Saturday 18th April 2015
NEWS TICKER FRIDAY APRIL 17TH 2015: -On June 9, 2015, the Federal Trade Commission will host a workshop to examine competition, consumer protection, and economic issues raised by the proliferation of online and mobile peer-to peer business platforms in certain sectors of the economy, often referred to as the “sharing economy.” The workshop will take place in Washington, D.C., at the FTC’s Constitution Center conference space. Peer-to-peer platforms, which enable suppliers and consumers to connect and do business, have led to the emergence of new business models in industries that have been subject to regulation. The FTC’s sharing economy workshop will explore how regulatory frameworks can accommodate new sharing economy business models while maintaining appropriate consumer protections and a competitive marketplace. “We are seeing a dramatic growth in products and services that are built on peer-to-peer platforms, such as ride-sharing and property rentals, as more entrepreneurs harness the power of technology to reach more consumers,” says FTC Chairwoman Edith Ramirez. “The resulting business models have great potential to benefit our economy and consumers. Through our workshop, we want to better understand the competitive impact of these new business models, as well as their interactions with existing regulatory frameworks.” - he Straits Times Index (STI) ended 6.42 points or 0.18% lower to 3525.19, taking the year-to-date performance to +4.76%. The top active stocks today were Keppel Corp, which declined 2.01%, DBS, which gained 0.91%, SingTel, which gained 0.23%, UOB, which gained 0.38% and ComfortDelGro, with a 1.70% advance. The FTSE ST Mid Cap Index fell 0.30%, while the FTSE ST Small Cap Index rose 0.06%. The outperforming sectors today were represented by the FTSE ST Utilities Index, which rose 1.60%. The two biggest stocks of the Index - United Envirotech and Hyflux – ended 5.12% higher and 2.09% lower respectively. The underperforming sector was the FTSE ST Basic Materials Index, which slipped 1.82%. Midas Holdings shares declined 2.56% and Geo Energy Resources remained unchanged - It has been a testing day in the markets, with most stock markets reporting substantial losses. The spectre of another crisis in Greece as the IMF talked tough on the country adhering to its repayment schedule, a terminal outage at Bloomberg and a clampdown on OTC and short selling in China combined to test investor sentiment. The FTSE 100, fell briefly below 7000 to end up finding support at 7007; however Spain's Ibex and Italy's FTSE MIB were both 2% down while the German DAX 30 slid 1.8% and France's CAC 40 fell 1.2% - The outage impacted the UK DMO’s offer of £300m 1 month bill, due 18-May-2015(ISIN GB00BDNKWT09); the £1,000m 3-months bill due 20-Jul-2015 (ISIN GB00BDNLZ833), and the £1,500m 6-months bill due 19-Oct-2015 (ISIN GB00BDNNDG38) was conducted between midday and14.30 today. Any bids submitted in the aborted operation earlier this morning were deemed null and void - Catastrophe bond issuance is forecast to have risen almost 30% so far this year, though the size of the market remains modest. The increase in demand for cat bonds means that some bonds are now trading at a discount to their original issue price for the first time in years. Issuance for the year through to mid-April is predicted to be up 27% on 2014, at around $2.1bn, The full-year trend also looks positive, following on from a record cat bond issuance of $8.4bn in 2014 - Moody's Investors Service has described in detail the approach it takes to allocating expected credit losses across the various classes of debt issued by banks in the US, the EU and Switzerland. The liability hierarchy or "waterfall" that Moody's employs to allocate estimated losses to debt classes in these three jurisdictions incorporates the implications of key structural differences in their bank resolution and bail-in frameworks. In this way, the liability hierarchy aims to capture the prioritisation authorities will give different debt classes when apportioning losses to creditors in the event of a bank's failure. The construction of a given bank's liability structure at failure serves as the starting point of Moody's Loss Given Failure (LGF) analysis, instituted as part of its new bank rating methodology. The LGF framework is used to assess and differentiate creditor risk across banks' liability structures, as detailed in Moody's report "How Resolution Frameworks Drive Our Creditor Hierarchies." The bank resolution and bail-in frameworks in the US, EU, and Switzerland all aim to limit the use of public funds in bank resolutions while mitigating risks to financial stability. Important differences in these frameworks include the degree of power authorities have to write down or convert capital instruments, differences in depositor preference, and variations in the obligations of holding companies to their operating companies - Close Brothers has reportedly acquired advisory firm Mackay Stewart & Brown for an undisclosed amount. Andy Cumming, head of advice at Close Brothers Asset Management, said the acquisition would strengthen the national advice firm’s Scottish operation.

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The European Review

By Patrick Artus, chief economist at Natixis

Countries’ attractiveness measured by business investment

Friday, 08 June 2012 Written by 
Countries’ attractiveness measured by business investment Countries’ attractiveness for companies can be measured indirectly, by looking at trends in cost-competitiveness, export market shares, production capacity and employment. But it can also be measured directly by looking at business investment: what proportion of investment by a country’s companies is carried out in that country or abroad? How much is invested by foreign companies in that country? We compare the United States, the United Kingdom, Germany, France, Spain, Italy, Sweden and Japan. The two measures of attractiveness rank the countries quite differently. If we measure attractiveness by business investment, the two most attractive countries are the United States and the United Kingdom, the two least attractive countries Italy and France. http://www.ftseglobalmarkets.com/

Countries’ attractiveness for companies can be measured indirectly, by looking at trends in cost-competitiveness, export market shares, production capacity and employment. But it can also be measured directly by looking at business investment: what proportion of investment by a country’s companies is carried out in that country or abroad? How much is invested by foreign companies in that country? We compare the United States, the United Kingdom, Germany, France, Spain, Italy, Sweden and Japan.

The two measures of attractiveness rank the countries quite differently. If we measure attractiveness by business investment, the two most attractive countries are the United States and the United Kingdom, the two least attractive countries Italy and France.

Countries’ attractiveness for setting up business

Attractiveness depends on cost-competitiveness, the tax system, the skill level of the labour force, corporate profitability, public infrastructure, etc. So it is a multi-faceted and complex variable.



It can be measured indirectly, by:

  • cost-competitiveness, in light of the trend in exchange rates measured by the real trade-weighted exchange rate. Currently the currencies of the United Kingdom, Italy and Spain are overvalued in real terms;
  • export market shares, in which losses have been very marked in Japan, the United Kingdom, France and Italy;
  • the trend in potential GDP and in production capacity in industry. Potential GDP has grown significantly in the United States, while production capacity has stagnated in the United Kingdom, Japan, Spain and Italy;
  • growth in employment excluding the civil service, which has been the most vigorous in Spain and the weakest in Japan.

If we use these criteria, the most attractive countries for companies are the United States, Sweden, Germany, Spain and France, while the least attractive are the United Kingdom, Italy and Japan.

Attractiveness measured by investment

However, for each country we also look at two direct measures of attractiveness for companies:

  • the proportion of the country’s business investment that is carried out in that country and not abroad. This proportion is low in Sweden, France, Spain and the United Kingdom;
  • the share of investment by foreign companies in GDP. This proportion is high in Sweden, the United Kingdom and Spain.

According to this investment criterion of attractiveness, the most attractive countries are the United States, the United Kingdom, Spain; the least attractive are France and Italy.

Which are the most attractive countries among the large OECD countries?

When you summarise both the indirect and the direct approaches, you realize that the United States tops the ranking, while France and Italy are found at the bottom.

Patrick Artus

A graduate of Ecole Polytechnique, of Ecole Nationale de la Statistique et de l'Adminstration Economique and of Institut d'Etudes Politiques de Paris, Patrick Artus is today the Chief Economist at Natixis. He began his career in 1975 where his work included economic forecasting and modelisation. He then worked at the Economics Department of the OECD (1980), before becoming Head of Research at the ENSAE. Thereafter, Patrick taught seminars on research at Paris Dauphine (1982) and was Professor at a number of Universities (including Dauphine, ENSAE, Centre des Hautes Etudes de l'Armement, Ecole Nationale des Ponts et Chaussées and HEC Lausanne).

Patrick is now Professor of Economics at University Paris I Panthéon-Sorbonne. He combines these responsibilities with his research work at Natixis. Patrick was awarded "Best Economist of the year 1996" by the "Nouvel Economiste", and today is a member of the council of economic advisors to the French Prime Minister. He is also a board member at Total and Ipsos.

Website: cib.natixis.com/research/economic.aspx

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