- Offworld Protein Chemistry: ISS Ring Sheared Drop Module astrobiology.com
- Crews Fill Day With Muscle, Heart, and Brain Research Before Cargo Mission Swap NASA (.gov)
- The ups and downs of life in space | On the ISS this week June 23 – 27, 2025 Yahoo
- Crew Videotapes, Photographs Station Activities and Hardware for Training and Inspection NASA (.gov)
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Offworld Protein Chemistry: ISS Ring Sheared Drop Module – astrobiology.com
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Q2 2025 Recap: Ophthalmology News and Updates
Ophthalmology has been on a tremendous rise in recent years, with developments on almost every front and new treatments for a slew of diseases. Upcoming therapies and groundbreaking technology have paved the way for attempts to lighten the treatment burden on patients by extending dosing intervals; a number of medications have exhibited efficacy outside of their expected field in ophthalmology; and trial successes have come hard and fast.
Q2 2025 followed many of these patterns, with the US Food and Drug Administration (FDA) handing out approvals to several critically important medications and companies worldwide announcing successful advancements on first-of-their-kind drugs. Niches were filled, treatment burdens were lessened, and alternative therapies were discovered. To mark the end of Q2 2025, HCPLive Ophthalmology created a recap of the biggest news from April to June 2025.
This recap collects 5 regulatory updates from the FDA, our 5 biggest trial announcement articles, and 3 critical insights from top experts featured prominently within our coverage.
Q2 2025 Regulatory Updates in Ophthalmology
FDA Issues Complete Response Letter to Aflibercept 8 mg for Extended Dosing
Announced on April 18, this CRL was specifically for parent company Regeneron’s proposed dosage extension up to 24-weeks. No safety or efficacy issues of aflibercept 8 mg in any of its approved dosing regimens or indications were found; the FDA disagreed instead with an attempt to extend dosing intervals longer than the current maximum of 16 weeks according to the label.
FDA Approves Prednisolone Acetate Ophthalmic Suspension for Ocular Inflammation
On June 12, 2025, the FDA approved the sterile, topical anti-inflammatory agent for the treatment of steroid-responsive ocular inflammation. The medication is a self-administered eye drop intended for use 2-4 times daily. In addition to this approval, parent company Amneal Pharmaceuticals announced a planned launch for the third quarter of 2025.
FDA Approves Acoltremon Ophthalmic Solution (TRYPTYR) for Dry Eye Disease
On May 28, 2025, the FDA approved acoltremon, a first-in-class transient receptor potential melastatin 8 channel receptor agonist which stimulates corneal sensory nerves, to treat dry eye disease. Both pivotal phase 3 trials, COMET-2 and COMET-3, displayed rapid onset and sustained tear production, as well as a substantial percentage of patients with a ≥10mm increase in unanesthetized Schirmer’s score across both trials compared to vehicle.
FDA Approves Susvimo for Treatment of Diabetic Retinopathy
Announced on May 22, 2025, this approval marked the third approved indication for Susvimo, along with diabetic macular edema. The medication was made available to US retina specialists from the day that parent company Genentech announced the FDA approval. Susvimo is now the first and only FDA-approved continuous delivery treatment able to maintain vision in people with diabetic retinopathy with only 1 refill every 9 months.
FDA Grants IND Clearance to Immunoglobulin Eye Drops for Dry Eye Disease
On May 21, 2025, the FDA granted Investigational New Drug clearance to Selagine, Inc.’s immunoglobulin drops, an anti-inflammatory and immunomodulatory biologic drug for the treatment of dry eye disease. Selagine and partner Grifols, one of the leading producers of plasma-derived medicines, expect that the IG drops will reach retail pharmacies in early 2029.
Q2 2025 Trial Announcements in Ophthalmology
VVN461 Trial Topline Results Announced for Non-Infectious Anterior Uveitis
Announced April 24, 2025, VivaVision announced that both VVN461-1.0% and VVN461-0.5% showed non-inferior efficacy against a prednisolone acetate comparator cohort in treating NIAU. Although VivaVision is based in China, the company has announced its intention to request a type C meeting with the FDA regarding phase 3 trials and an eventual BLA.
Pegcetacoplan Reduces Rate of Geographic Atrophy Growth, 1-Year Trial Data Shows
On April 23, 2025, 12-month results from the ongoing GALE open-label extension study indicated pegcetacoplan’s ability to reduce the mean rate of geographic atrophy growth. Initiated in response to positive results from the 2-year OAKS and DERBY trials of pegcetacoplan in patients with GA secondary to AMD, GALE is expected to significantly advance the evidence for the medication’s long-term safety and efficacy by its culmination.
Oral Zervimesine Reduces Geographic Atrophy Lesion Growth in Phase 2 Trial
Announced by Cognition Therapeutics on May 8, 2025, the phase 2 MAGNIFY trial resulted in oral zervimesine reducing lesion growth in patients with geographic atrophy secondary to age-related macular degeneration. Simultaneously being developed for Alzheimer’s and dementia with Lewy bodies, the once-daily oral pill may overcome the limitations of current treatment options, which require regular intravitreal injections.
Veligrotug Shows Durability for Thyroid Eye Disease in Phase 3 Trial Results
Long-term data announced on May 20, 2025, by Viridian Therapeutics, Inc. indicated the positive long-term durability of veligrotug in treating thyroid eye disease. Veligrotug, already granted the Breakthrough Therapy designation by the FDA prior, is also on track with its BLA planned for the second half of 2025.
Opthea Announces Termination of ShORe and COAST Trials of Sozinibercept
On April 2, 2025, Opthea announced the termination of their ShORe and COAST trials after sozinibercept failed to achieve vision improvement benchmarks in treating wet AMD. COAST failed on March 24, which led Opthea to accelerate topline data of the ShORe trial. However, when this trial also missed its benchmarks, Opthea shuttered the trials.
Q2 Expert Perspectives in Ophthalmology
Phase 2 LUNA Trial Results for Ixo-vec to Treat Neovascular AMD with Dante Pieramici, MD
Dante Pieramici, MD, assistant clinical professor of ophthalmology at the Doheny Eye Center in Southern California, discusses the results of the phase 2 LUNA trial of ixoberogene Soroparvovec intravitreal gene therapy for the treatment of neovascular age-related macular degeneration.
Changing Dosage Regimens in Patients with Diabetic Macular Edema, with Mark Barakat, MD
Mark Barakat, MD, founder and director of research at the Retina Macula Institute of Arizona, discusses his post-hoc analysis examining the shortening or extending of aflibercept 8 mg dosage for patients with DME through week 96 of the PHOTON trial.
Switching to Aflibercept 8 mg in Treatment-Experienced Patients with Ted Leng, MD
Theodore Leng, MD, Director of Clinical and Translational Research and Director of Ophthalmic Diagnostics at the Stanford University School of Medicine, discusses the process of switching to aflibercept 8mg from other anti-VEGF agents in patients with neovascular age-related macular degeneration.
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Scooter Braun Exits CEO Role at HYBE, Settles With Justin Bieber
Scooter Braun is transitioning his role at HYBE, the South Korean entertainment giant, moving from CEO of HYBE America to an advisory position which will have him joining the HYBE Board of Directors as a director and a senior advisor to chairman and CEO Bang Si-Hyuk. The move marks the end of a five-year run at HYBE, which is home to such K-pop acts as BTS and Katseye.
The news was announced to HYBE staffers on Monday when Braun, dialing in from David Geffen’s yacht where he is vacationing, notified employees that the move was “in the works for quite some time,” according to a source who adds that the five-year plan was initiated with the sale of Braun’s Ithaca Holdings to HYBE in 2021. Braun will remain active in current HYBE projects, like the just-launched girl group Katseye. Braun intimated that he “isn’t going anywhere” and will “still help guide” the artists on the HYBE roster. During the call, Braun shared with the staff that, when he set out for a career in music 25 years ago, it was after reading the Geffen biography The Operator. Today, as he closes this chapter of his career, he reminded his colleagues of what he’s learned from Geffen: “Follow your dreams and anything can happen.”
Braun built his business managing music artists like Justin Bieber, Ariana Grande, J Balvin, Demi Lovato and The Kid LAROI under the SB Projects banner. In 2024, he stepped away from the management business, announcing his decision on social media, where he noted, “I have been blessed to have had a ‘Forrest Gump’-like life while witnessing and taking part in the journeys of some of the most extraordinarily talented people the world has ever seen. I’m constantly pinching myself and asking ‘how did I get here?’”
The exit from management coincided with a split from Bieber which turned contemptuous, as THR reported in April, due to financial consequences triggered by the cancelation of Bieber’s Justice tour in 2022. In not fulfilling his contractual obligation to AEG (the tour’s promoter) and completing the concert dates, for which he received a $40 million advance, Bieber was left owing more than $20 million to AEG. Then-manager Braun, through his company, covered what was owed in the form of a loan at a highly favorable (to Bieber) rate. In addition, the two were partnered in a number of other businesses including a record label and film projects. Braun also helped secure a $200 million catalog deal for Bieber’s songwriting interests, possibly the largest nest egg in music history for an artist under 30. (Worth noting: Hailey Bieber, who married Justin in 2018, recently sold her Rhode Beauty skincare brand to e.l.f. Beauty for $1 billion; Braun was a seed investor.)
THR has learned that a settlement between Braun and Bieber is now completed. “Scooter and Justin squashed their issues and are in a good place,” says a source who adds that Braun’s last act at HYBE was to close the book on the squabble and “leave the company, and Justin, in a good position.”
Reps for Bieber declined to comment on the settlement.
Stepping into the CEO position in Braun’s place and leading all day-to-day duties is Isaac Lee, who has been chairman of HYBE Latin America since November of 2023. Lee’s new title is chairman and CEO of HYBE Americas. In addition to running HYBE’s operations in Mexico, Miami, and Medellin, Lee will also have oversight of Nashville-based Big Machine Label Group (BMLG) and Quality Control Media Holdings, headquartered in Atlanta.
While Braun’s next move is unclear, HYBE chief Bang Si-Hyuk commented, “Scooter has been an extraordinary partner, a visionary executive, and a true catalyst for cultural exchange. His contributions have been vital in establishing our ambitious presence in the U.S. market. I am deeply grateful for his leadership, his astute instincts and his unwavering passion for artists. We wish him immense success in his exciting next chapter and look forward to continuing our partnership in executing HYBE’s global vision.”
Braun also remains one of HYBE’s largest individual shareholders. In announcing his new role, Braun said: “Being a part of HYBE and witnessing its remarkable growth has been one of the most inspiring chapters of my professional journey. Chairman Bang is a true visionary and a musical genius. What he has built with HYBE is unparalleled. I am incredibly proud of our collective accomplishments and look forward to supporting Chairman Bang and CEO Jason Jaesang Lee in their continued success as I step into what’s next.”
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An inside look at Meta’s transition from C to Rust on mobile
Have you ever worked is legacy code? Are you curious what it takes to modernize systems at a massive scale?
Pascal Hartig is joined on the latest Meta Tech Podcast by Elaine and Buping, two software engineers working on a bold project to rewrite the decades-old C code in one of Meta’s core messaging libraries in Rust. It’s an ambitious effort that will transform a central messaging library that is shared across Messenger, Facebook, Instagram, and Meta’s AR/VR platforms.
They discuss taking on a project of this scope – even without a background in Rust, how they’re approaching it, and what it means to optimize for ‘developer happiness.’
Download or listen to the episode below:
You can also find the episode wherever you get your podcasts, including:
The Meta Tech Podcast is a podcast, brought to you by Meta, where we highlight the work Meta’s engineers are doing at every level – from low-level frameworks to end-user features.
Send us feedback on Instagram, Threads, or X.
And if you’re interested in learning more about career opportunities at Meta visit the Meta Careers page.
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Jennifer Aniston to Lead ‘I’m Glad My Mom Died’ Series at Apple TV
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Jennifer Aniston has lined up another series at Apple TV+.
The star and executive producer of The Morning Show will lead a series inspired by Jennette McCurdy’s memoir I’m Glad My Mom Died at the streamer. McCurdy is adapting her book alongside Ari Katcher (Ramy, Jerrod Carmichael Reality Show), and the two will serve as co-showrunners. Aniston is also an executive producer.
Former iCarly star McCurdy’s book, details the relationship she had with her abusive mother and the road to recovery she took following her mother’s death in 2013. I’m Glad My Mom Died became an instant bestseller after it was published in 2022.
“I’ve been so touched by how much the emotional thrust of the story has connected with people, which I see as being my relationship with my mom,” McCurdy told The Hollywood Reporter soon after the book was released. “That’s an important and complicated relational dynamic to explore, and to see that people are responding to it has been amazing. And to see people responding to the humor of it and the aspect of exploring eating disorders and complicated grief, it’s really been incredible.”
The series is described as a dramedy that will center on “the codependent relationship between an 18-year-old actress in a hit kids’ show, and her narcissistic mom who relishes in her identity as a starlet’s mother,” the show’s logline reads. Aniston will play the mother.
Aniston also has the fourth season of The Morning Show on deck at Apple TV+. The series is set to return Sept. 17, with a two-year time jump following the events of season three in 2023.
Apple Studios is producing the series based on I’m Glad My Mom Died. McCurdy and Katcher are co-showrunners and will executive produce with Aniston (via her Echo Films); Sharon Horgan and Stacy Greenberg of Merman Productions; Dani Gorin, Tom Ackerley and Josey McNamara of LuckyChap; and Jerrod Carmichael and Erica Kay.
Aniston is repped by CAA, Lighthouse Management & Media and Hansen Jacobson; McCurdy,by CAA, Jill Fritzo PR and Hansen Jacobson; Horgan, by United Agents in the U.K. WME in the U.S. and Nelson Davis; LuckyChap, by Entertainment 360, CAA, Narrative and attorney Jeff Bernstein; Katcher, by WME, Entertainment 360, and Ziffren Brittenham; and Carmichael, by WME, Entertainment 360 and Johnson Shapiro.
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US set new record with 21 commercial launches in June, FAA says
Private spaceflight continues its upward trajectory.
American companies launched 21 commercial space missions in June 2025, which was a new record for a single month, according to the Federal Aviation Administration (FAA).
The old record of 20 was set in November 2024.
“Operations during the record month include 21 launches conducted by four operators: Blue Origin, Rocket Lab, SpaceX and United Launch Alliance,” FAA officials said in an emailed statement.
“These occurred in California, Florida, Texas and New Zealand, and involved orbital, suborbital and commercial human spaceflight missions,” they added. (California-based Rocket Lab’s primary launch site is on New Zealand’s North Island.)
SpaceX was by far the busiest of the four operators, launching 15 of the month’s 21 missions. Twelve of those 15 flights were devoted to building out the company’s Starlink broadband megaconstellation in low Earth orbit.
June continued a very active 2025 for SpaceX, which has launched 81 missions so far this year. The company is therefore on pace to break its single-year record of 134 orbital liftoffs, which was set in 2024. (Those numbers don’t count the suborbital test flights of SpaceX’s new Starship megarocket, which launched four times in 2024 and has flown three times so far this year.)
SpaceX was also responsible for one of June’s two human spaceflight missions — Ax-4, which sent four private astronauts toward the International Space Station on June 25.
The month’s other crewed mission was NS-33, a suborbital tourist flight by Blue Origin that launched and landed on June 29.
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Threads launches its own DM inbox, as app moves further away from Instagram
Instagram Threads is rolling out users’ most-requested feature to date: the ability to message people directly, without having to switch to another app, like Instagram. The company said direct messages (DMs) will begin rolling out to users globally beginning on Tuesday, alongside a new visual element called highlighter.
The latter will emphasize interesting perspectives and conversations, Meta says, starting with Trending Topics.
At launch, Threads DMs offer a basic set of features. They’ll support one-on-one chats, preset emoji reactions, the ability to report spam, and mute DMs (as on Instagram). Other features, like group messaging, inbox filters, and more advanced message controls, will arrive in a later release.
That means today, you can’t block a follower or mutual from messaging you — you can only block them on Threads, which will also block them on Instagram. To control who can message you, you have to choose whether or not you follow the user.
At launch, DMs will be available in most markets where Threads is available, except for Japan, Australia, the U.K., and the E.U.
With the addition of DMs, Threads becomes more competitive with other text-first social apps like X and Bluesky, where users can engage with one another directly or even in group chats, as in X’s case.
However, while X is working on encrypted direct messages within X Chat, Threads has no intention of tightly securing its private messaging feature.
Image Credits:Meta/Threads “We’re not encrypting our DMs,” said Emily Dalton Smith, Threads VP of Product. “It’s really about just connecting directly and talking to people about whatever is happening now, which I think makes encryption less core to the experience.”
Instead, she said that DMs are meant to build on the community people have created in the public space on Threads — a network that’s shaping up to be entirely different from its parent app, Instagram, Smith pointed out.
Image Credits:Meta/Threads “One thing that’s been particularly exciting is that we have seen that people are building their own graphs on Threads,” she said. “They’re building up what we think of as an interest graph that is new and distinct from the social graph that underlies their account on Instagram.”
Despite having been built on top of Instagram’s social graph, over a third of the people who come to Threads daily have less than a 50% overlap between their Instagram connections and Threads connections, Meta said.
“Instagram is really for creativity and Threads is really for perspectives,” Smith noted.
The company also found that users are following different sets of people across the two apps, Instagram and Threads, and are engaging in different interests and conversations.
Because of this growing disconnect between the apps, Meta aims to test other ways for people to use Threads without an Instagram account.
For instance, it’s testing the ability for users to log in with their Facebook account in Europe or create a Threads-only account. It’s also testing the ability to use Threads from the web while not logged in at all.
Image Credits:Meta/Threads The Threads creator community is unique, too. Although it may include those who are popular creators on other platforms, some have become creators on Threads itself. One example is David Rushing, a passionate fan who built up the NBA Threads community.
Smith said Threads would like to make it easier for its users to find communities like this and others, and this is an important part of the app’s upcoming roadmap.
On this front, Threads initially introduced tags (like hashtags without the hash # symbol) to organize conversations. It then created topic feeds so you could see everything that was being discussed around that area of interest. Now, the focus will be on identifying the people who are active and top contributors within a community.
Threads expects to show more suggested users to follow in search and recommendations over the next couple of months, Smith said.
The new highlight feature could also help here.
While today, the feature will highlight trending topics related to the content you are reading while scrolling your For You feed, over time, Threads could highlight perspectives from users or active conversations that you might want to jump into, including within various topic feeds.
There are currently no other plans to monetize Threads beyond ads, Smith confirmed, even though Meta has an AI feature that could be integrated into the experience the way xAI’s AI chatbot, Grok, is used to sell X Premium subscriptions.
Instead, Meta is first focused on getting ads right, while using AI to power things in the background, like trending topics’ headlines and summaries, for instance.
That doesn’t mean the team will rule out AI features further down the road.
“We consider, probably, all ideas,” Smith said, “but we’re really just building on what our community tells us and trying to prioritize such a small and growing app.”
Threads is not small, to be clear; the app has 350 million monthly active users, far more than newcomers like Bluesky, which has 37 million registered users. But compared with Meta’s family of apps, where user bases are counted in billions, Threads still has much to prove to its corporate parent.
Ahead of the global launch, DMs were tested earlier this month in a few markets, including Hong Kong, Thailand, Argentina, and Brazil.
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Pakistan PM visits Iranian embassy, assures continued support following Israeli attacks
Pakistan looking to sell excess LNG amid supply glut curbing local gas output — document
KARACHI/SINGAPORE: Pakistan is exploring ways to sell excess liquefied natural gas (LNG) cargoes amid a gas supply glut that could cost domestic producers $378 million in annual losses, according to a presentation and a government official familiar with the matter.
The country has at least three LNG cargoes in excess that it imported from top supplier Qatar and has no immediate use for, and is currently selling natural gas at steep discounts to local users, a second government official said.
Power generation from gas-fired power plants, which has historically accounted for a lion’s share of LNG use in the country, has declined for three straight years ended 2024, with cheaper solar power use dramatically gaining at the expense of gas-fired generation, data from energy think-tank Ember showed.
That has forced domestic producers of the fuel to curb production.
Pakistan is currently exploring the possibility of transferring LNG cargoes to rented tankers for “offshore storage and onward sale,” state-owned oil and gas producer OGDCL said in a presentation to industry and government.
“Excess LNG in the gas network has resulted in significant production operations impact for local exploration and production companies over last 18 months,” OGDCL said, adding that it had forced curtailment of domestic supply.
The domestic industry could suffer $378 million in losses over the next 12 months at the current rate of curtailment, according to the presentation dated May 29 reviewed by Reuters.
It is not immediately clear if Pakistan’s long-term LNG import contracts with QatarEnergy allows for a resale of cargoes. One of the government officials said the country was still exploring ways to do it.
Qatar typically has a destination clause in long-term supply contracts with buyers that restrict where the cargoes can be sold.
QatarEnergy did not immediately respond to a request seeking comment.
Pakistan has already deferred five contracted LNG cargoes from Qatar without financial penalty, shifting delivery from 2025 to 2026, as the country grapples with surplus capacity.
Pakistan’s petroleum minister Ali Pervaiz Malik declined to comment on the presentation, but said renegotiating contracts with Qatar was a “complex” process that could take at least a year, and a final decision on initiating it had yet to be made.
“While the existing contract with Qatar allows Pakistan to decline vessels, doing so incurs penalties and other complications,” Malik told Reuters.
The glut has stemmed from several gas-fired power plants, previously operating under must-run contracts, now being sidelined, Malik said.
“It was expected that summer season will create extraordinary demand but the trend indicates the opposite,” OGDCL said in the presentation.Continue Reading
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Winter sport athletes chasing Olympic medals at Milano Cortina 2026
Steven Dubois – short track speed skater
Where better to start than four-time world champion short track speed skater, Steven Dubois, who headed off to Japan at the end of last season for quite the trip.
Diving in spectacular but frigid waters that left him trembling with cold, taking in the thrum of iconic cityscapes, and posting food photos, lots of food photos, Dubois enjoyed his well-earned break in April after… oh we’re sorry, did we forget to mention it, after winning all four of the titles at one world championships, and in the edition before the next Olympic Winter Games to boot.
So yes, the lengthy break was clearly well-deserved after a mammoth 2024-25 season for the Quebec native, especially as he’ll likely feel a shift in focus toward him in Italy, after the retirement of compatriot and six-time Olympic medallist, including four gold, Charles Hamelin.
Winning Olympic gold in the 5000m relay alongside Hamelin, Maxime Laoun, and Pascal Dion, Dubois also won individual silver in the men’s 1500m, and bronze in the 500m, so looks to have picked up the mantle for short track excitement for Canada with ease.
But perhaps it’s no surprise Dubois has gone dark since his trip to the Far East, with no content posted on Instagram since April, as he goes into stealth mode with training ramping up.
It’s possibly also unnerving for his fellow competitors as all of them target being at the Milano Ice Skating Arena for the start of the Olympic short-track speed skating event on 10 February.
But qualification comes first.
Based on the ISU Short Track World Tour competitions, which determine the Special Olympic Qualifying Classifications (SOQC) in 2025, the three best results out of four of the ISU Short Track World Tour competitions will decide the quotas for the SOQC over the respective distances.
The first takes place in Montreal from 16 to 19 October, with many an eye likely trained on the favourite for mutliple events, Dubois.
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The risks of funding states via casinos
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Invest long, borrow short and leverage up as much as possible. That is the way to make money in finance. It is how banks have always made their living. But we also know very well that this story can end in panic-stricken runs for the exit and financial crises. That is what happened in the great financial crisis (GFC) of 2007-09. Since then, as the Bank for International Settlements explains in its latest Annual Economic Report, the financial system has changed a great deal. But this central characteristic has not.
Moreover, notes Hyun Song Shin, economic adviser to the BIS, “despite the fragmentation of the real economy, the monetary and financial system is now more tightly connected than ever”. If this sounds like an accident waiting to happen, you are quite right. Central banks must be prepared to ride to the rescue.
The story the BIS tells is an intriguing one. Thus, the aftermath of the GFC did not make the system fundamentally different. It just changed who was involved. In the run-up to the crisis, the dominant form of lending was to the private sector, particularly in the form of mortgages. Afterwards, lending to the private sector levelled off, while credit to governments exploded. The pandemic accelerated that tendency.
That was not surprising: if people want to save and lend, someone else has to borrow and spend. That is macroeconomics 101. In addition to the change in direction came a change in intermediaries: in place of the big banks have come global portfolio managers. (See charts.)
As a result, cross-border bond holdings have increased enormously. What matters here are changes in gross, not net, holdings. The latter are relevant to long-term sustainability of macroeconomic patterns of saving and spending. The former are more relevant to financial stability, because they drive (and are driven by) changes in financial leverage, notably cross-border leverage. Moreover, notes Shin, “the largest increases in portfolio holdings have been between advanced economies, especially between the US and Europe”. The emerging economies are relatively less involved in this lending.
How then does this new cross-border financial system work? It has two fundamental characteristics: the leading roles of foreign currency swaps and non-bank financial intermediaries.
The biggest part of this cross-border lending consists of the purchase of dollar bonds, particularly US Treasuries. The foreign institutions buying these bonds, such as pension funds, insurance companies and hedge funds, end up with a dollar asset and a domestic currency liability. Currency hedging is essential. The banking sector plays a key role, by enabling the market for foreign exchange swaps, which provide these hedges. Moreover, a forex swap is a “collateralised borrowing operation”. Yet these do not appear on balance sheets.
According to the BIS, outstanding forex swaps (including forwards and currency swaps) reached $111tn at the end of 2024, with forex swaps and forwards accounting for some two-thirds of that amount. This is vastly more than cross-border bank claims ($40tn) and international bonds ($29tn). Moreover, the market’s largest and fastest-growing part consists of contracts with non-dealer institutions. Finally, some 90 per cent of forex swaps have the dollar on one side of the transaction and over three-quarters have a maturity of less than one year.
As the BIS notes, this highly non-transparent set of cross-border funding arrangements also affects the transmission of monetary policy. One of the propositions it makes is that the greater role of non-bank financial intermediaries, notably hedge funds “may have contributed to more correlated financial conditions across countries”. Some of this is quite subtle. Given the large-scale foreign ownership of US bonds, for example, conditions in the owners’ home markets can be transmitted to the US. Again, exchange rate movements that affect the dollar value of holdings of emerging market debts can trigger adjustments in their domestic prices.
What are the risks in this new system of finance? As has been noted, banks are active in the market for forex swaps. They also provide much of the repo financing for hedge funds speculating actively in the bond market. Moreover, according to the BIS, over 70 per cent of the bilateral repo financing from banks is at zero haircut. As a result, lenders have very little control over the leverage of the hedge funds active in these markets. Not least, non-US banks are active in providing dollar funding for firms engaged in these markets.
What does all this imply? Well, we now have tightly integrated financial systems, especially among high-income countries, even as the countries are moving apart, politically and in terms of their trade relations. Moreover, much of the funding is in dollars on relatively short maturities. It is easy to imagine conditions in which funding dries up, perhaps in response to large movements in bond yields or some other shock. As happened in the GFC and the pandemic, the Federal Reserve would have to step in as lender of last resort, both directly and via swap lines to other central banks, notably those in Europe. We assume that the Fed would indeed come to the rescue. But can that be taken for granted, especially after Jay Powell is replaced next year?
The system the BIS elucidates has much of the fragility of traditional banking, but even less transparency. We have a vast number of unregulated businesses taking highly leveraged positions, funded on a short-term basis, to invest in long-term assets whose market values may vary substantially even if their capital values are ultimately safe. This system demands an active lender of last resort and a willingness to sustain deep international co-operation in a crisis. It should work. But will it?
martin.wolf@ft.com
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