In the first half of 2022, Bitcoin lost over half its value, and the correlation with the stock market jumped to over 60%. These patterns are both remarkable and hard to explain. Why do monetary policy, the economy, or wars matter for the value of cryptocurrencies? Why do cryptocurrencies behave like tech stocks? From an… Read More »
Special Purpose Acquisition Company (SPAC) IPO volumes have surged in recent years (Figure 1). In 2020-2021, SPAC’s IPO volume reached more than $200 billion. Merging with a SPAC has become an important mechanism for private companies to go public. Since 2010, 417 SPACs have merged or announced a merger with private firms. These mergers created… Read More »
Companies today are facing unprecedented pressure to make progress on environmental, social, and governance (ESG) issues. The demand for companies to address these issues is not new, but a relatively recent development is that this demand now comes from investors, rather than activists or other stakeholders. The pressure from investors has caused many companies to… Read More »
Many of our most innovative companies that are household names started as venture capital (VC)-backed companies: Amazon, Google, Facebook, Airbnb, just to name a few. The lucky few startups that were able to raise money from VCs have changed our lives in significant ways—in how we obtain information, communicate with each other, and form relationships.… Read More »
The Australian Securities and Investments Commission (ASIC) is Australia’s corporate, financial services, and consumer credit regulator. A general description of ASIC is that it is responsible for corporate regulation, the regulation of financial markets and clearing and settlement facilities, the regulation of providers of financial services, and market integrity and consumer protection functions in connection… Read More »
Central banks around the world either have issued or are considering the issuance of a central bank digital currency (CBDC). While most modern transactions take place digitally, a CBDC differs from existing digital money such as bank deposits because a CBDC is a direct liability of the central bank, rather than of a commercial bank.… Read More »
Digitalization has significantly transformed the landscape of payment systems. With the advent of fintech and blockchain technology, domestic payment systems have become more inclusive, safe, and efficient. Despite the transformation at the national level, cross-border payments remain expensive, slow, and opaque and involve multi-dimensional challenges and complexities. With every cross-border payment, transactions must comply with… Read More »
Whether environmental, social, and governance (ESG) policies enhance shareholder value has been the subject of debate for decades. There are three views on ESG investments. The first view argues that ESG activities enhance shareholder value because they are productive investments in “reputation” or “goodwill” capital (hereafter as “goodwill capital” view). ESG activities reduce transaction costs… Read More »
In February 2022, Russia started a full-scale invasion of Ukraine, an event that would shake the global order. The war has already resulted in severe damages to Ukraine – thousands of killed civilians, more than 14 million of people displaced, and over $100 billion in infrastructure damage alone. Yet, the consequences of the war are… Read More »
“The major problem that I have is that even if they’re [ESG funds] marketed correctly, they actually have no demonstrable impact.”1 Tariq Fancy, the former head of BlackRock’s sustainable investing Flows into ESG mutual funds have increased markedly over recent years, raising the question of whether these capital flows lead to improved ESG policies in… Read More »
