Financial Futures Markets and Their Impact on the Real Economy in Middle and Low Income Countries

This project analyses the influence of the futures market on middle and low income countries. In it, I attempt to show that investments made by large investment funds in this market, as well as by certain pension plans, bring major consequences whose effects are more evident in less developed countries. The cornerstones of the work are as follows; to attempt to see the existing relationship between the commodity futures market and its underlying assets; analysing products such as wheat, rice and corn in-depth, because these are the most basic foodstuffs at a global level; to determine how an increase in trading in these markets can affect the lives of people in the poorest countries; to analyse investor concern regarding the consequences that their investments may have. Throughout the project we will see how large speculators use production forecasting models to determine the shortage of a commodity in order to take a position in the futures market to profit from it. In addition we will see how an increase in trading in this market causes an increase in the price of the underlying asset in the spot market. As for investor concern, I can say it is negligible, but the idea of running pension plans or investment funds that follow some social criteria has been welcomed by those interviewed, which makes me think that different legislation is possible. This legislation will only come into existence if it is demanded by the people. A fact that now becomes complicated because without a minimum financial basis, they cannot even know how the large investment funds trade with hunger in the world. The day when most people understand how large speculators profit from famine will be the day to put pressure on governments to begin to put limits on speculation. This makes financial awareness necessary in order to achieve a curb in excessive speculation.

Política africana de China: una manifestación de la real economy de corte chino

Desde el año 2000 el idilio China-África está marcado principalmente por un foro de cooperación, mecanismo de diálogo y cooperación colectiva ideado por China. Sin embargo, destaca que esta relación ha evolucionado en función de los intereses estratégicos de los chinos. China se inserta en los circuitos económico-comerciales africanos de manera metódica y decidida. A diferencia de sus competidores (Estados Unidos, Unión Europea, Canadá, Japón, etc.), que actúan en África de manera preferencial, China invierte en todos los países africanos sin ninguna excepción, sin importar su régimen político, su situación económico-financiera o su ubicación geográfica. Sin embargo, la voracidad energética china se ha vuelto objeto de preocupación en el Consejo de Seguridad de Naciones Unidas, sobre todo por su ofensiva por acaparar el mercado petrolero africano. Puede afirmarse que el actuar chino en África es una expresión de su pragmatismo económico-comercial, con efectos colaterales negativos para la integración y el desarrollo de África.-----Since 2000, the relationship between China and Africa is growing up because of the Forum on China-Africa Cooperation (FOCAC) which is a collective mechanism of dialogue and cooperation. Meanwhile, it’s important to mention that this relationship has increased regarding the Chinese strategic interests in Africa. China is getting inside the African economic and trade networks in a methodic and aggressive way. Differently from his competitors (USA, EU, Canada, Japan...) which only seem to use Africa, China invests in all the African countries without looking at their economical or financial situation, neither their geographical location. The energetical voracity of China has become a real issue at the United Nations Security Council, especially for the Chinese strike in the African petroleum market. For many reasons, we can affirm that the way China is acting in Africa is only the expression of its economical and trade pragmatism, which also has got negative results in the african development and integration process.

Finance and the real economy: issues and case studies in developing countries

Includes bibliography

Macroeconomic adjustments and the real economy in Korea and Malaysia since 1997

Includes bibliography

Transaction Banking: Respecting its role in the real economy. ECRI Policy Brief No. 6, 6 December 2013

This paper sketches the main features and issues related to recent market developments in global transaction banking (GTB), particularly in trade finance, cash management and correspondent banking. It describes the basic functioning of the GTB, its interaction with global financial markets and related implications of global regulatory developments such as Basel III. The interest in GTB has recently increased, since its low-risk profile, tendency to follow growth rates worldwide and relative independence from other financial instruments became an interesting diversification opportunity both for banks’ business models and for investors. Transaction banking has been a resilient business during the crisis, despite the reduction in world trade figures. In the post crisis period, GTB must cope with new challenges related to increased local and global regulation and the risk of inconsistency in regulatory approaches, which could negatively impact the global network and increased competition by new market entrants. Increased sophistication of corporate clients, as well as the pressure to develop and adopt technological innovations more quickly than other areas of banking continues to impact the business. The future of the industry closely depends on its ability to adjust to complex regulatory developments while at the same time being able to operate a global and efficient network.

Money, Finance and the Real Economy: What went wrong? CEPS Paperback, 17 March 2015

The functions of the financial system of a developed economy are often badly understood. This can largely be attributed to free-market ideology, which has spread the belief that leaving finance to its own devices would provide the best possible mechanism for allocating savings. The latest financial crisis has sparked the beginnings of a new awareness on this point, but it is far from having led to an improved understanding of the role of the financial institutions. For many people, finance remains more an enemy to be resisted than an instrument to be intelligently exploited. Its institutions, which issue and circulate money, play an important role in the working of the real economy that it would be imprudent to neglect. The allocation of savings, but also the level of activity and the growth rate depend on it. In this book, the authors carefully analyse the close links between money, finance and the real economy. In the process, they show why today the existence of a substantial potential of saving, instead of being an opportunity for the world economy, could threaten it with ‘secular stagnation’.

Importância das Servidões Militares Aeronáuticas e o seu Impacto na Economia Real

As Servidões Militares Aeronáuticas (SMA) pressupõem restrições que lhes são intrínsecas, suscetíveis de impactar na Economia Real Portuguesa (ERP). Na Força Aérea (FA) as SMA denotam especial importância, em razão das constantes evolução e atualização das Operações Aéreas e tramitação legal imposta, com vista a uma minimização dos encargos restritivos dos bens que, territorialmente, lhes estão associados. Assim, salienta-se a pertinência das SMA enquanto processo que tem reflexos na ERP, uma vez serem utilizadas pela FA no processo de Licenciamento Urbano. Desta feita, foi avaliada a importância das SMA na FA, através de estudo de caso, utilizando um raciocínio hipotético-dedutivo, o qual norteou as entrevistas semiestruturadas, conceptualizadas no respetivo mapa. Estas entrevistas permitiram verificar que: a FA elabora as SMA segundo pressupostos reais e atualizados; a FA emite pareceres positivos relativos aos pedidos de licenciamento que estejam de acordo com o preconizado nos Decreto-Lei das SMA vigentes e nas respetivas áreas territoriais de aplicação; os processos de emissão de pareceres na FA podem ser melhorados concluindo-se, assim, que o processo de conceção das SMA na FA influencia o desenvolvimento da ERP. Abstract: It is assumed that the Aeronautical Control of Obstacles (ACO) imposes certain inner limitations that are susceptible to cause impact on the Portuguese Real Economy (PRE). The ACO area is of special relevance for the Portuguese Air Force (PoAF) due to the permanent evolution and update of the Air Operations and the legal procedures aimed at the decrease of the property limitations associated to them. The ACO is, therefore, of the utmost importance, considering that its process has a significant impact on PRE because of its use by the PoAF within the Building Control process. The scope of this research lies on the importance of the ACO for the PoAF. The research is based on the case study method and the hypothetical-deductive reasoning which set the guidelines for the semi-structured interviews within the conceptual framework, which made possible to verify the PoAF: develops the ACO according to real and updated assumptions; issues positive official assessments to the requests for building licensing that comply with the ACO Legal Decrees within its territorial area of applicability; process of issuing official assessments may be improved, concluding that the development of the ACO within the PoAF influences the development of the PRE.

Systematic liquidity: commonality and inter-temporal variation in the Portuguese stock market

[EN] The aim of this paper is to study systematic liquidity at the Euronext Lisbon Stock Exchange. The motivation for this research is provided by the growing interest in financial literature about stock liquidity and the implications of commonality in liquidity for asset pricing since it could represent a source of non-diversifiable risk. Namely, it is analysed whether there exist common factors that drive the variation in individual stock liquidity and the causes of the inter-temporal variation of aggregate liquidity. Monthly data for the period between January 1988 and December 2011 is used to compute some of the most used proxies for liquidity: bid-ask spreads, turnover rate, trading volume, proportion of zero returns and the illiquidity ratio. Following Chordia et al. (2000) methodology, some evidence of commonality in liquidity is found in the Portuguese stock market when the proportion of zero returns is used as a measure of liquidity. In relation to the factors that drive the inter-temporal variation of the Portuguese stock market liquidity, the results obtained within a VAR framework suggest that changes in real economy activity, monetary policy (proxied by changes in monetary aggregate M1) and stock market returns play an important role as determinants of commonality in liquidity.

The real impact of stock market mispricing — evidence from Australia

Using a large panel of Australian firms, we investigate if mispricing in the stock market has an impact on firm-level investment. A significantly positive relation is documented between investment and theproxies for mispricing, suggesting that overpriced (underpriced) firms tend to overinvest (underinvest). Furthermore, we find that equity-dependent firms display a more pronounced sensitivity of investment to stock misvaluation than do nonequity-dependent firms. Taken together, our findings evidence that mispricing in Australian capital markets may have significant influence on the real economy, and the influence works though an equity-financing channel.© 2007 Elsevier B.V. All rights reserved.

Social justice and high-quality human services : visioning the place of a contemporary professional association

The current world situation is plagued by “wicked problems” and a widespread sense of “things are going to get worse”. We confront the almost imponderable consequences of global habitat destruction and climate change, as well as the meltdown of the financial markets with their largely yet to be seen damage to the “real economy”. These things will have considerable negative impacts on the social system and people's lives, particularly the disadvantaged and socially excluded, and require innovative policy and program responses delivered by caring, intelligent, and committed practitioners. These gargantuan issues put into perspective the difficulties that confront social, welfare, and community work today. Yet, in times of trouble, social work and human services tend to do well. For example, although Australian Social Workers and Welfare and Community Workers have experienced phenomenal job growth over the past 5 years, they also have good prospects for future growth and above average salaries in the seventh and sixth deciles, respectively (Department of Education, Employment and Workplace Relations, 2008). I aim to examine the host of reasons why the pursuit of social justice and high-quality human services is difficult to attain in today's world and then consider how the broadly defined profession of social welfare practitioners may collectively take action to (a) respond in ways that reassert our role in compassionately assisting the downtrodden and (b) reclaim the capacity to be a significant body of professional expertise driving social policy and programs. For too long social work has responded to the wider factors it confronts through a combination of ignoring them, critiquing from a distance, and concentrating on the job at hand and our day-to-day responsibilities. Unfortunately, “holding the line” has proved futile and, little by little, the broad social mandate and role of social welfare has altered until, currently, most social programs entail significant social surveillance of troublesome or dangerous groups, rather than assistance. At times it almost seems like the word “help” has been lost in the political and managerial lexicon, replaced by “manage” and “control”. Our values, beliefs, and ethics are under real threat as guiding principles for social programs.

Corporate Governance in European Banks: Essays on Bank Ownership

Banks are important as they have a central role in the financial system, where funds are channelled either through financial intermediaries, such as banks, or through financial markets, hence promoting growth in any economy. Recently, we have been reminded of the drawbacks of the central role of banks. The current financial crisis, which started out as a sub-prime mortgage crisis in the US, has become a global financial crisis with substantial impact on the real economy in many countries. Some of the roots to the current financial crisis can be sought in the changing role of banks and in bank corporate governance. Moreover, the substantial revitalising measures taken have been justified by the central role of banks. Not only are banks important, they are also very special. The fact that banks are regulated in conjunction with greater opacity, make bank corporate governance different from corporate governance in non-bank companies. Surprisingly little is, however, known about bank corporate governance, in particularly, in a European setting. Hence, the objective of this doctoral thesis is to provide new insights in this research area by examining banks from 37 different European countries. Each of the three essays included in the doctoral thesis examines a particular aspect of bank corporate governance. In the first essay the interaction between the regulatory environment a bank operates in and its ownership structure is explored. Indicators of the severity of the moral hazard problem induced by the deposit insurance system and implicit too-big-to-fail government guarantee, particular features of deposit insurance systems as well as legal protection of shareholders, legal origin of a country and level of integration to the European community are used in the analysis. The empirical findings confirm previous findings on the link between legal protection of shareholders and ownership structure. Moreover, they show that differences in deposit insurance system features can explain some of the differences in ownership structure across European banks. In the second essay the impact of management and board ownership on the profitability of banks with different strategy is examined. The empirical findings suggest that the efficiency of these two particular corporate governance mechanisms varies with the characteristics of the agency problem faced by the bank. More specifically, management ownership is important in opaque non-traditional banks, whereas board ownership is important in traditional banks, where deposit insurance reduces the monitoring incentives of outsiders. The higher profitability does, however, go together with higher risk. In the third essay the profitability and risk of commercial, savings and cooperative banks are compared. The empirical findings suggest that distinct operational and ownership characteristics rather than only the mere fact that a bank is a commercial, savings or cooperative bank explain the profitability and risk differences. The main insight from the three essays is that a number of different aspects should be addressed simultaneously in order to give the complexity of bank corporate governance justice.

Hacia una economía holográfica. Una revisión de la ciencia económica a partir de la ontoepistemología oriental

363 p.

Perceptions and reality: Economic voting at the 2004 European Parliament elections

One of the most influential explanations of voting behaviour is based on economic factors: when the economy is doing well, voters reward the incumbent government and when the economy is doing badly, voters punish the incumbent. This reward-punishment model is thought to be particularly appropriate at second order contests such as European Parliament elections. Yet operationalising this economic voting model using citizens' perceptions of economic performance may suffer from endogeneity problems if citizens' perceptions are in fact a function of their party preferences rather than being a cause of their party preferences. Thus, this article models a 'strict' version of economic voting in which they purge citizens' economic perceptions of partisan effects and only use as a predictor of voting that portion of citizens' economic perceptions that is caused by the real world economy. Using data on voting at the 2004 European Parliament elections for 23 European Union electorates, the article finds some, but limited, evidence for economic voting that is dependent on both voter sophistication and clarity of responsibility for the economy within any country. First, only politically sophisticated voters' subjective economic assessments are in fact grounded in economic reality. Second, the portion of subjective economic assessments that is a function of the real world economy is a significant predictor of voting only in single party government contexts where there can be a clear attribution of responsibility. For coalition government contexts, the article finds essentially no impact of the real economy via economic perceptions on vote choice, at least at European Parliament elections.

Italy's got talent. How Italian leading companies in confectionery industry overcame the crisis

The crisis that spread worldwide since 2007 started from the financial sector and ended to affect also real economy. This process has attracted the attention of many scholars seeking to study its causes and impacts. Notwithstanding many works on this topic, the impact of the crisis on specific industries is still rather unexplored. The present work seeks to address this issue by analyzing the confectionery industry, with particular emphasis for Italian market leaders, Ferrero S.p.A. and Perfetti Van Melle S.r.l.. The aim of the study is to assess if they have been successful in tackling the crisis, keeping a satisfactory level of profitability associated to a good financial health notwithstanding ongoing difficulties. Moreover, we seek to analyze the strategies the companies employed to survive the crisis. The concern of the paper is both quantitative and qualitative. Thus, we calculated a complete set of indicators using a specific methodology for financial statement analysis which has been conceived especially for studying Italian firms; these data have been integrated with other information retrieved from the annual reports of the companies (especially the notes to the accounts and the directors’ report). The analysis highlights that both the firms benefit from a good financial health, with Perfetti Van Melle presenting a large amount of liquidity. On the contrary, liquidity should be the main concern of Ferrero because of an excessive reliance on current liabilities. Both the firms have a good level of profitability, even if Perfetti Van Melle’s one is decreasing. The key-strategies for the success of these firms are ongoing investments in state-of-the-art plant and machinery, an increasing use of equity as the main source of funding, along with huge investments in research and advertising.

Capital Markets Union and ending short-termism: lessons from the European Commission's public consultation

The European Commission’s initiative to establish a Capital Markets Union is in sharp conflict with the more radical goals of downsizing significantly certain financial activities and firms that have become too-big-to-fail and too-big-to-govern and of ending or at least drastically limiting extreme speculation and short-termism in finance and the real economy in order to increase financial stability. The recent public consultation on the Commission’s Green Paper Building a Capital Markets Union gives evidence of how weak such demands are compared to calls for deeper capital markets with more ‘shadow banking’ and rebuilding (sound) securitisation. The consultation is an example of how framing the problem and the refined better regulation agenda influence post-crisis financial reregulation and help to marginalize more radical ideas demanding a return to a more traditional banking model and transforming finance back to serving the real economy.