Economies

What Are Investment-grade Bonds? Investment-grade bonds—also known as "high-grade" bonds—are debt securities issued by corporations and municipal governments that are generally considered to have a low risk of default. Bonds in this category are generally rated Baa or better by Moody's Investors Services and BBB or higher by S&P Global Ratings and Fitch Ratings, the three main credit rating agencies. By contrast, bonds rated below these designations are called non-investment…

What Are Animal Spirits? "Animal spirits" is a term coined by the British economist John Maynard Keynes to describe emotional or "gut" instincts by investors and businesspeople to take risks rather than based on any empirical evidence. Writing in his 1936 classic, "The General Theory of Employment, Interest and Money," during the Great Depression, Keynes described animal spirits as "a spontaneous urge to action rather than inaction, and not as…

A U.S. administration headed by former Vice President Joe Biden is likely to take a different turn from the outgoing President Donald Trump administration when it comes to financial and economic matters. Trump was distinctly more pro-business and market friendly, reversing or rolling back many of the regulations and laws enacted by President Barack Obama. However, Biden is likely to do the same to many of Trump's policies and revert…

Throughout the U.S. electoral cycle of 2020, a collection of unique events drove a spirited race for the White House. Dubbed by political pundits as "the most important election of our time," Election 2020 featured incumbent Republican Donald Trump against Democratic challenger Joe Biden. Issues such as social welfare, homeland security, economic growth and the coronavirus (COVID-19) pandemic defined the contest. From an economic standpoint, the difference between Trump and…

The government and the Reserve Bank of Australia, like their counterparts in other major countries, have enacted several measures to protect and stimulate their economies in the wake of the coronavirus pandemic. Reserve Bank And Banking System On 3 March the Reserve Bank's board lowered its benchmark cash rate, which is the interest rate on unsecured overnight loans between banks, by 25 basis points to 0.50% and said it "is…

Reserve Bank of New Zealand On 16 March the Reserve Bank of New Zealand (RBNZ), the country's central bank, lowered its Official Cash Rate from 1.0% to 0.25% and said it would remain at that level "for at least the next 12 months." The RBNZ announced that it would delay by 12 months the start date of increased capital requirements for banks until 1 July 2021, and said it would…

Canadian Government On 13 March the government announced the creation of a CA$10 billion Business Credit Availability Program (BCAP) to support financing in the private sector through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Under this program, BDC and EDC will increase their cooperation with private sector lenders to coordinate financing and credit insurance solutions for Canadian businesses. The government also announced a series of…

United States Government As the world's largest economy, the U.S. has been at the forefront of taking the initiative to help its citizens and businesses survive financially during the shutdown and help them get back on their feet afterward. The main action taken by the government was the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a more than US$2 trillion economic relief package that includes several important programs and…

The Canadian banking system is generally considered to be one of the safest in the world. According to Global Finance magazine's annual listing of the world's safest banks based on their credit ratings, eight Canadian banks ranked in the top 40 in 2019, including those ranked 11 through 13. Canadian banks captured the top six positions in the ranking of the safest banks in North America. Regulation One of the…

The Australian financial system is regulated by the Australian Prudential Regulation Authority (APRA), which oversees "authorised deposit-taking institutions" such as banks, building societies and credit unions. It also regulates insurance companies and "superannuation," or pension, funds. APRA was created by the Australian government on 1 July 1998. The agency is tasked with "maintaining the safety and soundness of financial institutions, so that the community can have confidence that they will…