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Economic reform typically denotes to deregulation with an objective to enhance economic development and eliminate poverty.

The main obstacle to executing required structural reforms is the increase in popular measures across the developed economies. Several governments in Europe and the US have resorted to implementing popular measures to gain a political mileage.

According to the Spanish Economy Minister Luis de Guindos, "These are not easy times for governments globally all over the world. The biggest challenge and the biggest enemy of structural reform are populism and populism is pervasive now. Even in the (United) States, I have realized you have a little bit of populism now."

Banks in Europe, which were impacted by a huge amount of real estate loans had to seek global assistance to bail them out.

Lenders urged the European nations to initiate stringent reforms of the banks and labour markets.

As per the IMF Deputy Managing Director, Min Zhu, "We observe in Europe that people more and more realize that structural reform is a must."

According to Diana Farrell, CEO of the JPMorgan Chase Institute, “Political populism corroded the ability of government and regulators to have an ongoing dialogue with business and industry. If you create a populist environment… You are going to get regulations that are actually more crippling to the economy."

Political populism is expected to continue in the near future. A slowdown in the global economic activity and negligible productivity development imply that real earnings and expenditure are estimated to be below normal.

Therefore, when the real economic scenario is not in line with expectations, global political leaders would want to take advantage of deteriorating living standards and enhancing economic uncertainty.

Several aspects are strengthening populism and dissatisfaction. Globalization, digitalization and robotization have destabilized job security.

Numerous employment opportunities are based on temporary contracts, part-time jobs and self-employment without any social security.

A new segment of uncertain workers known as “Uber” class has become a certainty.

 The requirement for education, technical and social expertise has moved upwards significantly and therefore has enhanced the number of individuals entering the labour market. Unions have lost their bargaining power, thereby restricting wage negotiations.

At a time when developed nations must execute comprehensive reforms, political compulsions are forcing the governments to resort to populism.

This would undermine the economic stability in the long run. Global political stakeholders must reach a consensus and work together to avoid another global financial meltdown.

Renewable energy is defined as energy that is taken from resources which are naturally restored based on a human time frame - solar, wind power, water, geothermal.

They are spread over a large ecological expanse in comparison to other sources of energy. Rapid distribution of clean energy and energy effectiveness is leading to energy safety, climate modification alleviation, and economic growth.

According to experts, nations responsible for the emission of greenhouse gas (GHG) have been penalized for environmental disasters due to GHG emissions. A stringent penalty would deliver robust incentives for implementation of renewable energy scientific know-how and international clean energy policies.

There is increasing support for endorsing renewable energy like solar and wind energy. The demand for renewable energy across the globe is estimated to increase intensely in the future.

Often, renewable energy projects are substantial, renewable technologies are appropriate to the countryside and developing nations.

According to United Nations' Secretary-General Ban Ki-moon, “Renewable energy has the ability to lift the poorest nations to new levels of prosperity.”

Regional stakeholders can contribute to the growth of renewable energy in respective regions. It is the political support extended by them that has facilitated the transformation of the energy landscape.

The governments at a regional level have the legal influence to implement change initiatives. Once the change management is successful, it could become a best practice to be executed globally.

The “energy system” in the future would ensure the achievement of a complete renewable future. It would consist of a moderately disseminated, decentralized energy structure with installed energy repository, a demand oriented control and advanced information technologies.

Regional renewable energy policies differ internationally. One common factor is the impact of renewable energy on regional climate action strategies - alleviation and transformation prospects.

This is evident in several developed nations, where the prominence of climate management at the regional stage is converting into a structure to support renewable energy. As far as developing nations are concerned, availability of energy, energy safety and manufacturing growth can be the base for the development of renewable energy policies.

Several aspects impact the methodology implemented by regional governments-resource availability, funds availability, regulatory pressure, legal power among others.

 Some key factors influencing development of international renewable energy policies are:

·         Energy development objectives globally.

·         Availability of technologies related to the goals.

·         Various innovations that are needed to bolster technological    advancement.

·         Commitment of stakeholders in promoting the policies.

·         Quality of research on renewable energy.

·         Universal acceptance of renewable energy.

·         Increase in international energy efficiency.

·         Cost reduction.

·         Innovation in product, process.

·         Technological venturing.

·         Commercial Scale-up.

·         Adaptation.

·         Knowledge sharing.

·         Improved human competencies.

·         Efficient infrastructure.

·         New markets.

·         Availability of funds.

·         Effective regulatory framework.

·         Energy safety.

·         Competitiveness in international markets.

·         GHG emissions reduction.

The key challenges to the implementation of renewable energy policies would be establishing the environment for innovation to flourish and ensuring its success for a long period. The extent of demand would also influence demand-side policies.

 Other factors, including market dimension, human expertise, policy transparency are also crucial in shaping the long-term renewable energy policies. Continuous multi-stakeholder engagement and acceptance of renewable energy technology flows are critical factors.

The existence of economic growth policies would also influence renewable energy implementation. Sustained implementation of renewable energy policies is crucial for global socioeconomic growth.

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Banks across the globe are facing increasing compliance prospects that are driving compliance plans to the edge. The range and attributes of compliance have progressed and are not restricted to procedures oriented banking regulations.

Banking regulations are a critical type of regulation pursued by governments to control the functioning of a bank. They are essential to ensure safety and reliability of the financial system. The amalgamation of uncertainty of banks and their vital socioeconomic role resulted in banks being regulated.

Operational and compliance risks have become very intricate, enhancing the possibility of non performing processes that result in bad customer experience and compliance structure failures. A modified tactic to compliance and operational risk management is mandatory for banks to reduce costs due to lawsuits, fines, resource requirements.

Banks can look at pioneering methods to steer transformation:

• Consolidate pertinent features of operational and compliance risk management • Streamline products and channels • Use analytics • Systematize compliance testing • Leverage lean methods • Manage change Critical alterations in the role and working of banks and financial institutions over a period of time have changed the outlook towards risk. Several risks can be ascribed to globalization, launch of start-ups, technological breakthroughs and operational efficiency.

The changes have not only led to economic development, but also brought about a paradigm shift in managing risk.

Some critical shifts are:

• Establishment of regulated risk management procedures to protect customers and investors • Globalization has resulted in a wide array of political, economic and operating risks for banks and financial institutions • Migration of business processes creates outside risks to banks • Operational effectiveness requires a real time treasury and cash management, therefore banks must initiate measures to mitigate the risks • An emphasis on data security and customer privacy Certain basic contingencies that banking stakeholders must address: • Identify the primary exposures - measured risk and unmeasured concerns • An understanding of probable losses from the exposures • The extent to which banks are willing to have a negative performance due to the risks to accomplish the long-term financial goals.

An integrated risk and compliance management is crucial to ensure the banking system does not fail. Compliance efficiency is enhanced while cost of compliance is decreased. It also enables a cross-organizational tactic to control risk. Banks must leverage the latest technology to construct an integrated system. Stand-alone systems are inefficient. However, the construction of an integrated system to manage risk and compliance requires significant expenditure. The investment would be beneficial in the long run. It would simplify the process of incorporating current and proposed regulations for the banks. The business and technology benefits include: • Reduced costs • Improved visibility • Scalability and consistency • Modified security and access management • Quick execution • Cost effective maintenance A combined method for compliance and risk management provides positive results to banks and financial institutions. They would be in a better position to expand their business in a highly complicated business scenario.

The recent remarks by Janet Yellen, the Chair of the Board of Governors of the Federal Reserve System, placed restraint regarding the probable upward movement of rates of interest. Along with the Federal Open Market Committee (FOMC) information “dot plot” that was released recently, they reflect the cat and mouse gamesmanship central banks and the investment community are a part of.

Up until recent times, the game appeared to be placed on hold, since the investment community and the Federal Reserve could not agree on the probable interest rates. The mouse which is the market has not been paying attention to the cat (The Fed).

On the other hand, because of the latest unexpected statement from the Federal Open Market Committee (FOMC), the scenario could alter. The highly transparent information instrument with the FOMC – “dot plot” of unspecified interest rate estimates, reflected a huge descending correction to medium forecasts for the current year and the future.

Considering that market pricing and the dots began at a significant distance away from each other, it is relevant to understand the reason behind the start of the cat and mouse game. The foundation for the start is the investment communities’ outlooks in common, and for central bank rates in specific.

Usually, the investment community would form outlooks based on the relationships among different prices and the fundamental data. It is not simple to determine the relationships. Hence, markets reflect the ambiguity and seek direction from appropriate organizations on corporate earnings, macroeconomic projections. In this regard, central banks have to be clear about their opinion.

On the other hand, markets regularly price in various results from the direction provided to them. They could interpret data otherwise. However, if the investment community does not agree with the direction largely, the direction does not impact the market price.

The Fed has been caught in such a scenario. The investment community has not accepted the direction from the dots in developing projection for rates in the future. Hence, the mouse did not consider the cat.

Only a recluse would not have possessed or used products that entered the Rotterdam port. During the financial year 2015, the port managed 466m tonnes of consignment. It was twice the quantity of consignment managed by the second largest port (Antwerp) in Europe.

Continuous movements in the magnitude and structure of the flows provide an immediate measure of the well-being of the global economy. The developments that are converting the port’s processes - computerization and the shift from non-renewable energy, provides an insight into the futuristic direction.

Mega ships from the Atlantic and barges from internal waterways can approach the port easily. Hence, Rotterdam has been the most important port in Europe for a long period.

The port has been developing in sync with the international economy, from the middle of the 20th century.

The Operations at The Port Confirm Four Trends That Are Impacting the Global Economy:

·         The reduction in the price of oil.

·         The decline of the Chinese economy.

·         The slow EU retrieval.

·         The international downturn in production and commerce.

The Chief of Vopak (The largest independent storage company globally), Eelco Hoekstra, has witnessed the real expression of fluctuations in the energy markets. For e.g., in 2014, as fracking was bringing down the price of natural gas, coal from the US was moving towards Europe.

After the price of oil crashed, mega consumers projected a comparatively immediate turn around. On the other hand, the price of futures contracts meant the huge storage tanks in Rotterdam were filled up and traders made a huge profit (buying cheap oil at spot rate and selling futures at a greater price).

The decline in the Chinese automobile demand indicates less iron ore would be shipped to the steel units in Germany. The increase in Chinese wages led to relocation of production units to other locations. For e.g., Turkey. According to some experts, this is an indicator that the globalization process is diminishing.

Insider trading is the trading of a stock/securities related to a public firm by personnel with the opportunity to access non-public data pertaining to the organization. Insider trading is illegal in several nations, since it is considered as unethical to other investors without the access to the data.

According to experts, insider trading increases the cost of capital for issuers of securities, thereby reducing the complete economic development, while some financial stakeholders believe that insider trading must be allowed to take place and in the long run it would be beneficial to the markets.  Any trading by particular insiders, for e.g., employees, is usually allowed provided it is based on material information that is not available in the public domain.

Nonetheless, most governing authorities need such trading to be informed so that they can be scrutinized. For e.g., in the US, trading performed by corporate personnel, key stakeholders in the company, prominent shareholders must be informed to the regulatory authorities, often within a short business period. Insiders in the US must file a Form 4 with the U.S. Securities and Exchange Commission (SEC) at the time of purchasing or selling shares of their firm.

The procedures pertaining to insider trading are intricate and differ from one nation to another. Liability for insider trading violations would be difficult to avoid based on a quid pro quo arrangement if the person getting the information was either aware or should have been aware that the information was material non-public information.

Another perspective regarding the insider trading - the misappropriation theory is accepted as per the US law. According to the misappropriation theory, any person misappropriating information pertaining to the firm and uses the information to trade in a given stock could be guilty of insider trading. It would be difficult to prove that a specific person has been involved in insider trading since traders would operate behind nominees, offshore organizations and proxies.

According to experts at AcademyFT, legal trades by insiders can also happen, since employees from publicly traded corporations usually have stock or stock options. The trades are usually public in the US by way of Securities and Exchange Commission filings, mainly Form 4.

According to SEC Rule 10b5-1, the restriction against insider trading does not need proof that an insider actually utilized material non-public information while performing a trade; the availability of such information would not be sufficient to disrupt the provision and the SEC would understand that an insider in control of material non-public information utilized the information when performing a trade.

It is a trading system that uses sophisticated mathematical models for taking decisions on transactions related to the financial markets. The stringent rules incorporated into the model aim to identify the best time for an order to be placed that would result in the minimum effect on a stock’s price. Huge amounts of shares are mostly purchased by segregating them into smaller lots and then utilizing the intricate algorithms to determine when the smaller blocks have to be purchased.

As per a study by the Academy of Financial Trading, the mega institutional investors use the algorithmic trading because of the high volume of shares purchased on a daily basis. Complicated algorithms enable the investors to secure the most optimal price without impacting the stock’s price to a large extent and enhancing purchasing costs.

The prominent algorithms utilized in the financial sector are arrival price, time weighted average price (TWAP), volume weighted average price (VWAP), market-on-close (MOC), and implementation shortfall (the variance between the share-weighted average implementation price and the mid-quote at the point of first entry for market or discretionary orders).

Algorithmic Trading Trends

Customized Algorithms The financial sector is increasingly moving away from “commoditized” algorithms to customized algorithms.

Algorithms Migrating to Currencies The utilization of algorithms in various asset classes would gradually increase. There are robust clues that algorithms are used in the international foreign exchange market, especially given the fact that investors are including foreign exchange (FX) into multi-asset-class strategies.

Fixed Income Next The use of algorithmic trading is being examined in the fixed-income market gradually. It is expected that algorithm trading across fixed-income markets would bolster in the near future.

Algorithms for News Analysis Markets are impacted by the news. Trading firms are keen to have strategies that would evaluate the news and assess its effect on a firm or sector. For e.g., an algorithm may provide an alert to the trader if a news about a specific organization is released.

Algorithms for Managing Trading Risk and to Meet Regulatory Requirements In view of the sensitivity of risk management, there is a need for algorithms that track risk conditions expeditiously. Leveraging real-time analytics, algorithms can constantly re-estimate metrics such as Value-at-Risk (VaR) and automatically hedge a position if VaR is surpassed. Compliance with regulatory standards is critical. Firms would in future tap the advanced algorithmic trading to address regulatory compliance issues. Again, regulators would start to automate scrutiny to track trading operations.