Investment defined by economists

STUFF The Reserve Bank has made a big call about the price of bank safety. The Reserve Bank on Thursday demanded the big four Australian-owned banks find about another $20 billion to put into their businesses to reduce the risk of them failing in a crisis. ANZ, ASB, BNZ and Westpac will need to increase the amount of "tier one" capital they hold to 16 per cent of their risk-weighted assets, as the Reserve Bank had proposed during consultations. The Reserve Bank said that if average interest rates on loans went up 20 basis points by the time the rule change was fully implemented in 2027, that might mean a $5 increase in fortnightly payments on a $100,000, 30-year mortgage. The Reserve Bank said in its report into bank capital that a stronger banking system would mean New Zealand would be better able to survive large shocks. READ MORE:Bank safety to be boosted - now brace for the impactReserve Bank's '$20 billion' decision on bank capital may flow through to mortgage … [Read more...] about Three economists put themselves in Adrian Orr’s shoes

WASHINGTON (AP) — The nation’s business economists expect U.S. economic growth to decelerate this year and next but for the economy to avoid stumbling into recession, extending a record-breaking expansion already in its 11th year. The latest survey by 53 forecasters with the National Association for Business Economics shows that they expect economic growth to slow from 2.9% last year to 2.3% in 2019 and 1.8% in 2020. The forecasts are unchanged from the association’s previous survey in October. The economists put the odds of a recession starting at 5% this year, 21% in the first half of 2020 and 43% by the end of next year. However, they peg the odds of a recession by mid-2021 at 66%. The American economy is likely to remain resilient this year and next, they say, despite risks arising from President Donald Trump’s trade war with China and skirmishes with other U.S. trading partners: Half the respondents call trade tensions the No. 1 downside economic risk … [Read more...] about Business economists see US slowing but avoiding recession

“LABELLING BASED on incomplete information, public shaming, and shunning wrapped in moral rhetoric,” said Hester Peirce, a straight-talking commissioner at America’s main financial regulator, the Securities and Exchange Commission, in June. She was taking aim at the scoring systems that purport to assess firms’ performance based on environmental, social and governance (ESG) factors. Yet love them or hate them, ESG scores are becoming ever more important in the world of investing and capital markets. At least $3trn of institutional assets now track ESG scores, and the share is rising quickly. In America and Europe some politicians, bosses and investors want to shift away from measuring corporate performance based mainly on shareholder returns. Climate change is another catalyst. Christine Lagarde, the new head of the European Central Bank, thinks the institution should consider using monetary policy and bank supervision to fight climate change—a shift that … [Read more...] about Climate change has made ESG a force in investing

London (CNN Business)Happy Sunday. A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here. There's just one week to go before the United States is scheduled to impose a new round of tariffs on $156 billion of Chinese imports. Meanwhile, both sides are still working toward an elusive "phase one" trade deal that could bring some relief to battered global economies.  President Donald Trump said this week that it might be better to wait until after the 2020 US presidential election to strike a deal with China. That assessment came just a week after he said negotiations were in their "final throes." Investors should by now be wise to jawboning from the White House. Yet the consensus is that both countries are in fact moving toward a deal. Beijing offered a concession on Friday that may prove pivotal, pledging to reduce tariffs on US soybeans and pork.  "The deal is close. It's probably even closer than … [Read more...] about This is a crucial week for global trade

WASHINGTON (Reuters) - Friday’s booming U.S. jobs report should give the Federal Reserve all it needs to stick to its plan not to cut interest rates further in the near future, so when U.S. central bankers meet this week, most of the focus will be on their outlook for next year and beyond. FILE PHOTO: A man rides a bike in front of the Federal Reserve Board building on Constitution Avenue in Washington, U.S., March 27, 2019. REUTERS/Brendan McDermid/File Photo But here’s the rub: They often get it wrong. The coming year - with the added complications of an ongoing trade war and the U.S. presidential election - looks to be no exception. Alongside their interest-rate decision, Fed policymakers offer up economic and rate projections at every other meeting, and the next iteration of their so-called “dot plot” is due at the end of the two-day policy meeting on Wednesday. The Fed has made clear that it plans to stand pat on rates barring a … [Read more...] about As Fed reiterates rate pause, forecasts likely to be blown off course