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    mutual funds raised holdings in public sector banks by 9% to 30% in the september quarter. which of these could be the reason?


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    get mutual funds raised holdings in public sector banks by 9% to 30% in the september quarter. which of these could be the reason? from screen.

    Funds flock to PSBs on loan surge, valuations

    HNIs were first to take note; the trend has spread to MFs, retail investors

    Funds flock to PSBs on loan surge, valuations

    2 min read . Updated: 20 Nov 2022, 11:25 PM IST

    Ram Sahgal


    Outstanding bank credit hit record ₹129 tn in the fortnight ended 21 October. Mint

    HNIs were first to take note; the trend has spread to MFs, retail investors

    स्रोत : www.livemint.com

    Coronavirus (COVID

    This note is developed by the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE). It examines how SMEs are likely to be affected by the current coronavirus epidemic, reports on early evidence and estimates about the impact, and provides a preliminary inventory of country responses to foster SME resilience.


    This note discusses how SMEs are affected by the current COVID-19 pandemic, reports on early evidence and estimates about the impact, and provides an inventory of country responses to foster SME resilience.


    This note has been prepared by the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE) for discussion by the OECD Working Party on SMEs and Entrepreneurship (WPSMEE). The WPSMEE conducts analysis and provides evidence based guidance for the design and implementation of SME policies. It also serves as an important repository of SME policy responses in times of crisis.

    This note discusses how SMEs are affected by the current COVID-19 pandemic, reports on early evidence and estimates about the impact, and provides an inventory of policy responses to foster SME resilience in 60 countries. Given the rapid pace of developments, the overview of country responses is not comprehensive and in some cases includes intended policy responses that are still a work in progress, or simply at the stage of public announcements. This note is the sixth update of SME policy responses since early March 2020. Compared to the previous update, latest forecasts show an increasingly negative impact of the pandemic on global GDP growth. At the same time, whereas surveys since February show that SMEs and entrepreneurs are extremely worried about the impact of COVID-19 on their liquidity position and business survival, the most recent business surveys show some confidence improvements, possibly related to the significant policy efforts to address the SME liquidity gap and the lifting of lockdown measures in a number of countries. In this context, the policy perspective is gradually shifting from liquidity support measures for SME survival, which still remains a priority in most countries, to support for recovery.1

    Chapter 2 discusses the background to SME impact and policy responses, including the most recent forecasts on the impact of COVID-19. Chapter 3 has been significantly updated, and discusses the increasing evidence on the impact on SMEs from over 40 surveys among SMEs world-wide and a growing body of economic analysis. Chapter 4 includes the synthesised analysis of country SME policy approaches. Annex 1.A. presents the overview of country SME policy responses, with further detailed information on the measures.2 Annex 1.B. provides an overview of survey results on the impact of COVID-19 on SMEs.


    The coronavirus pandemic is causing large-scale loss of life and severe human suffering globally. It is the largest public health crisis in living memory, which has also generated a major economic crisis, with a halt in production in affected countries, a collapse in consumption and confidence, and stock exchanges responding negatively to heightened uncertainties.3 While world-wide, the number of COVID-19 continues to increase at the time of writing of this report, in a number of OECD countries cases are diminishing, and lockdown and containment measures are gradually being lifted.

    Economic forecasts issued over April-June 2020 depict an increasingly negative outlook in terms of the scale of the global economic recession triggered by the pandemic. In its June 2020 Economic Outlook, the OECD projected a 6% drop in global GDP, and a 7.6% fall in case of a second pandemic wave by end 2020, with a double digit decline in some of the most hit countries, followed by a modest recovery of 2.8% in 2021 (OECD, 2020[1]). This follows a forecast in late March, which indicated that the initial direct impact of the shutdowns could be a decline in the level of output of between one-fifth to one-quarter in many economies, with consumers’ expenditure potentially dropping by around one-third (OECD, 2020[2]).

    In recent weeks, several other international organisations have issued forecasts on aspects of the economic impact of the coronavirus pandemic. The IMF June 2020 Economic Outlook Update projects a decline in global GDP by 4.9 percent in 2020, 1.9 percentage points below the April forecast, followed by a partial recovery, with growth at 5.4 percent in 2021 (IMF, 2020[3]). The June 2020 World Investment Report (Unctad, 2020[4]) forecasts a decline in global foreign investment by up to 40% in 2020, with a further decrease by 5-10% in 2021. The ILO estimates the impact of COVID-19 to result in a rise in global unemployment of between 5.3 million (“low” scenario) and 24.7 million (“high” scenario), signalling that ‘sustaining business operations will be particularly difficult for Small and Medium Enterprises (SMEs)’ (ILO, 2020[5]). The WTO reported a decline in the volume of global merchandise trade in Q1 2020 by 3% year-on-year, and expects an unpresented decline in Q2 of 18.5%, potentially leading to a drop of 32% over 2020.4

    Impact on SMEs

    Transmission channels

    There are several ways the coronavirus pandemic affects the economy, especially SMEs, on both the supply and demand sides. On the supply side, companies experience a reduction in the supply of labour, as workers are unwell or need to look after children or other dependents while schools are closed and movements of people are restricted. Measures to contain the disease by lockdowns and quarantines lead to further and more severe drops in capacity utilisation. Furthermore, supply chains are interrupted leading to shortages of parts and intermediate goods.

    On the demand side, a dramatic and sudden loss of demand and revenue for SMEs severely affects their ability to function, and/or causes severe liquidity shortages. Furthermore, consumers experience loss of income, fear of contagion and heightened uncertainty, which in turn reduces spending and consumption. These effects are compounded because workers are laid off and firms are not able to pay salaries. Some sectors, such as tourism and transportation, are particularly affected, also contributing to reduced business and consumer confidence. More generally, SMEs are likely to be more vulnerable to ‘social distancing’ than other companies.5

    स्रोत : www.oecd.org

    Financial System Review—2022

    The Canadian financial system remains resilient, but vulnerabilities have become more complex and risks have grown. The Bank is carefully watching households’ high levels of mortgage debt, as well as the risks associated with a price correction in Canada’s housing market.

    Financial System Review—2022

    Tiff Macklem, Carolyn Rogers, Timothy Lane, Lawrence L. Schembri, Paul Beaudry, Toni Gravelle, Sharon Kozicki

    A stable and efficient financial system is essential for sustaining economic growth and raising living standards. In the Financial System Review, the Bank of Canada identifies the main vulnerabilities for and risks in the financial system in Canada and explain how they have evolved over the past year.

    The Financial System Review is a product of the Governing Council of the Bank of Canada: Tiff Macklem, Carolyn Rogers, Timothy Lane, Lawrence Schembri, Paul Beaudry, Toni Gravelle and Sharon Kozicki.


    The Canadian financial system has proved resilient throughout the COVID‑19 pandemic, and the balance sheets of businesses and households are generally in good shape. However, in an environment of tightening financial conditions, high global inflation and increased geopolitical tensions, financial system vulnerabilities have become more complex, and risks have become more elevated.

    The Bank is paying particular attention to the fact that a greater number of Canadian households are carrying high levels of mortgage debt. These households are more vulnerable to declines in income and rising interest rates. While the sharp increase in house prices over the past year has resulted in significant equity gains for many households, those who entered the housing market in the last year or so would be more exposed in the event of a significant price correction.

    The vulnerabilities highlighted in this report suggest the effects for the real economy could be significant if a trigger event occurs, even as systemically important financial institutions remain resilient.

    What you need to know about the Bank of Canada’s latest assessment of vulnerabilities and risks to Canada’s financial system – in brief.

    Key messages

    Central banks around the world have shifted their focus from providing pandemic-related stimulus to responding to the significant increase in inflation. The lasting effects of the pandemic on supply chains in the context of strong demand for goods and the ongoing Russian invasion of Ukraine are complicating these efforts. The tightening of monetary policy globally will test the resilience of the financial system and could worsen existing financial vulnerabilities.

    In Canada, elevated levels of household debt and high house prices remain two key interconnected vulnerabilities. Many households have seen an improvement of their net worth and liquid asset holdings over the course of the pandemic. At the same time, the share of highly indebted households has risen. Those with high debt are more vulnerable to a decline in income and will face more financial strain when they renew their mortgages at higher rates.

    House prices rose more than 50%, on average, during the pandemic. Expectations of future price increases and increased investor demand likely contributed to this rise. A moderation of housing markets could reverse these forces and amplify the decline in prices. Significant drops in prices would reduce household wealth and access to credit.

    Publicly traded non-financial businesses are generally in good financial shape and appear well-positioned to handle higher interest rates. Previously, concerns were that the pandemic would cause unsustainably high levels of debt across the non-financial sector. But this has not occurred. The vulnerability associated with the reliance of some businesses on high-yield debt markets has also diminished.

    Fragile liquidity in fixed-income markets is an ongoing structural vulnerability. A sudden spike in demand for liquidity from asset managers could exceed the willingness of banks to supply such liquidity, causing large price movements and a potential freeze in some markets. The recent tightening in financial conditions and increased market volatility have reduced liquidity.

    Cyber threats represent a continued vulnerability given the interconnected nature of the financial system. With the ongoing war in Ukraine, state-sponsored cyber attacks are occurring with greater frequency and sophistication, increasing the risk of a successful attack on a Canadian financial institution or financial market infrastructure. Such an attack could have far-reaching effects on the broader financial system.

    The war in Europe has further complicated the transition to a low-carbon economy. In the short term, concerns around global energy security are likely to delay the transition, while the long-term impact is highly uncertain. Overall, the risk of a quick repricing of assets exposed to climate change has increased.

    Cryptoasset markets continue to evolve and grow rapidly, and price volatility remains high. While they do not yet pose a systemic risk to the Canadian financial system, the lack of a regulatory framework means they operate without many of the safeguards that exist in the traditional financial system. This exposes investors to risks such as large and sudden financial losses due to fraud, price declines or a run on stablecoins.

    Global macrofinancial conditions

    As the global economy emerges from the COVID‑19 pandemic, several factors have combined to increase volatility in financial markets and reduce investors’ appetites for risky assets. Amid rising global inflationary pressures, major central banks have entered a phase of monetary policy tightening. At the same time, Russia’s invasion of Ukraine has increased volatility in commodity markets and uncertainty more generally, causing significant repricing in some financial markets as investors seek safer assets. The tightening of global financial conditions could more clearly expose existing financial vulnerabilities and will test the resilience of the global financial system. New outbreaks of COVID‑19 in China and associated lockdowns are another source of concern for the global economy and inflation.

    स्रोत : www.bankofcanada.ca

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