and negative outcomes, while maximizing the benefits of AI.
Businesses and other organizations have published various principles-based frameworks for responsible AI, from tech giants such as Microsoft and Google to international bodies such as the OECD and the World Economic Forum.
While individual frameworks differ, some common themes or requirements for responsible AI can be identified.
Nature risk, or nature-related financial risk, refers to the potential for financial losses that banks and the wider financialsector face from events associated with the degradation of nature, declines in biodiversity, or the collapse of ecosystems.
As the United States rolls back the climate risk mitigation measures of the previous administration, elsewhere the implications of rising temperatures are being keenly studied. This is particularly the case in the insurance industry which is effectively pronouncing more and more assets uninsurable with far-reaching consequences.
A recent UK Supreme Court decision in relation to car finance may mean that the banking industry has escaped its worst fears in that specific case, but the issue has served to bring the issue of bank conduct risk out into the open once more.
The growing integration of artificial intelligence into financial compliance is transforming how institutions detect and prevent fraud, as well as combat money laundering. Through advanced machine learning models that analyse vast datasets in real time, AI enables more accurate risk assessment, reduces false positives, and streamlines investigative processes—shaping a future where financial crime prevention is more proactive, efficient, and adaptive.
The recent high-profile launch of tokenized money market funds (MMFs) in the US, following the passage of landmark legislation, marks a significant step in bringing blockchain-based finance into the regulatory mainstream, shifting attention away from crypto speculation and toward more institutional, low-risk use cases.
While the US is turning to tariffs in an attempt to rebalance its widening trade deficit, deeper structural forces are also in play – most notably, the world’s enduring trust in the US as a safe harbor for capital.
While the US is turning to tariffs in anattempt to rebalance its widening trade deficit, deeper structural forces arealso in play – most notably, the world’s enduring trust in the US as a safeharbor for capital.
Organizational norms influence behavior, and unethical behavior, particularly from senior management, can be contagious. So, the first step in an organization's fight against fraud is to establish an ethical culture within the organization.
Views on the appropriate role of the private sector in the design and delivery of financial education differ.
For some, financial services providers are well placed to provide education to existing and potential customers. Others take the view that a conflict of interest exists and so the banking sector’s role should be, at most, secondary to national schemes.
The World Bank insists that any potential conflict of interest is properly recognized, because financial institutions may encourage policymakers to employ financial education in a manner designed to reduce or limit more effective consumer protection regulations.
ESG appears to be retreating, with banks having increased their fossil fuel financing in 2024, just as climate change poses growing threats to the insurance industry and raises questions about financial stability.
A new report, Banking on Climate Chaos, by a nonprofit group finds that despite previous commitments to “net zero” and other climate goals, global banks significantly scaled back those pledges in 2024 and substantially increased fossil fuel financing.
Key findings in the report include:
- The 65 largest banks worldwide committed USD 869 billion to companies involved in fossil fuels in 2024.
- Of that, USD 429 billion went to companies expanding fossil fuel production and infrastructure.
- Over two-thirds of these banks (45 out of 65) increased fossil fuel financing from 2023 to 2024, with 48 banks boosting financing specifically for fossil fuel expansion.
Banks argue they must continue financing fossil fuel companies to support their transition away from fossil fuels. However, the report counters that this justification only holds if the company has a credible transition plan that includes winding down production.
Independent analyses show that oil and gas majors’ transition plans are “not credibly aligned” with 1.5°C pathways. Therefore, financing companies expanding fossil fuel infrastructure cannot be considered “transition finance.”
Banks exit Net Zero Alliance
The report also highlights what it calls the “collapse” of the Net Zero Banking Alliance (NZBA). Launched in 2021 with UN backing, the NZBA aimed to align bank lending and underwriting portfolios with net zero carbon emissions by 2050, limiting temperature increases to 1.5°C above pre-industrial levels.
However, earlier this year, all US, Canadian, and Japanese banks exited the alliance. Now, less than half of the banks covered in the report (30 out of 65) remain members. The NZBA subsequently softened its climate target to “well below 2 degrees.”
Accordingly, the report urges banking regulators, supervisors, and policymakers to implement measures that align financial activities with climate goals – a step it considers crucial for financial stability amid the worsening climate emergency.
Insurance viability threatens financial stability
This call comes amid growing concerns over climate change’s impact on the insurance industry’s viability and the wider implications for financial stability.
In January, the Financial Stability Board (FSB) announced it is coordinating international efforts to address climate-related financial risks. It noted that these risks are global and will affect all entities, sectors, and economies. Extreme climate events, as well as a disorderly transition to a low-carbon economy, could destabilize the financial system, according to the FSB.
The FSB highlights growing evidence that insurance is becoming more expensive – and in some cases, unavailable. Rising risk premia could trigger falling asset prices in the short term.
Günther Thallinger, former senior executive at insurance giant Allianz, echoed these concerns, warning that “entire regions are becoming uninsurable,” posing a systemic risk that threatens the financial sector’s foundation.
“If insurance is no longer available, other financial services become unavailable too,” he said. “Houses that cannot be insured cannot be mortgaged. No bank will issue loans for uninsurable property. Credit markets freeze. This is a climate-induced credit crunch.”
The move by BNPL provider Klarna into mobile phone services signals an ambition to builda “super app.” But while open finance holds promise, replicating Chinese platforms suchas WeChat and Alipay may be a step too far.
Intuition Know-How has several tutorials relevant to the content of this podcast:
- Banks & Banking
- Business of Consumer (Retail) Banking
- Banking Regulation – An Introduction
- Financial Inclusion – An Introduction
- FinTech – An Introduction
- APIs
- Digital Banking – An Introduction
- Open Banking & Open Finance
- BaaS & BaaP
- Embedded Finance
One of the most commonly used measures for environmental risk is carbon emissions, sometimes referred to as a carbon footprint.
Carbon footprinting refers to the process of calculating and analyzing the total amount of GHGs (not just carbon dioxide) emitted directly or indirectly by an individual or entity. For banks and other businesses, it can help to inform sustainability strategies and enhance their reputation.
AI is not just one technology. Rather, it is an entire field of study in the same way that something like physics is.
Similarly, while physics has numerous branches or subfields – such as thermodynamics, electromagnetism, and quantum mechanics – so too does AI:
- Machine learning (ML), for instance, is a subfield that lies at the core of AI.
- Dig down a bit further and you’ll discover deep learning (DL), which is a subfield of ML.
- DL, in turn, serves as the foundation on which many generative AI models are built.
In essence, each concept or technology builds upon the previous one.
Nonbank financial institutions (NBFIs) such as hedge funds, private equity firms, and money market funds have taken a growing share of financial intermediation from traditional banks. This shift toward so-called “shadow banking” has heightened concerns about systemic risk, prompting regulators to step up scrutiny of the sector.
An initiative between a group of financial institutions and the world’s most publicly used blockchain promises to accelerate the migration of real-world assets onto the distributed ledger.
R3, a UK-based software group which has developed blockchains used by financial institutions including HSBC, Bank of America, Euroclear, and the Monetary Authority of Singapore, has struck a deal with the Solana Foundation that lets its clients issue and settle assets on Solana’s public blockchain. The Foundation will also invest in R3 and take a board seat – an unmistakable vote of confidence in a network better known (until now) for memes and retail-facing apps.
Former INM editor Stephen Rae joins us to dissect Europe’s new Anti-Money-Laundering Authority, U.S. deregulation trends, and the future of global AML.
This podcast examines how policy decisions and executive actions from the Trump administration continue to influence today’s global financial landscape, particularly the relationship between political leadership and the Federal Reserve.
From trade policies to discussions around central bank independence, gain a deeper understanding of the factors shaping market sentiment and their potential impact on US Treasury instruments and the US Dollar.
The first 100 days or so of Donald Trump’s administration have been characterized by market volatility. A major factor has been the publication of highly consequential, policy-related postings on social media platforms such as X and the President's own Truth Social channel.
Active investing is evolving. As AI-powered tools gain traction and institutional flows become more visible, portfolio managers are rethinking how they build and adjust positions. At the same time, tighter research budgets and shifting regulations have made it harder to maintain a traditional fundamental approach. This conversation explores how data, timing, and technology are shaping investment strategies in 2025.
What role do banks play in financing the low-carbon transition and driving global decarbonization?
Clean and renewable energy are often used interchangeably, but they’re not the same. This podcast explains the difference.
The three-statement model is a cornerstone of investment banking and forms the basis for much of the research carried out by analysts right across the financial sector.
The election of President Trump and his use of trade tariffs as a central economic policy tool has reignited debate over their broader economic implications. The White House contends that these "reciprocal" measures are fully justified on the basis of the trading practices of major trading partners with the additional benefit of providing the stimulus for repatriation of manufacturing back to the United States. That may be the case but experience shows that tariffs as a long-term tactic are best avoided on all sides.
The meteoric rise of US mega-cap technology stocks over the past 15 years or so has led to an extraordinary level of index concentration. The combined weight of the five largest stocks in the MSCI World Index has surged from around 6% in 2015 to 20% today, while the top 10 stocks now make up 25%, up from 10% a decade ago.
A recession is a significant economic downturn affecting GDP, employment, and markets. Learn how recessions are identified, their causes, and government responses.
Explore key strategies in export and import, including trade credit, negotiations, and risk management to optimize global trade transactions.
As interest in environmental, social, and governance (ESG) issues has grown, the market for green bonds and other green assets has expanded rapidly. Today, this market includes a wide range of green debt instruments and new asset types are emerging regularly. However, a lack of universal global standards for defining and categorizing these assets poses a challenge for investors. Global and national efforts are underway to enhance standards and reporting.
Global bonds markets appear to be in a state of structural volatility. While inflationary pressures and fiscal concerns are the most oft-cited factors, the apparent failure of the markets to adapt their expectations could be just as significant.
Global bonds markets appear to be in a state of structural volatility. While inflationary pressures and fiscal concerns are the most oft-cited factors, the apparent failure of the markets to adapt their expectations could be just as significant.
A breakthrough AI model by Chinese upstart DeepSeek created a storm in global financial markets in January, slashing nearly USD 1 trillion of US tech sector market capitalization in a single day and forcing a dramatic rethink of AI valuations.
Nvidia plunged 17%, with other semiconductor stocks also suffering steep single-day losses, including Broadcom (-17%), Marvell Technology (-19%), and Micron (-11%). The Philadelphia Semiconductor Index dropped 9.2%, its sharpest decline since March 2020.
Listen to this podcast to hear the full story.
Corporate governance is concerned with optimizing and improving how companies are managed and monitored, with the goal of benefiting all stakeholders and minimizing downside risks.
Shareholders, the board of directors, management, employees, and other stakeholders all have a role to play in ensuring that companies adhere to the highest governance standards.
The Basel Committee on Banking Supervision, or BCBS, defines operational risk as: "…the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events."
Listen to this podcast to learn more about operational risk.
The second EU Payment Services Directive (PSD2) builds on the first such Directive (PSD1) by providing for the further development of a better-integrated internal market for electronic payments across the EU.
PSD2 puts in place a comprehensive framework for payment services, with the objective of making payments within the EU more efficient and secure.
The Directive also aims to provide greater consumer protection by enhancing security measures for electronic payments. It seeks to open up payment markets to new entrants to encourage more competition.
The election of Donald Trump to a second term as US President has been cheered by financial markets and beneficiaries of Trump’s policy pronouncements. However, with plenty of uncertainty looming around policy implementation, the only things we can be reasonably certain of are deregulation and uncertainty itself.
The ever-evolving landscape of global compliance is characterized by a growing number of legal requirements, ethical standards, and international norms. In today’s interconnected world, businesses and organizations are expected not only to comply with the laws of their home countries, but also to adhere to a myriad of international regulations and standards. Compliance has transformed from being a mere business function to a strategic cornerstone, reflecting an organization’s commitment to lawful and ethical behavior.
https://www.intuition.com/navigating-global-compliance-key-trends-and-challenges/
In a world where regulations are increasingly stringent, and ethical expectations from stakeholders are high, fostering a culture of compliance within an organization is imperative. For managers, this means navigating a complex landscape of legal requirements, ethical dilemmas, and organizational dynamics.
https://www.intuition.com/strategic-approaches-to-fostering-a-culture-of-compliance/
Transparency International, a global movement working in more than 100 countries for greater integrity in public life, defines corruption as ”the abuse of entrusted power for private gain.” When individuals and organizations promote interests other than the ones they are entrusted to serve, the result is corruption. It occurs in both the public and private sector.
https://www.intuition.com/corruption-explained-different-forms-and-effects/
International crime has grown exponentially over the years and continues to be a primary focus of the international community. One of the greatest challenges facing criminals is concealing the sources of their ill-gotten gains. Criminals must conceal the origins of their funds because legislation exists worldwide to allow law enforcement agencies to confiscate the proceeds of crime.
https://www.intuition.com/money-laundering-explained/
Data protection is no longer a minor concern for businesses; it has emerged as a significant tenet of the digital economy. With the European Union’s introduction of the General Data Protection Regulation (GDPR), organizations around the globe have been compelled to reassess and enhance their data governance and privacy practices.
The relentless secular bull market in tech stocks has led to structurally high index concentration. While this is an age-old market phenomenon, it still poses a challenge for fund managers and index designers, particularly with passive investing having added fuel to the debate around index concentration.
For an asset type often regarded as a “safer” corner of the crypto world, stablecoins have attracted a surprising degree of regulatory scrutiny. While stablecoins are designed to maintain a stable value, their underlying structures and use cases vary, meaning not all stablecoins are created equal. Regulators are concerned about the potential for stablecoins to pose systemic risks, particularly given their intersection with traditional financial systems.
A host of factors have conspired to act as a brake on Europe’s economic growth this century. And the situation is not helped by inherent difficulties with financing the necessary measures to increase productivity.
The notion that regulators hold absolute sway over the industries they cover is facing mounting challenges, as increasingly successful lobbying by big business to diluteregulations – ranging from bank capital requirements to climate change measures to artificial intelligence (AI) legislation – points to “regulatory capture”.
One of the major consequences of the global financial crisis of 2007-09 was a series of systematic moves by regulators to loosen the vice-like grip that incumbent banks – largely courtesy of regulators themselves – had on virtually all aspects of the payments and broader financial services market.
Famously derided as a “barbarous relic” by none less than John Maynard Keynes, and nothing more than a shiny “pet rock” to its many detractors, the allure of gold can be hard to fathom, particularly for those who pride themselves on their rational outlook. After all, gold has limited industrial or commercial utility outside of jewelry – with just 6% of production going to industrial use – and yields no income to investors.
Greenwashing – a misleading or deceptive marketing practice used by companies and other organizations to portray themselves or their products and services as environmentally friendly or sustainable – has become so ubiquitous in recent times that regulators have been forced to act. The EU’s proposed “green claims” directive is the latest initiative designed to clarify the investment regime around sustainability and ESG with the aim of protecting consumers and investors from greenwashing. Once again, however, its progress promises to be somewhat fraught.
July saw a dramatic rotation in the US stock market out of all-conquering megacap tech stocks into small caps. While a market rebalancing would be welcome, gathering economic and political uncertainty point to volatility ahead, which is a headwind for riskier small caps.
As we headed into 2024, the stage seemed set for a rousing rally in US bond markets. A combination of soft economic data releases and a dovish surprise from the Fed Chair Jerome Powell, following the FOMC’s December 2023 press conference, appeared to signal an end to the sustained high-interest-rate regime, with a cutting cycle on the cards.
The leveraged finance market has seen explosive growth in recent years, benefiting from high interest rates and strong risk appetites, reflected in tight credit spreads. But with the size of this market now estimated by some at around USD 2 trillion globally, the boom is prompting heightened regulatory scrutiny, as regulators seek to address potential vulnerabilities and risks.
The global financial crisis (GFC) of 2007-09 was a watershed event in financial markets that demanded a huge change in how banks are regulated.
The main regulatory response to the GFC was labeled Basel III by the Basel Committee on Banking Supervision (BCBS), the primary global standard-setter for prudential regulation of banks, when first set out in 2010.
This podcast is intended to clarify the differences in terminology that have emerged around this Basel Framework.
The energy transition presents several challenges for finance professionals.
These include the need to understand the financial implications of the transition, the demand for new investment strategies, and the requirement for a thorough understanding of regulatory changes related to the energy transition. Listen to this podcast to learn more about the challenges finance professionals face.
The energy industry is currently undergoing a transformative phase, as it moves from traditional fossil fuels to renewable sources.
Listen to this podcast to learn about the individual trends shaping the shift.
The shockwaves from the Global Financial Crisis (GFC) are still apparent, at least in the sphere of regulation, with the US banking industry currently engaged in an unprecedented lobbying campaign against proposed new rules to Basel III – Basel IV or the so-called “Basel Endgame”.
Beset by multiple crises and lackluster growth for over a decade, European equity market underperformance had become ingrained in investor expectations. However, since bottoming out in October 2022, they have been a surprise outperformer. Can this last?
In this 30-minute digital fireside chat, industry experts discussed the transformative power of AI, its opportunities, challenges, and the crucial element of risk management.
Inflation dynamics across developed economies arediverging. US inflation data has come in “hot” so far in 2024, but inflation in Europe has eased, falling short of expectations. While the Fed is opting to look through the data for now and sticking to its guidance for policy easing to start this year, any further bad data will test the Fed and the markets. The ECB appears to be facing no such dilemma, with easing expected to start in earnest in June, though the divergence itself is a potential obstacle.
Since the launch of ChatGPT-3 in June 2020, AI has captured the public imagination in a manner like no technological development since the Internet. The widespread availability of ChatGPT-3 and subsequentenhanced versions, along with a constant stream of other AI products coming to market, seem to be heralding the dawn of an AI-powered economy and society. The reaction has been mixed, with optimism regarding the productivity gains that AI brings tempered by fears about the disruption and displacement of vast swathes of the economy.
This article delves into the impact of ETFs on Bitcoin's price, explore previous instances of price surges due to ETF expectations, analyze the recent launches of BitcoinETFs, and discuss other factors contributing to Bitcoin's recent surge.
Toward the end of 2023, two US-based broker-dealers were subjected to multi-million dollar penalties levied by the Financial Industry Regulatory Authority (FINRA) on grounds of failure to provide “best execution” to their customers. The timing of these sanctions coincided with the introduction by the Securities and Exchange Commission (SEC) of Regulation Best Execution (Reg NMS Rule 606) – the first regulation specifically targeting best execution, as the SEC increases its scrutiny of the actions of broker-dealers in light of their customer obligations.
The world increased its global renewable energy capacity in 2023 by around 500 gigawatts (GW) to over 4,000 GW, according to the International Energy Agency (IEA). While this rate of growth in capacity (50% higher than in 2022) – the fastest in two decades – appears impressive, the same agency warned that the increase is insufficient to achieve last year’s COP28 goal of tripling renewable power capacity by 2030.
The imminent launch by the Securities and Exchange Commission (SEC) of a T+1 settlement regime for US securities is set to reduce risk but also pose challenges – especially for market participants and regulators in other jurisdictions that, for the time being, retain a longer settlement cycle and may be forced to follow the US lead in due course.
Amid strong signs that the aggressive tightening cycle implemented by monetary authorities to combat inflation may have run its course – with interest rates set to head lower later this year – markets are jubilant. However, some central bankers and economists caution that these celebrations may be premature.
As the year-end approaches, the focus of market strategists and economists is on the risks to the global economy and markets in 2024. Key potential sources of risk for the global economy include fallout from China’s real estate crisis, commodity price volatility, persistent inflation, and ballooning government deficits. For the global banking sector, key risks include liquidity/funding risk and one less widely talked about – outsourcing risk.
Exchange-traded funds (ETFs) are one of the major financial innovations of recent decades, their growing popularity reflected in an ever-rising share of assets under management. Global ETF assets hit the USD 10 trillion mark this year, of which the US accounts for the vast majority (over USD 6 trillion). But not all ETFs are the same and ongoing expansion of the product offering has come with increased risk.
The response of central authorities to the pandemic was decisive – reflationary policies that injected massive amounts of money into both the financial system and the real economy, turbocharging credit growth and asset valuations. However, the unintended consequence of all this stimulus was an unwelcome surge in inflation, exacerbated by the energy price shock caused by Russia’s invasion of Ukraine in February 2022. High and persistent inflation forced a sharp shift from a highly accommodative monetary policy stance to aggressive monetary tightening. These measures have already caused considerable stress in markets, with potentially much more to come.
For at least a decade, private assets – equities, credit, real estate, and other alternative assets that are not publicly traded – had been experiencing a boom, driven by the growing popularity of alternative assets after the global financial crisis of 2007-2009 and a broad bull market in asset prices, underpinned by extraordinarily low interest rates. While the relative performance of alternative assets was mixed, they did well in absolute terms, and the period was highly lucrative for alternative asset managers who charge higher fees than more traditional managers. But the private asset business is now beset by a number of headwinds set in motion by higher interest rates.
Most Private Bankers (with Entrepreneur clients) and Corporate RDs (CEO & CFO) feel unable to engage their clients on Corporate Finance. Thus, failing to stand out from the crowd, and missing out on potential lucrative fees.
Intuition has successfully delivered workshop programs that combine the core skills (technical and behavioral) for bankers to gain the confidence required.
In this podcast, you'll learn from our Co-Program leads Richard Clayton and Katharine Pons what it takes to succeed.
The announcement of new proposals – referred to as the “Basel III Endgame” – to bring the regulatory capital framework in the United States into line with the final provisions of Basel III is well timed following well-publicized instances of the vulnerability of the US banking sector earlier in the year.
The road to net zero is a complicated journey with multiple diversions, forks, and confusing terrain, not least exemplified by the contention that it can be achieved while actually increasing fossil fuel production.
“Higher for longer” is a mantra with which observers of the global interest rate regime have been familiar with for some time. As central banks worldwide remain resolved to stay the course of rate rises to counter obstinate inflation, so the effects of ‘normalized’ rates are beginning to bite in the form of rising levels of corporate defaults.
The recent statement by the CEO of one of the world’s largest asset managers that henceforth he would stop using the ‘weaponized’ term ‘ESG’ is clearly a consequence of a backlash against ESG investing that has been building for years.
Central bank digital currencies (CBDCs) have been characterized as a solution in search of a problem, but central banks seem resolute in their ultimate adoption, in spite of implied threats to commercial banks and financial stability.
It is more than a decade since open banking arrived on the scene to a reluctant banking sector. That is just one reason why it has yet to reach its potential but it is in less developed markets where its impact promises to be revolutionary.
The spike in interest rates over the past couple of years has transformed the banking landscape and placed
immense pressure on individual institutions, leading to dramatic rescues in the US and Switzerland, and
raising the dual spectres of systemic failure and a credit crunch.
It is widely accepted that climate change and how we respond to it has significant consequences, both for the global economy and for society in general. While banks and other financial institutions are increasingly dealing with the effect of both physical and transition climate-related risks on all aspects of their operations, regulators must concern themselves not only with the impact of these risks on individual institutions but also on broader financial stability. A recent report by the Financial Stability Board (FSB) sets out the agenda for regulators and the emerging new regime for financial institutions.
What is biodiversity? What is the Convention on biological diversity (CBD)? How does biodiversity impact finance? And how can businesses manage biodiversity risk?
After a fallow period following the global financial crisis, global macro funds last year delivered their best performance since 2008, with aggre ssive bets on soaring interest rates. This comes as no surprise, as macro funds are supposed to thrive during seismic shifts in the macro regime. Will this prove to be a one-off for macro funds, or have we entered a new era of macro volatility in which this industry subset continues to thrive?
Inflation targeting has been used as a monetary policy tool by central banks since the late 1980s, but recent events have raised the question as to whether the sacrosanct 2% target should be raised. What would be the implications of setting a higher target, and would it help solve an inflation crisis such as that currently being experienced?
As part of its “Coordinated Plan on Artificial Intelligence,” the EU has proposed a regulation that sets out harmonized rules on artificial intelligence. This addresses “the risks and problems linked to AI, without unduly constraining or hindering technological development or otherwise disproportionately increasing the cost of placing AI solutions on the market.” Many other countries are also looking at introducing legal frameworks around the use of AI. Why are such regulations emerging and will they improve or hinder the uptake of AI?
The risks associated with greenwashing – false/misleading marketing regarding the sustainability attributes of a product or service – are on the rise with signs that net-zero and other commitments made by some members of the financial sector may not be credible. But identification of greenwashing practices remains problematic as the limitations of agencies charged with evaluating ESG practices become apparent.
Many commodities have become key inputs to the global economy, but their production is often associated with processes that have serious environmental and ethical issues – deforestation, greenhouse gas (GHG) emissions, and forced/child labor, to name but a few. Are the negative impacts of commodity production inevitable or can sustainability-linked initiatives ensure the commodities sector plays its part in the green transition?
While the failed crypto exchange FTX has heightened uncertainty over this asset class, another potentially seismic event for the industry took place recently when the Ethereum blockchain merged with another blockchain (Beacon Chain). “The Merge” saw Ethereum switch its verification system from the established proof-of-work (PoW) protocol to a proof-of-stake (PoS) approach, with major implications for sustainability, scalability, and other factors related to blockchains.
Around the world, many economies are either in recession or heading toward one as a result of the inflation crisis and the associated policy response from monetary authorities. But what exactly is a “recession,” what happens during it, how long does it last, and how does it end?
With many economies bracing for downturn and a higher interest rate environment, a sharp spike in default rates is a likely prospect. What steps should banks and other lenders take to manage this?