Macroeconomics

World: Global debt hits $233 trillion record in Q3

Global debt rose to a record $233 trillion in the third quarter of 2017, more than $16 trillion higher from end-2016, according to an analysis by the Institute of International Finance. Private non-financial sector debt hit all-time highs in Canada, France, Hong Kong, South Korea, Switzerland and Turkey.

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Bank of England will allow EU Banks to operate as normal after Brexit

The Bank of England will allow European banks to continue selling their services in the UK without having to create expensive subsidiaries after Brexit, even if no divorce deal is struck between London and Brussels, the BBC reported.

The Bank of England will not force European-based investment banks to ringfence their capital and liquidity. It will mean EU banks operating through UK branches can continue without creating subsidiaries – where they are compelled to hold their own substantial reserves in the event of a financial shock, essentially becoming UK companies.

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Bank of Canada is considering creating a digital currency

Bank of Canada thinks now is a good time to research their own digital currency. Although the name remains unknown, they are not the first financial institution to contemplate such an approach.

Central bank digital currencies are a very unusual development in the financial sector. So far, no major bank has made any significant progress in developing such a currency. Bank of Canada may be the first to achieve some breakthrough in this regard. A paper has been circulating which focuses on creating a native digital currency.

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UK: OECD predicts weak economy due to Brexit

The Organisation for Economic Cooperation and Development on Tuesday issued a forecast for weak economic growth in the UK over the next two years that is worse than a much reduced estimate published last week by Britain’s fiscal watchdog.

The club of rich nations expects Britain’s economic growth to drop sharply from a rate of 1.5 per cent in 2017 – placing the UK at the bottom of the G7 group of countries – to 1.2 per cent in 2018 and 1.1 per cent in 2019.

“The growth slowdown is expected to continue through 2018, due to continuing uncertainty over the outcome of negotiations around the decision to leave the European Union and the impact of higher inflation on household purchasing power,” said the OECD, adding that there would be a “moderate” rise in the UK’s current 4.3 per cent unemployment rate.

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