Raymond Frenken

Central banks worldwide will need to face the fact that pressure on prices will remain high for the coming years and that inflation dynamics will continue to be clouded by uncertainty, Switzerland’s central bank chief has told his colleagues in Jackson Hole. The Swiss central bank also prides itself in working with a narrow mandate that is not influenced by political considerations.

A recent study conducted by Boston-based State Street has found evidence of “green shorting”,  a phenomenon in financial markets where investors borrow shares of companies with a weak sustainability profile and sell them in the hope they can buy them back cheaper when the price declines.

With a recession looming in Europe, investors again are on the lookout for suitable safe havens. Ethenea’s investment strategist Andrea Siviero, who manages the firm’s 60-million-euro Hesper Fund - Global Solutions together with Federico Frischknecht, believes the Swiss franc and the Japanese yen are well placed to take up this role, as the Fund has1a position in December 2023 Euribor futures that anticipates the ECB won’t be able to raise rates next year as much as currently discounted by the market.

Global asset managers are concerned that the European Union’s regime for corporate sustainability reporting does not fully match their needs and that it could risk making Europe less attractive for international investors as the rules remain to be aligned with an alternative international approach that is gaining traction in international accounting discussions in the IFRS community.

Manchester-based distressed debt trader Arrow Global Limited has announced it is opening an office in Luxembourg in order to benefit from the Grand Duchy’s position as a global investment fund hub and to put in place “the optimum infrastructure” to support investment strategies for its debt funds.

While closing the door on a seven-year era of negative interest rates with a larger than anticipated rate hike, the European Central Bank on Thursday committed itself to a more assertive defence of cohesion between the 19 economies that use the euro. President Christine Lagarde described the move as “a rather historical moment”. 

In the United Kingdom, the National Employment Savings Trust, known as Nest, is the country’s leading  defined contribution workplace pension scheme. It was set up to facilitate automatic enrolment as part of the government’s workplace pension reforms under the Pensions Act 2008. It has 11 million members with 24 billion pounds in assets under management.

“We are really strong advocates of stewardship,” said Nest CEO Helen Dean (pictured), speaking at a recent World Pensions Council conference in Paris.

Social responsibility, sustainability, ESG and SRI are more than buzzwords for the world’s leading pension funds. While some still question the current classifications, taxonomies and regulatory timelines, many of these major institutional investors see it as a way to provide stewardship, being a long-term stakeholder in society. “So are we going to be good ancestors? Or not?”

Pressed by persistently high inflation in the eurozone, the European Central Bank on Thursday may opt to double up on the 25 basis point rate hike that it has flagged already. Financial markets are increasingly bracing themselves for such a major increase, citing among others the euro’s recent weakness against the dollar.

A recent European Union agreement to crack down on the “wild west” in international crypto markets is “not a threat for the Luxembourg crypto market,” according to a senior official at international fund services firm Apex Group.

Representatives of the European Council and the EU parliament have reached a political agreement on the Markets in Crypto Assets proposal, known as MiCA, which covers issuers of unbacked crypto-assets, and so-called stablecoins, as well as the trading venues and the wallets where crypto-assets are held.