The SVB failure was caused by poor risk management choices but also highlights banks’ general macro-financial challenges from restrictive monetary policy, which essentially removes diversification.
Global Working Capital Requirements (WCR) for listed companies increased by +9 days to 72 days of turnover in 2022 – the largest annual increase since 2008. Day Sales Outstanding (DSO) and Days Inventories Outstanding (DIO) equally contributed to the annual rise in WCR. In a context of slowing economic activity, oversupply in manufacturing sectors and tightening financial conditions, inventories are likely to decrease while payment delays should increase as in previous economic downturns.
Despite a general business deterioration in Q4, 2022 was a strong year overall for corporate earnings. Global revenues jumped by +11.7% y/y and earnings per share (EPS) by +4.3% y/y. 15 out of 23 sectors reported growth for both revenues and EPS, with oil & gas, transportation and hospitality being the biggest winners of the year.
Since 2014, asset purchases and targeted longer-term refinancing operations (TLTROs) have been the two main planks of quantitative easing (QE) in the Eurozone. The ECB’s asset purchases led to a significant compression of term spreads, easing financing conditions in the effort to lift inflation to the price stability target.
In the EU, women get paid 13% less than men in terms of average gross hourly earnings. Although this is smaller than the global gender pay gap (20% according to the ILO), it does not necessarily reflect more gender equality; for some countries, it merely depicts lower participation rates in paid employment.
Biodiversity loss is both a risk and an opportunity for the financial sector. Financial institutions may face financial, market, reputational and legal risks when they invest in economic activities that cause adverse effects on biodiversity or are highly dependent on natural capital.
.jpg)
