High-risk asset expansion
April 11, 2021 (Sunday) Clear
- High-risk assets are expanding in global financial markets.
One of the reasons is that outside the existing regulatory framework for finance, "shadow banks" are inflating risky trades amid a glut of money.
In the stock market, the number of listings of special purpose acquisition companies (SPACs) that exist solely to pursue acquisitions is on the rise.
There is also a significant influx of funds into cryptocurrency assets (virtual currencies).
Among the regulatory gaps that have allowed growth are shadow banks like the Arkkegos (Archegos) and family offices (private asset management firms), which have drawn attention.
The asset size of family offices worldwide is about $5.9 trillion,
surpassing hedge funds (about $3.6 trillion) and venture capital (about $1.36 trillion).
If the economy overheats and long-term interest rates jump, the market environment surrounding high-risk assets could change dramatically, presenting a potential risk.
- Honda <7267> [closing price 3,215.0 yen] and global automakers such as BMW of Germany
are beginning to undertake efforts to reduce greenhouse gas emissions from the production stage in batteries for electric vehicles (EVs).
They are considering disclosing carbon dioxide (CO2) emissions for materials and components and encouraging suppliers to adopt countermeasures.
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