Transcript Global environment - Financial Stability Report

Part A:
Global environment
Chart A.1 Greek government bond spreads have risen sharply
Selected ten-year government bond spreads to German bunds(a)
Sources: Thomson Reuters Datastream and Bank calculations.
(a) Data up to 29 June.
(b) Greek Prime Minister Samaras announces early elections.
(c) Syriza wins election.
Chart A.2 Growth in EMEs has continued to moderate
EME annual GDP growth
Source: IMF World Economic Outlook (April 2015).
Chart A.3 Capital inflows to EMEs have moderated
EME GDP growth and capital inflows(a)
Source: IIF.
(a) Four-quarter moving averages.
Chart A.4 Issuance of dollar-denominated debt securities by EMEs has
been strong
Annual net issuance of debt by EME borrowers
Sources: Dealogic and Bank calculations.
(a) Includes public and private sector banks.
(b) Non-financial corporates consists of non-financial public and private sector firms and finance vehicles of industrial and utility firms.
Chart A.5 Private sector indebtedness has risen since 2007
Non-bank private sector credit to GDP
Sources: BIS, IMF (International Financial Statistics and World Economic Outlook) and Bank calculations.
(a) Outstanding domestic and international debt securities on a residency basis. Domestic debt securities data for India and Saudi Arabia are not available.
(b) 2007 bars are based on the same data as 2014 but are coloured grey for ease of read.
Chart A.6 Normalisation of US monetary policy has been associated
with an increase in incidences of EME crises
US policy rate and incidences of EME crises
Sources: Laeven, L and Valencia, F (2012), ‘Systemic banking crises database: an update’, Thomson Reuters Datastream and Bank calculations.
(a) Data up to 2011.
Chart A.7 The US dollar has appreciated against a basket of currencies
Nominal effective exchange rates
Sources: BIS, IMF World Economic Outlook (April 2015) and Bank calculations.
(a) Weighted by annual GDP.
Chart A.8 EME bond yields have become more volatile over the past
year
Option-adjusted spreads on selected bond indices
Source: BofA Merrill Lynch Global Research.
(a) High Yield USD EM Liquid Corporate Plus Index.
(b) US High Yield Master II Index.
(c) BBB USD EM Sovereign Index.
Chart A.9 UK banks have significant exposures to Emerging Asia and
Latin America
Major advanced economies’ bank claims on EMEs(a)
Sources: BIS Consolidated Banking Statistics, SNL Financial and Bank calculations.
(a) Foreign claims of domestically owned banks on an ultimate risk basis, as at 2014 Q4. CET1 capital as at 2014 H2, with the exception of Japan, where it is as at 2014 H1.