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Annual Report 2014
Instituto per le Opere di Religione - Institute for Religious Works
May 25, 2015
https://www.ior.va/Portals/0/Content/Media/Documents/AnnualReports/gz7774eee497/IOR_AnnualReport_EN_2014.pdf
[with pdf]
A Business Review of 2014
a) Macroeconomic environment
The following gives an overview of the macroeconomic environment in 2014, with a particular focus on those markets and developments most relevant to explaining the IOR’s portfolio performance, given its conservative investment strategy.
Low inflation across developed economies became of particular concern in the Eurozone, raising fears that it might slide into Japan-style stagnation. In response, the European Central Bank (ECB) cut interest rates twice, initiated a programme of cheap four-year lending (TLTROs) and launched programmes to purchase covered bonds and asset-backed securities.
The divergence in monetary policy was clear: the Fed and Bank of England were expected to start raising interest rates over the next 12 months while the ECB and Bank of Japan (BoJ) remained firmly in easing territory. Emerging markets started to stabilise after their earlier volatility – but there was unease over the shadow banking sector in China. The world’s second-largest economy also showed signs of struggling to meet its government’s 7.5% GDP growth target for the year.
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