Bus passing the Bank of England at night

Assessing the Virtues of Negative Interest Rates

Early this year, the Bank of England (BoE) was reported to have instructed banks to prepare for negative interest rates within six months.  The BoE purportedly did so as part of its plans for a monetary stimulus to resuscitate the UK economy ravaged by the Covid-19 pandemic.  Economists have since been divided on whether driving the BoE’s base rate from the already ultra-low 0.1% to … Continue reading Assessing the Virtues of Negative Interest Rates

Sovereign Wealth Funds: Asset or Liability?

A Sovereign Wealth Fund (SWF) is a fund managed by the state and comprised of income generated from the government’s surplus reserves. SWFs have been an important aspect of the economic landscape for almost two decades, and their numbers have increased dramatically since the 2008 Financial Crisis, with over 100 funds controlling nearly $8 trillion in assets globally. Many Sovereign Wealth Funds have enjoyed great … Continue reading Sovereign Wealth Funds: Asset or Liability?

Coins made of gold and showing name Bitcoin, Ethereum, and Litecoin

What is Behind Bitcoin’s Recent Rally?

Bitcoin, the world’s largest cryptocurrency, has caught the world’s attention (again). Infamous for its volatility, it has faced scepticism from institutions and finance leaders. However, during the last year alone, Bitcoin has jumped from lows of $4000 to highs of almost $42000. What explains the eye-catching increases? Bitcoin was created in 2009 by the pseudonymous Satoshi Nakamoto at a time when the world was experiencing … Continue reading What is Behind Bitcoin’s Recent Rally?

Dubai intersection

The Dubai Property Market

A city whose name is synonymous with skyscrapers, luxury apartments, and residential villas, Dubai’s economic success has greatly depended on its ability to attract a large number of foreign residents, who make up 85% of the population. These individuals are encouraged to buy or rent property in the city, feeding a market which makes up 13.6% of the emirate’s GDP. However, property prices have fallen between … Continue reading The Dubai Property Market

CDO spelt from a one dollar bill

CDOs: The genius idea that destroyed the World Economy

What are they? Collateralized debt obligations (CDO), initially created by the Drexel Burnham Lambert bank, are instruments which are formed by pooling together cash-generating assets such as mortgages, loans and other forms of debt. They are made up of various ‘tranches’ based on their respective level of credit risk. Supposedly, one diversifies their risk when buying a CDO as they have portions of high, medium … Continue reading CDOs: The genius idea that destroyed the World Economy