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Eurozone Inflation Picks Up Pace in Blow to Rate-Cut Hopes global.abi.org Wed, 07/31/2024 - 21:40 Inflation unexpectedly heated up in the eurozone this month, presenting a fresh challenge to policymakers looking for signs that eurozone price rises are easing sustainably, the Wall Street Journal reported. Consumer prices were 2.6% higher on year in July, picking up pace from in June, according to EU figures released Wednesday. That defied economists’ expectations for a slight decrease in inflation over the month, and leaves the rate further from the European Central Bank’s elusive 2% target. Inflation heated up over the month in Germany, France and Italy, the eurozone’s three largest economies. Core inflation, which strips out the often volatile effects of food and energy prices, meanwhile stayed stable, against expectations for a slight decrease. But services, a key focus for policymakers at the European Central Bank, did fall slightly. That decline makes a cut to interest rates the most likely outcome in September, said Franziska Palmas, an economist at Capital Economics. Still, the higher headline rate may give pause to the central bank as it mulls its next steps on the direction of interest rates in the 20-member eurozone. Read more. (Subscription required.) Location Europe

Ethiopia Needs $3.5 Billion Debt Relief Through 2028, IMF Says global.abi.org Wed, 07/31/2024 - 21:39 Ethiopia needs about $3.5 billion in relief from debt restructuring through 2027-28, according to the International Monetary Fund, setting the key parameters for creditors to negotiate deals with the government, Bloomberg News reported. Overall, Africa’s second-most populous nation faces a financing gap of more than $20 billion over the period, the Washington-based lender said this week in a report outlining its $3.4 billion economic program. That reduces to $10.7 billion after actions including proceeds from privatization processes and an existing debt suspension with creditors, it said. The residual financing gap and the contribution required from debt restructuring are both about $1 billion less than a preliminary estimate from the authorities last year. Ethiopia is the fourth African nation seeking to restructure its debts under a Group of 20 process introduced in 2020 known as the Common Framework. That requires the government to have a program in place with the IMF to allow negotiations with creditors to begin in earnest. A deal with its official creditor committee should come within six months, State Minister for Finance Eyob Tekalign said by phone on Wednesday. Read more. Location Ethiopia

No Smoking Gun for RBA Hike in Australia Inflation Data global.abi.org Wed, 07/31/2024 - 21:37 A measure of inflation closely watched by Australian policymakers was lower than expected in the second quarter, taking pressure off the central bank to raise interest rates further at its policy meeting next week, the Wall Street Journal reported. Trimmed mean inflation, which is a key focus for the Reserve Bank of Australia, rose 3.9% from a year earlier in the second quarter, beating the central bank’s forecast of 3.8%. Economists had expected trimmed mean inflation would rise by 4.0%. The consumer-price index rose 1.0% from the prior quarter, and by 3.8% from a year earlier, the Australian Bureau of Statistics said Wednesday. Economists had expected CPI would rise by 1.0% over the quarter. The Australian dollar was sharply lower after the data and government bond prices were higher. “It’s not really a smoking gun for the RBA to raise interest rates. Still, it’s also the case that the RBA can’t yet claim victory over inflation,” said Sally Auld, chief investment officer at JBWere. The data has bought the central bank some time, Auld added. For now, it can leave the official cash rate at 4.35%, where it has been since November. Read more. (Subscription required.) Location Australia

EU Calls for Help with Shaping Rules for General-Purpose AIs global.abi.org Wed, 07/31/2024 - 21:37 The European Union has kicked off a consultation on rules that will apply to providers of general-purpose AI models (GPAIs) — such as Anthropic, Google, Microsoft and OpenAI — under the bloc's AI Act, its risk-based framework for regulating applications of artificial intelligence. Lawmakers want the Code of Practice to help ensure "trustworthy" GPAIs by providing developers with guidance on how to comply with their legal obligations, TechCrunch reported. The EU AI Act was adopted earlier this year and will come into force imminently, on August 1. But it has a phased implementation for compliance deadlines, and Codes of Practice are due to apply after nine months — so April 2025. That gives the bloc time to draw up the guidance. The Commission is inviting responses to the consultation from GPAI providers who have operations in the EU, as well as from businesses, civil society representatives, rights holders, and academic experts. "The consultation is an opportunity for all stakeholders to have their say on the topics covered by the first Code of Practice, which will detail out rules for general-purpose AI model providers," the Commission wrote. "The consultation will also inform related work by the AI Office, in particular on the template for the summary of the content used for the training of the general-purpose AI models and the accompanying guidance." The consultation is a questionnaire divided into three sections. One covers transparency and copyright-related provisions for GPAIs; the second is concerned with rules on risk taxonomy, assessment and mitigation for GPAIs with so called systemic risk (defined in the AI Act as models trained above a certain compute threshold); and the third section deals with the reviewing and monitoring of Codes of Practices for GPAIs. The Commission said that an initial draft Code will be developed "based on the submissions and answers to the targeted questions." Those responding to the consultation have the chance to influence the shape of the template the AI Office will provide to GPAI providers so they can fulfill a legal requirement to provide a summary of model training content. It will be interesting to watch how detailed that template ends up being. Read more. Location European Union

Chinese Solar Firm Akcome's Subsidiary Declares Bankruptcy Amid Plunging Prices, Overcapacity global.abi.org Tue, 07/30/2024 - 10:42 Chinese solar module producer Zhejiang Akcome New Energy Technology has filed for bankruptcy at one of its subsidiaries, citing an inability to repay its debts, according to a Monday filing, Reuters reported. Zhejiang Akcome Photoelectricity Technology's petition to enter bankruptcy restructuring was submitted by the parent company and was accepted by Changxing county court in eastern Zhejiang province, according to the filing with the Shenzhen stock exchange. As of April 30, Zhejiang Akcome Photoelectricity Technology's assets totalled 2.513 billion yuan ($346.4 million) and debts stood at 1.562 billion yuan, according to the filing. The decision follows news of financial troubles at parent company Zhejiang Akcome New Energy Technology. Trading of Akcome's shares was suspended from June 19 after the share price closed below 1 yuan ($0.14) for 20 consecutive days and on June 22 the Shenzhen stock exchange said it would terminate the listing. Read more. Location China

Liquidators Struggle to Recover Cash From China’s Broke Builders global.abi.org Tue, 07/30/2024 - 10:42 Liquidators trying to recoup at least a fraction of creditors’ investments in defaulted Chinese builders are running into dead-ends, Bloomberg News reported. They have encountered a host of challenges, from trying to get paid to scouring for financial documents and elusive executives. Creditors in three cases, including Sinic Holdings Group Co. and Yango Justice International Ltd., haven’t seen any significant distribution. Sinic’s case stalled, for example, after representatives from Kroll (HK) Ltd. didn’t land funding for an investigation to recover the financial books, the people said. Since China’s property crisis started, at least six developers with combined assets of more than $300 billion have been ordered by Hong Kong courts to liquidate. The struggles reflect the complexities of winding up Chinese developers which have most of their assets in the mainland, a credit risk highlighted when their high-yield dollar bonds took off about two decades ago. While there’s an agreement between Hong Kong and Beijing to recognize insolvency proceedings, it’s limited to a few cities in China. These test cases raise a thorny question for creditors on whether a winding-up order is preferable to attempts to keep negotiating. Read more. Location China

China Pledges Steps to Shore Up Flagging Economy global.abi.org Tue, 07/30/2024 - 10:41 Chinese leaders said they would take more aggressive steps to boost consumer spending and head off a worsening set of economic challenges, signaling rising concern about flagging momentum in the world’s second-largest economy, the Wall Street Journal reported. The Communist Party’s top policymaking body, the 24-member Politburo, pledged more measures to boost household income and reduce funding costs for companies, though the report from the state-run Xinhua News Agency offered few specifics on what it is planning. The Politburo meets roughly four times a year to discuss economic policy and Tuesday’s meeting, as expected, offered shorter-term measures to complement the longer-term economic and other priorities laid out in last week’s twice-a-decade Third Plenum. As the recovery has shown signs of slowing this year, China’s central bank has already jumped into the fray, delivering a string of surprise rate cuts last week that amount to the most substantial easing of monetary policy so far this year. Tuesday’s meeting, chaired by party leader Xi Jinping, didn’t point to any theoretical shifts to their approach in tackling some of China’s thorniest issues, most notably a property sector that remains in crisis as well as hidden debts racked up by Chinese local governments that are also holding back growth. The Politburo’s assessment of China’s economy is “grimmer” in tone when compared with that of senior officials two weeks ago when they released second-quarter economic growth figures, said Bruce Pang, a China economist at Jones Lang LaSalle. The Politburo’s downbeat tone indicates that more policy support and stimulus could be in the offing. The Chinese economy slowed sharply in the second quarter of the year, with gross domestic product expanding just 4.7% compared with a year earlier. Growth also fell short of economists’ expectations. Read more. (Subscription required.) Location China

Edtech Firm Byju’s Seeks to Settle Debt With Cricket Board global.abi.org Tue, 07/30/2024 - 10:40 Byju’s is in talks to settle the dues it owes India’s cricket governing body, lawyers for both sides told a court Tuesday, raising the prospect that the online tutoring startup may resolve a key dispute and avert insolvency, Bloomberg News reported. Byju’s has “almost resolved” a dispute over unpaid fees to the Board of Control for Cricket in India and will pay “a certain tranche of the money” by this evening, Arun Kathpalia, a lawyer representing the edtech firm told the National Company Law Appellate Tribunal during a hearing. A lawyer for BCCI also said in court both parties were engaged in settlement talks. The NCLAT will next hear the matter on Wednesday. By Tuesday evening, Byju’s had transferred 500 million rupees ($6 million) to the cricketing overseer. The payment is a first step toward resolving a disagreement that’s clouded the prospects of a once-prominent startup. A lower court this month pushed Byju’s, officially Think & Learn Pvt., into insolvency after it couldn’t pay the BCCI 1.59 billion rupees ($19 million). It also appointed an interim resolution professional, effectively taking away control of the company from founder Byju Raveendran. A decision to withdraw insolvency proceedings would throw a lifeline to the former tech high-flyer, now grappling with a cash-crunch after business sagged in Covid’s aftermath. The BCCI has to inform the court formally before withdrawing its case. Read more. Location India

Germany’s Priogo Files for Insolvency global.abi.org Tue, 07/30/2024 - 10:39 At the end of last week, Priogo AG filed an application for the opening of insolvency proceedings with the responsible district court in Bonn, PV-Magazine.com reported. The judges appointed lawyer Franz Zilkens from the Voigt Salus law firm as provisional insolvency administrator, as noted in the public announcement. The reason for the bankruptcy application has been the extremely difficult market situation since the middle of last year, sources told pv magazine. There is strong competition in the region, which affects not only PV installations, but also the heating industry. In addition, the government's adoption of measures to speed up PV expansion, known as Solar Package 1, was delayed for months. The hoped-for improvement in the order situation has therefore not materialized for the time being. Like many solar installation companies, Priogo also grew with the strong surge in demand after the outbreak of the Ukraine war in 2022. Demand has now returned to normal, but the remaining orders are distributed among significantly more suppliers on the market. Priogo is aiming to maintain business operations despite the provisional insolvency. The insolvency money will secure the salaries of employees for the next three months. In the coming weeks, a solution to continue the company will be sought together with the insolvency administrator, the company said. Read more. Location Germany

Germany’s Inflation Unexpectedly Quickens in Challenge to ECB global.abi.org Tue, 07/30/2024 - 10:39 German inflation accelerated in July, evidence that may add to the European Central Bank’s caution as it moves toward further interest-rate cuts, Bloomberg News reported. Consumer prices rose 2.6% from a year earlier in July, up from 2.5% the previous month. Analysts polled by Bloomberg had predicted the pace to remain stable. While energy costs eased less than in June, food price pressures increased and services remained stable. A separate report earlier showed Spanish inflation slowing more than predicted. Readings for France, Italy and the euro area are due on Wednesday. Combined with uneven growth reports showing an unexpected contraction in Germany, the inflation numbers will inform ECB officials trying to work out whether the economy needs another cut in borrowing costs. Much more data will be available for their next meeting in September, Governing Council member Boris Vujcic said on Tuesday. The picture that emerged since this month’s rate decision is one of resilient growth in France, Spain and Italy, as well as weakness in the euro area’s biggest member state. Read more. Location Germany

Swiss Watchdog Scrutinises UBS Vetting of Wealthy Credit Suisse Clients global.abi.org Tue, 07/30/2024 - 10:37 Switzerland's financial supervisor has been scrutinising how UBS vets risky wealthy clients that it wants to transfer from Credit Suisse, sources said, as the regulator takes a hands-on approach to the bank's integration of its fallen rival, Reuters. Earlier this year, watchdog FINMA reviewed the filters UBS, currently worth $105 billion on the market, applies to screen Credit Suisse wealth management customers to ensure Switzerland's banking giant doesn't end up with problematic clients on its books, two sources with knowledge of the matter told Reuters, speaking on condition of anonymity because they were not authorized to speak to the media. Switzerland's financial supervisor has been scrutinising how UBS vets risky wealthy clients that it wants to transfer from Credit Suisse, sources said, as the regulator takes a hands-on approach to the bank's integration of its fallen rival. Earlier this year, watchdog FINMA reviewed the filters UBS, currently worth $105 billion on the market, applies to screen Credit Suisse wealth management customers to ensure Switzerland's banking giant doesn't end up with problematic clients on its books, two sources with knowledge of the matter told Reuters, speaking on condition of anonymity because they were not authorized to speak to the media. Switzerland's financial supervisor has been scrutinising how UBS vets risky wealthy clients that it wants to transfer from Credit Suisse, sources said, as the regulator takes a hands-on approach to the bank's integration of its fallen rival. Earlier this year, watchdog FINMA reviewed the filters UBS, currently worth $105 billion on the market, applies to screen Credit Suisse wealth management customers to ensure Switzerland's banking giant doesn't end up with problematic clients on its books, two sources with knowledge of the matter told Reuters, speaking on condition of anonymity because they were not authorized to speak to the media. Switzerland's financial supervisor has been scrutinising how UBS vets risky wealthy clients that it wants to transfer from Credit Suisse, sources said, as the regulator takes a hands-on approach to the bank's integration of its fallen rival. Earlier this year, watchdog FINMA reviewed the filters UBS, currently worth $105 billion on the market, applies to screen Credit Suisse wealth management customers to ensure Switzerland's banking giant doesn't end up with problematic clients on its books. Banks use filtering technology to identify potential issues associated with clients as part of their compliance rules to mitigate risks including money laundering. The Swiss financial regulator entered into a back and forth with UBS over filters and "know your client" rules, a set of procedures that banks use to verify the customers' identity and information linked to them. It also reviewed how UBS applies ratings ranging from high to low risk to prospective clients. Read more. Location Switzerland

Ethiopia Bonds Jump After IMF Approves $3.4 Billion Program global.abi.org Tue, 07/30/2024 - 10:36 Ethiopia’s defaulted international bond jumped after the International Monetary Fund agreed to lend the country $3.4 billion over four years as part of an economic reform program, a key step that’s also expected to ease negotiations with creditors on restructuring its debt, Bloomberg News reported. The decision will allow the immediate disbursement of about $1 billion, the fund said in a statement on Monday announcing the loan. The IMF funds are part of about $10.7 billion that eastern Africa’s biggest economy expects from creditors through loans, grants and debt re-profiling. The IMF said the program will “catalyze additional external financing from development partners and provide a framework for the successful completion of the ongoing debt restructuring.” Ethiopia’s 2024 eurobond jumped 2.23 cents to 77.48 cents on the dollar by 10 a.m. on Tuesday in London — the most since December, according to data compiled by Bloomberg. That’s the highest since November 2021. Ethiopia has about $28.4 billion of external debt and has been seeking to restructure its loans since 2021. Progress was delayed by a two-year civil war in the nation’s northern Tigray region that ended in November 2022. The country defaulted on a eurobond payment in December of last year. Read more. Location Ethiopia

Pakistan Cuts Rates as Policymakers Try to Revive Economy global.abi.org Tue, 07/30/2024 - 10:36 Pakistan cut its benchmark interest rate for a second consecutive meeting as slowing price gains give policymakers room to focus on shoring up growth in the cash-strapped South Asian nation, Bloomberg News reported. The State Bank of Pakistan reduced the target policy rate by 100 basis points to 19.50%, according to central bank governor Jameel Ahmad. The move was predicted by 31 out of 51 analysts in a Bloomberg survey. “The Committee viewed that there was a room to further reduce the policy rate in a calibrated manner to support economic activity, while keeping inflationary pressures in check,” the central bank said in a statement on its website. The central bank slashed rates in June for the first time in four years, going for a 150 basis point cut. Pakistan is trying to keep its economy afloat after dodging a default last summer and the government has set a 3.6% growth target for the new fiscal year from 2.4% in the previous year that ended in June. The central bank expects growth between 2.5% and 3.5%. The government this month signed a staff-level agreement with the International Monetary Fund for a fresh $7 billion loan. Fitch Ratings raised Pakistan’s credit rating, citing reduced risks from external funding after it secured the new loan program. The country has been lurching from one IMF loan to another to keep up with debt payments, which this year stand at about $26 billion. Pakistan has to pay about $10 billion while rest of the loans are expected to be rolled over in the year started July, Ahmad told a press briefing in Karachi on Monday. Read more. Location Pakistan

Japan Built Thailand’s Car Industry. Now China Is Gunning for It. global.abi.org Tue, 07/30/2024 - 10:31 Japanese companies established Thailand’s auto industry virtually from scratch, dating back to the years after World War II. By the late 1970s, Japanese brands commanded around 90 percent of car sales in Thailand. They invested in building Thai supply chains, and their cars were also widely perceived by customers as reliable, the New York Times reported. In the 1990s, American and South Korean automakers targeted the Thai market but barely made a dent in Japan’s share. Now Japanese automakers’ stronghold is finally being loosened by Chinese manufacturers that offer something they don’t: electric vehicles at affordable prices. The influx of Chinese brands like BYD, Great Wall Motor and SAIC Motor in the past two years is ringing alarms in Japan. In December, Srettha Thavisin, Thailand’s prime minister, traveled to Japan with a message for Japanese companies: Move quickly, invest in electric vehicles or lose out to China. “You are not alone in the world,” Mr. Thavisin warned Japan’s automakers in an interview with Japanese media. Japanese companies’ unwillingness to fully embrace electric vehicles, which are popular in Thailand, has held them back in the Thai market. Mazda, Mitsubishi, Nissan, Suzuki and Isuzu have taken the heaviest blows, in part because of their limited lineups of plug-in hybrid or fully electric models. Last year, new car sales in Thailand for those companies collectively dropped 25 percent while overall sales fell 9 percent, according to data compiled by MarkLines, an automotive information provider. Read more. Location Japan Thailand

Country Garden Liquidation Hearing Adjourned to January Next Year, Court Says global.abi.org Mon, 07/29/2024 - 11:24 A Hong Kong court on Monday adjourned a hearing into a petition seeking liquidation of Country Garden until Jan. 20, 2025, giving a breather to the embattled Chinese developer which is trying to finalise an offshore debt revamp plan, Reuters reported. Ever Credit Limited, a unit of Hong Kong-listed Kingboard Holdings, filed the liquidation petition against Country Garden in February for non-payment of a $205 million loan. The developer defaulted on its $11 billion worth of offshore bonds last year. A lawyer for Country Garden told the court on Monday that the developer expected to publish offshore debt restructuring term sheets to creditors in September, and that it planned to seek approval from the court on that arrangement early next year. The hearing into Country Garden's liquidation petition comes against the backdrop of Chinese authorities stepping up efforts to revive the property sector after it slipped into an unprecedented debt crisis in mid-2021. Read more. Location China

China Evergrande's EV arm Drops After Creditors Seek Bankruptcy Proceedings for Units global.abi.org Mon, 07/29/2024 - 11:23 Shares of China Evergrande New Energy Vehicle fell 7% in Monday morning trade after individual creditors of two of its units sought court approval for the units to go through bankruptcy proceedings and be reorganised, Reuters reported. The electric car maker said its units Evergrande New Energy Vehicle (Guangdong) and Evergrande Smart Automotive (Guangdong) had received notice from a local court about the July 25 application. "The above notice has a material impact on the production and operating activities of the company and the relevant subsidiaries," the company said in a filing to the Hong Kong bourse late on Sunday. Read more. Location China

Banks Told to Speed Up IBC Resolutions global.abi.org Mon, 07/29/2024 - 11:23 Taking strong exception to slow action under the Insolvency & Bankruptcy Code (IBC), govt has started monitoring the top 20 cases, while also asking bank chiefs to closely follow the top 20 cases with their banks, the Times of India reported. This has led to movement in Jaiprakash Associates and Amtek Auto, where lenders were seen to be dragging their feet. "Banks have been citing delays in the tribunal, but we discovered that they were themselves to blame. They were found to be discussing loan settlements in some cases when the issue had been taken up under IBC," a top official said, suggesting a nexus between promoters and bankers in some cases. Take for instance, Jaiprakash Associates, promoted by the Gaurs. In 2017, it was in the second batch of high-profile cases identified by the finance ministry and govt that was to be taken up for insolvency resolution. While Jaypee Infra was pursued, banks led by ICICI Bank, were seen to be moving slowly in the Allahabad bench of NCLT, despite SBI filing another petition. It was only after the govt decided to step in that the bankers pursued it. Officials said Nirmala Sitharaman is herself reviewing some of the cases. Financial services secretary Vivek Joshi, IBBI chairman Ravi Mittal and corporate affairs secretary Manoj Govil have been monitoring the cases and asking banks to move swiftly as delay results in significant value erosion and lower the overall resolution and recovery. Bankers have often blamed NCLT and legal system, along with promoters, for delays. But a case wise analysis by the officials showed that in several cases banks had sought adjournments and sought to put the blame on promoters. Final resolution has been done in 947 of the 7,567 cases admitted in NCLT although the finance ministry is taking credit for several cases, where the companies decided to clear the dues the moment one of the aggrieved creditors moved the tribunal. Read more. Location India

BOJ to Cut Bond Buying as Fate of Rate Policy Stirs Jitters global.abi.org Mon, 07/29/2024 - 11:22 Bank of Japan Governor Kazuo Ueda will have investors on high alert Wednesday when he lays out a detailed plan for quantitative tightening after years of massive easing. He may also double down by adding an interest rate hike to boot, Bloomberg News reported. While only about 30% of BOJ watchers predict a hike as their base-case scenarios, almost nobody is ruling out the possibility, according to a Bloomberg survey. The high degree of uncertainty has propelled the yen and Japanese stocks on a roller coaster ride that’s likely to continue until the decision and beyond. Some BOJ officials are open to the idea of raising rates this month with inflation remaining broadly in line with forecasts. Others see the central bank standing pat as an option while it awaits more data in hopes of seeing signs of resurgent consumer spending. It all adds up to an unusually fraught meeting in which the governor may wind up setting the policy course by exerting his will. The outcome will reverberate across global markets, with the yen at an inflection point that may see it extend this month’s remarkable rebound, or slump back to multi-decade lows. Read more. Location Japan

Analysis: Japan Wanted Higher Inflation. It’s Here, and It Hurts. global.abi.org Mon, 07/29/2024 - 11:22 As the rest of the world fought to keep inflation in check, one country welcomed it with open arms. In the past few years, Japan saw a burst of inflation, spurred by pandemic supply chain snags and geopolitical shocks, as a way to shake the economy out of a decades-long cycle of weak growth and pressure from deflation. So while major central banks like the U.S. Federal Reserve raised interest rates to rein in prices, the Bank of Japan kept rates low as inflation accelerated, the New York Times reported. The theory was that by sticking with rock-bottom rates, the central bank could harness the temporary spike in prices to foster the kind of inflation it had long sought: moderate, steady and supporting economic growth. Businesses could cite their rising costs to justify price increases, leading to higher revenues that went toward higher wages for workers. With more money in their pockets, consumers could spend more, creating a positive economic cycle. There have been some promising signs: Big Japanese firms like Toyota have reported large profits and pledged the biggest wage increases for workers in decades. In March, the Bank of Japan raised its policy rate for the first time in 17 years, concluding that the economy had achieved the “virtuous cycle” between wages and prices it had envisioned. Ahead of a Bank of Japan meeting this week, there are a growing number of signs that everything is not going to plan. Japan’s economy has shrunk in two of the past three quarters, losing its spot as the world’s third largest to Germany’s. Read more. Location Japan

South Africa Mulls Tightening Over-The-Counter Derivative Rules global.abi.org Mon, 07/29/2024 - 11:19 South Africa is getting closer to publishing long-awaited changes to its financial rules and has earmarked over-the-counter derivatives for greater scrutiny, alongside unlisted financial market activity, Bloomberg News reported. Regulators have been undertaking a financial market review for several years and “are at the point where we are able to put through some of those recommendations,” said Financial Sector Conduct Authority Executive Director Olano Makhubela. “The plan is for those to be published this year,” he said on the sidelines of an Investec South Africa Markets Surveillance Conference in Johannesburg last week. A lack of transparency in the OTC market made managing risk in the financial system much harder, while the growing role of private equity and debt investors warrants more supervision and regulation, according to Makhubela. Members of the the Group of 20 nations, which South Africa will chair next year, have committed to reforming their over-the-counter derivatives markets to reduce the risk of a damaging counter-party failure. Bank for International Settlements data shows the notional value of outstanding OTC derivatives jumped 8% in 2023 to $667 trillion, the biggest annual increase since 2017. Read more. Location South Africa