How Currency Movements Can Affect Your Iinvestments
TISA, the investments and savings membership organisation, has today launched its framework for Target Market Reporting for financial instrument supply chains, in-line with MiFID II requirements. It has also endorsed the European MiFID II Template (EMT), as produced by the European Working Group. Brexit could also prompt the ECB to renew its call for clearing houses handling more than 5 per cent of the market in a euro-denominated product to be based in the Eurozone. The ECB’s proposal was the subject of a ruling of the EU General Court in March 2015, which found that the ECB did not have the competence necessary to regulate the activity of security clearing systems”. This could well change following Brexit, and if such a proposal were successful it could affect the future business prospects of UK-based clearing houses and potentially force them to set up in the Eurozone in order to remain a viable option for the clearing of certain products.
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Some governments, and some companies, offer inflation-linked bonds. The coupon payments are linked to a particular inflation rate and so may rise. The pay-off is that the payments tend to be lower than would be available on traditional bonds. Examples of this include TIPS” in the US (Treasury Inflation Protected Securities) or index-linked gilts in the UK, often called linkers”.
Basel Committee proposes streamlined stress testing principles. The Basel Committee requested comments on a consultative document that proposes to streamline the existing set of stress testing principles by stating them at a high enough level to be applicable across many banks and jurisdictions and remain relevant as stress testing practices continue to develop. Comments are due on or before March 23, 2018.
Without inflation adjustments, cost of living would continue to rise but the purchasing power of this pension would fall – essentially eroded by inflation. Imagine if there were no inflation adjustments during retirement to help offset increases in the cost of living! Your pension would buy fewer and fewer goods and services with each passing year. This is a reality for many retirees without well-managed workplace pension plans, and it is very disturbing.