The impact of sovereign wealth funds on global financial markets

This paper analyses the impact of sovereign wealth funds (SWFs) on global financial markets. It presents back-of-the-envelope calculations which simulate the potential impact of a transfer of traditional foreign exchange reserves to SWFs on global capital flows. If SWFs behave as CAPM-type investors and thus allocate foreign assets according to market capitalisation rather than liquidity considerations, official portfolios reduce their “bias” towards the major reserve currencies. As a result, more capital flows “downhill” from rich to less wealthy economies, in line with standard neoclassical predictions. More specifically, it is found that under the assumption of SWFs investing according to market capitalisation weights, the euro area and the United States could be subject to net capital outflows while Japan and the emerging markets would attract net capital inflows. It is also shown that these findings are sensitive to alternative assumptions for the portfolio objectives of SWFs. Finally, the paper discusses whether a change in net capital flows triggered by SWFs could have an impact on stock prices and bond yields. Based on an event study approach, no evidence can be found for a stock price impact of non-commercially motivated stock sales by Norway’s Government Pension Fund. JEL Classification: F30, F40, G15.Sovereign wealth funds, capital flows, foreign exchange reserves, financial markets.

Structural issues in the Kenyan financial system: improving competition and access

Although by regional standards, Kenya's financial system is relatively well developed and diversified, major structural impediments prevent it from reaching its full potential. Crosscountry comparisons, however, show the importance of a well-developed financial sector for long-term economic growth and poverty alleviation. Experience from other developing economies has shown the detrimental effect of government ownership and the positive impact that foreign bank ownership can have on the development of a market-based financial system. Analyzing and decomposing the high interest rate spreads and margins in Kenya helps identify structural impediments that drive the high cost of and low access to financial services. The limited information sharing on debtors, deficiencies in the legal and judicial system, the limited number of strong and reputable banks and non-transparency and uncertainty in the banking market are major impediments to the development of Kenya's financial system, to reducing spreads and to widening access.Financial Intermediation,Payment Systems&Infrastructure,Financial Crisis Management&Restructuring,Banks&Banking Reform,Economic Theory&Research,Financial Intermediation,Financial Crisis Management&Restructuring,Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research

Wait-and-see strategies in polling models

We consider a general polling model with $N$ stations. The stations are served exhaustively and in cyclic order. Once a station queue falls empty, the server does not immediately switch to the next station. Rather, it waits at the station for the possible arrival of new work ("wait-and-see") and, in the case of this happening, it restarts service in an exhaustive fashion. The total time the server waits idly is set to be a fixed, deterministic parameter for each station. Switchover times and service times are allowed to follow some general distribution, respectively. In some cases, which can be characterised, this strategy yields strictly lower average queueing delay than for the exhaustive strategy, which corresponds to setting the "wait-and-see credit" equal to zero for all stations. This extends results of Pek\"oz (Probability in the Engineering and Informational Sciences 13 (1999)) and of Boxma et al. (Annals of Operations Research 112 (2002)). Furthermore, we give a lower bound for the delay for {\it all} strategies that allow the server to wait at the stations even though no work is present.Comment: 24p, submitte

Comparison between the forces and moments applied on the residuum of above-knee amputees during daily life activities and walking

N/

Finance in Africa - Achievements and Challenges

In spite of shallow financial markets, Sub-Saharan Africa will not escape the repercussions of the global financial crisis. The global turmoil threatens the progress Sub-Saharan Africa has made in financial sector deepening and broadening over the recent years and underlines the importance of continuing and deepening the necessary institutional reforms. In this context it is important to define the role of government in expanding financial sectors in a sustainable and market-friendly manner. Foreign banks have brought more benefits than risks for their host economies in Sub-Saharan Africa, but are certainly not a panacea and not a substitute for institutional and policy reform. The profile of foreign banks, however, has changed, with more and more regional banks emerging. This trend toward regional integration is promising as it might allow the small African financial system to reap benefits from scale economies, but it also requires regulatory and supervisory improvements and coordination across the region.Banks&Banking Reform,Debt Markets,Access to Finance,,Emerging Markets

In memoriam Michio OKA : Erinnerung an meinen Freund

この論文は国立情報学研究所の学術雑誌公開支援事業により電子化されました