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Europe > Switzerland

You are looking at 1 - 7 of 7 items for :

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Cover Finance & Development
Finance & Development, March 2024: Economics - How Should It Change?
International Monetary Fund. Communications Department
This issue of F&D takes a fresh look at the discipline of economics. We invited prominent economists with different perspectives to tell us how the profession can become better at answering 21st century challenges.
Keywords:
Economics teaching; world happiness report; IMF staff calculation; labor economist; accessibility Economist; Labor markets; Stock markets; Climate change; Climate finance; Global; Africa; Europe; Central Asia
Cover IMF Staff Country Reports
Switzerland: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper on Switzerland focuses on assessing Swiss National Bank (SNB) balance sheet changes in 2022. This paper clarifies the main underlying drivers, discusses potential implications, or lack thereof, on monetary and fiscal policies, and assesses the SNB’s financial performance. Central banks’ financial results are not directly comparable with each other, given their non-profit nature, the differences in their mandates and, importantly, their different accounting policies. In particular, many other central banks would have recorded much larger financial losses in 2022 if mark-to-market accounting were applied. The SNB’s financial loss in 2022 is not expected to have an impact on monetary policy operations. The SNB has appropriately warned about risks to its balance sheet, including during periods of high profitability. In addition, the SNB put in place sound safeguards against such risks, and provided transparent communications on its investment strategy. Nevertheless, large balance sheets are subject to risks, highlighting communication challenges during periods of both large profits and losses. In this context, the SNB should continue to regularly review its investment strategy and maintain adequate safeguards.
Keywords:
ECB monetary policy; monetary policy shock; SNB balance sheet; Switzerland NBFIs; mitigation target; Greenhouse gas emissions; Stock markets; Nonbank financial institutions; Climate policy; Global; Europe
Cover IMF Working Papers
Handle with Care: Regulatory Easing in Times of COVID-19
Mr. Fabian Valencia
,
Mr. Richard Varghese
,
Weijia Yao
, and
Juan Yepez
The policy response to the COVID-19 shock included regulatory easing across many jurisdictions to facilitate the flow of credit to the economy and mitigate a further ampli-fication of the shock through tighter financial conditions. Using an intraday event study,this paper examines how stock prices—a key driver in financial conditions—reacted to regulatory easing announcements in a sample of 18 advanced economies and 8 emerging markets. The paper finds that overall, regulatory easing announcements contributed to looser financial conditions, but effects varied across sectors and tools. Financial regulatory easing led to lower valuations for financial sector stocks, and higher valuations for non-financial sector stocks, particularly for industries that are more dependent on bank financing. Furthermore, valuations declined and financial conditions tightened following announcements related to easier bank capital regulation while equity valuation rose and financial conditions loosened after those about liquidity regulation. Effects from non-regulatory financial measures appear to be generally more muted.
Keywords:
Stock prices; policy announcements; financial conditions; capital; liquidity; COVID-19.; WP; liquidity regulation easing; regulation announcement; announcement dummy; equity price; market reaction
Cover IMF Staff Country Reports
Switzerland: Financial Sector Assessment Program: Technical Note: Insurance Sector Stress Testing
International Monetary Fund
This technical note discusses key findings of the insurance sector stress tests for Switzerland. The results suggest that there are market risks inside some Swiss insurance entities that may need focused attention. In particular, a moderate correction in share and property values, with interest rates ending somewhat lower than the prior cyclical lows, could cause distress to five out of nine life insurers, two of 12 nonlife insurers, and two of nine health insurers that participated in the 2006 Swiss Solvency Test (SST) field tests.
Keywords:
ISCR; CR; insurer; life insurer; interest rate; market; health insurer; term mismatch risk; B. market risk consideration; scenario testing; market turbulence; Insurance companies; Market risk; Insurance; Stress testing; Stock markets; Global
Cover IMF Working Papers
FDI Spillovers, Financial Markets, and Economic Development
Selin Sayek
,
Laura Alfaro
,
Areendam Chanda
, and
Sebnem Kalemli-Ozcan
This paper examines the role financial markets play in the relationship between foreign direct investment (FDI) and economic development. We model an economy with a continuum of agents indexed by their level of ability. Agents can either work for the foreign company or undertake entrepreneurial activities, which are subject to a fixed cost. Better financial markets allow agents to take advantage of knowledge spillovers from FDI, magnifying the output effects of FDI. Empirically, we show that well-developed financial markets allow significant gains from FDI, while FDI alone plays an ambiguous role in contributing to development.
Keywords:
WP; central bank; economic growth; entrepreneurial activity; financial markets; foreign direct investment; net FDI inflow; FDI enterprise; FDI share; FDI flow; FDI sector; Financial sector; Financial sector development; Stock markets; Foreign corporations; Sub-Saharan Africa; Africa
Cover IMF Working Papers
Country and Industry Dynamics in Stock Returns
Mr. Luis Catão
and
Mr. Allan Timmermann
A perennial question in international finance is to what extent stock returns are influenced by country-location, as opposed to industry-affiliation, factors. This paper develops a novel methodology to measure these effects, in which portfolios mimicking "pure" country and industry factors are first constructed and their joint dynamics then modeled as regime-switching processes. Estimation using global firm-level data allows us to identify well-defined volatility states over the past thirty years and shows that the contribution of the industry factor becomes systematically more prominent during high global volatility states, while the country factor contribution declines. Using the model's estimates, we find that portfolio diversification possibilities vary considerably across economic states.
Keywords:
WP; industry portfolio; country portfolio; volatility State; Diversification; Risk; Volatility States; Regime Switching; International Financial Markets; country effect; industry factor; industry state process; Stocks; Market capitalization; Stock markets; Public expenditure review; Time series analysis; Global; Europe
Cover IMF Working Papers
International Stock Returns and Market Integration: A Regional Perspective
Mr. Marco Del Negro
and
Mr. Robin Brooks
We investigate the relative importance of country and industry effects in international stock returns, with the innovation that we decompose country effects into region and within-region country effects. We divide the global stock market into the Americas, Asia, and Europe and find that most of the variation explained by country effects is actually due to region effects. Over time, these region effects have fallen. Within regions, however, only in Europe has segmentation declined, while it has increased elsewhere. Europe is also the only region where industry effects are now robustly more important than country effects.
Keywords:
WP; TMT firm; U.S. dollar; mean absolute deviations; dummy variable; stock portfolio; Diversification; risk; international financial markets; industrial structure; region effect; portfolio manager; Stock markets; Stocks; Market capitalization; Capital account; North American Free Trade Agreement; Europe; Global; Asia and Pacific; Western Europe; Southeast Asia