Paul Donovan of UBS Kicks Off the Second Day of Risk Management

Paul Donovan Managing Director, Global Economics from UBS was the keynote speaker kicking off the second day of the CBOE Risk Management Conference.

Some highlights from his speech –

  • He is projecting 3.0% GDP growth for the US in 2014 which would be the first above trend since the financial crisis.
  • Donovan projects that tapering will probably begin in January of next year.
  • He noted that America is a more cash based society than it was before 2008.
  • The impact of tapering will be higher bond yields – global bond yields are highly correlated so this is a global issue.
  • The Eurozone is experiencing flat bank lending which will be a drag on economic growth in the future.
  • He believes that Japan will continue to print money and expand the Bank of Japan’s balance sheet.
  • China is the only one of the BRICS that matters as it is the only one of the four countries that has expanded their share of global GDP.
  • There is a People’s Congress meeting in China in November to set policy which could be a game changer depending on the outcome.