Reuters blog archive

from Global Investing:

A drop in the ocean or deluge to come?

Glass half full or half empty? For emerging markets watchers, it's still not clear.

Last month was a record one in terms of net outflow for funds dedicated to emerging equities, Boston-based agency EPFR Global said.  Debt funds meanwhile saw a $5.5 billion exodus in the week to June 26, the highest in history .

These sound like big numbers, but in fact they are relatively small. EM equity funds tracked by EPFR  have now reversed all the bumper year-to-date inflow registered by end-May, but what of all the flows they have received in the preceding boom decade?

Estimates are of over $8 trillion in flows to the developing world since 2004. And Benoit Anne, head of EM strategy at Societe Generale, points out that during the years of Fed money printing alone, emerging markets received $4.2 trillion, according to the Institute for International Finance. So really, not much has come out in the recent selloff. Depending on how you look at it, that's a  cause for cheer (a lot of the recent inflows consist of  "sticky" money and in for the long haul)  or cause for gloom (there's a lot more cash that could flee if sentiment gets worse) .

from Financial Regulatory Forum:

DAVOS-Capital inflows rebound to emerging markets – IIF

By Sven Egenter

ZURICH, Jan 26 (Reuters) - Private capital inflows to emerging markets are set to soar by two thirds this year as countries like Brazil and China drive global recovery and fuel "hot money" risks, the Institute of International Finance (IIF) said on Tuesday.

Emerging markets seemed to be aware of risks from short-term, yield-chasing cash inflows, the global banking association said. Mature economies need to come up with credible plans to tackle spiralling debt and liquidity, it said.

from MacroScope:

Trust us, we’re the bank

Josef Ackermann, Chairman of the Institute of International Finance and the head of Deutsche Bank, says he's confident leaders from around the world will take needed steps to bringing normality to the world's struggling financial system.

"I am pretty sure that the governments will guarantee parts of the whole sale funding and that should actually tell people that there is no risk and you don't lose money while investing in other banks and I think that is important," the head of Germany's largest bank said Sunday.

from MacroScope:

Shifting tides of confidence

Charles Dallara, managing director of the Institute of International Finance (IIF), a global association of financial firms, says the United States has larger worries than a weak U.S. dollar.

"The dollar is just a function I think now of the shifting tides of confidence in the system," Dallara tells Reuters.

from MacroScope:

Bankers, bailouts and laughs

Stocks are tumbling around the world and Mainstreet is feeling the crunch, but at the Institute of International Finance (IIF) luncheon it was hard to see the dark side past the luxurious chocolate mousse cake and keynote comedy.

Jacob Frenkel, the vice-chairman of American Internal Group (AIG) -- yes, that insurer on the receiving end of an $85 billion government bailout a few weeks ago (and now an extra $37.8 billion loan ), gave a light-hearted address on the G7's plan of action to combat the credit crisis.