The Daily Brief We’re entering a New Era of Global Finance
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Jul 2, 2025 Explore the evolution of global finance post-2008, emphasizing the shift toward government bonds. Discover how non-bank financial institutions like pension funds are reshaping markets and blurring national borders. Delve into the intricate global financial connectivity where fund managers' moves resonate worldwide. Learn about the Indian pipes industry’s growth amid changing monetary policies and discover significant developments across various industries, including healthcare and technology.
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Global Finance's Structural Shift
- Global finance has fundamentally shifted since 2008, with focus moving from private lending to government bond financing.
- Non-bank financial institutions now dominate, managing huge global assets and causing financial shocks to transmit across borders faster.
FX Swaps Drive Global Investment
- FX swaps are crucial contracts allowing investors to hedge currency risk while investing internationally.
- This market is enormous, rolling over $111 trillion, and predominantly involves the US dollar.
Monetary Policy in a Connected World
- Financial conditions are now globally interconnected with policy effects crossing borders in multiple directions.
- Domestic monetary policy retains power but must consider global spillovers and coordination opportunities.