German prosecutors raid Deutsche Bank in 'greenwashing' probe

German prosecutors raided Deutsche Bank offices in Frankfurt on Tuesday as part of a probe into allegations that the financial institution was marketing investment products as "greener" than they actually were.

Investigators were carrying out raids "on suspicion of investment fraud" at the offices of the bank and its asset management subsidiary DWS, Frankfurt prosectors said in a statement.

The searches related to "greenwashing accusations" at DWS, Deutsche Bank said in a statement.

DWS said it would "work together with all relevant regulators and authorities", according to the statement.

The accusations were based on "statements made by a former DWS employee" who became a whistleblower for US securities regulators in 2021, the prosecutors said.

Investigators had found "sufficient indications" that ESG (environmental, social and governance) standards were only taken into account "in a minority of investments" contrary to information in DWS's "sales prospectus", they said.

The probe was targeting "as yet unknown" employees at DWS, prosecutors said.

The asset manager is already under investigation by federal prosecutors in the US on suspicion of lying about the scale of their green investments.

ESG products have become a major asset class as financial institutions seek to bring their portfolios in line with global climate targets.

US securities regulators last week put forward proposals to tighten disclosure requirements on the rising number of ESG investments.

Seeking to address the problem of "greenwashing", the Securities and Exchange Commission said the measure was meant to avoid cases where a fund "could exaggerate its actual consideration of ESG factors."

Agence France-Presse

JPMorgan CEO Dimon sees US economic boom through 2023

NEW YORK - JPMorgan Chase & Co Chief Executive Officer Jamie Dimon said on Wednesday the United States could be in store for an economic boom through 2023 if more adults get vaccinated and federal spending continues.

"I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE (quantitative easing), a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom," Dimon wrote in his annual letter to shareholders published on the bank's website.

"This boom could easily run into 2023 because all the spending could extend well into 2023."

As head of the biggest US bank, Dimon is widely seen as the face of America's banking sector, and he used the letter to share his views on the country's economic health and to press for policies to help address inequality and improve the criminal justice system.

The average US consumer's finances are in "excellent shape," Dimon said, and the stock market's high valuations are justified. The price of US treasuries, however, are not, he wrote.

The economic growth Dimon projects the United States could see in the next two years will create opportunities to "deal with issues stemming from inequality," Dimon wrote.

He called for raising the federal minimum wage, improving training for jobs at high schools and colleges and making it easier for people with criminal records to get jobs.

Dimon, who has called for higher taxes to pay for federal stimulus, said corporations could support many of these initiatives if the government adopted rigorous budgeting, transparency and discipline when it comes to its spending.

"We must remember that the concepts of free enterprise, rugged individualism and entrepreneurship are not incompatible with meaningful safety nets and the desire to lift up our disadvantaged citizens," Dimon wrote. (Reporting By Elizabeth Dilts Marshall; Editing by Muralikumar Anantharaman)

-reuters-

Goldman Sachs earnings surge amid pandemic upheaval

NEW YORK - Goldman Sachs reported another blowout quarter Tuesday to conclude a highly profitable 2020 despite the coronavirus pandemic, which provided lucrative opportunities to the investment bank while battering much of the US economy.

Goldman's profits soared to $4.4 billion in the final quarter of the year, more than double the earnings from the same period a year ago, as it scored higher revenues in all four operating divisions and easily topped analyst estimates.

The just-ended quarter showed a continuation of the heady trends from Goldman's third quarter: more strength in equity and fixed-income trading amid financial markets volatility and huge growth in financial advising revenues as corporate clients pursued mergers or raised equity against a fast-changing macroeconomic backdrop.

And amid coronavirus-induced restrictions on movement, the financial giant saw lower travel and entertainment costs.

Chief Executive David Solomon praised the company's performance, but cautioned that the outlook for the global economy remains dependent on getting Covid-19 under control with a successful vaccination campaign.

"I urge political leaders at all levels and across all jurisdictions to do everything possible to implement a coordinated and comprehensive distribution plan," Solomon said during an earnings conference call. 

"In its absence, economic recovery will be unnecessarily delayed."

Several key economic sectors remain in deep trouble due to the prolonged downturn, including energy, airlines, hospitality and commercial real estate.

EYEING MAIN STREET GROWTH

Goldman enjoyed especially strong growth in fourth quarter revenues in investment banking, up 27 percent, and global markets, up 23 percent.

Overall revenues rose 18 percent from the year-ago period to $11.7 billion.

For all of 2020, Goldman Sachs reported profits of $8.9 billion, up 13 percent, on a revenue increase of 22 percent to $44.6 billion.

Goldman's results came on the heels of a series of mixed earnings releases Friday from rival financial heavyweights JPMorgan Chase, Citigroup and Wells Fargo.

Bank of America on Tuesday reported fourth-quarter earnings of $5.2 billion, down 23 percent from the year-ago period on a 10.5 percent drop in revenues.

Like JPMorgan and others that reported last week, Bank of America's results were boosted by an $828 million reserve release after earlier provisions for bad loans from coronavirus were not needed. 

However, Bank of America suffered a 16 percent drop in net interest income due to lower interest rates.

Goldman, which has a much smaller consumer-oriented business than those other large banks, ended up with a net increase in provisions for credit losses of $293 million, citing the need for reserves for credit card loan growth.

Goldman Sachs has been building up its consumer-oriented Marcus business since 2016, and Solomon indicated plans to continue to invest in the venture.

Goldman is getting ready to launch a new investment platform on Marcus that will permit individuals to put in as little as $1,000 through Goldman programs on asset allocation and exchange traded funds. 

Goldman is also preparing a new digital checking offering for later this year, Solomon said.

Solomon reiterated that Goldman is intent on building Marcus into a long-term business and will set the bar "extremely high" on acquisition targets.

Solomon said additional investments in the venture could delay the targets for the consumer business to reach profitability, but would not affect firm-wide financial targets.

Goldman shares fell 2.3 percent to $294.20 in early afternoon trading, while Bank of America fell 0.7 percent to $32.77. 

Analysts attributed the sell-off in part to a rise of more than 30 percent in leading bank shares in the prior two and a half months.

Agence France-Presse

Google to integrate bank accounts in payments app

SAN FRANCISCO - A Google bank account?

The internet giant said Wednesday it would be partnering with commercial banks and credit unions starting next year to allow users to manage mobile-based accounts through the Google Pay platform, in the latest move by tech giants into consumer finance.

"People do almost everything on their phones today, but for many, the way they save, pay and engage with their bank has remained unchanged," said Caesar Sengupta, vice president of Google Payments.

"That’s why we’re working with trusted financial institutions to create Plex, a new mobile-first bank account integrated into Google Pay."

The Plex Accounts for US consumers will be offered with no monthly fees, overdraft charges or minimum balance requirements, according to Google, which said 11 banks and credit unions were participating.

Google at the same time said it was updating its Google Pay app to help users better organize payments to people and businesses.

"Instead of showing a stack of cards or a long list of transactions, the new Google Pay app focuses on the friends and businesses you transact with most frequently," Sengupta said.

The initiative comes with tech giants moving deeper into personal finance with person-to-person payments and co-branded credit cards

Apple recently launched its own branded credit card with Goldman Sachs which integrates into its Apple Pay application. Amazon, which has its own branded credit card, has discussed offering its own checking accounts but has not followed through with the plan.

Agence France-Presse

JPMorgan Chase asks some managers to return to the office

NEW YORK - JPMorgan Chase, the largest US bank, has asked the heads of its sales and trading units to return to the office by September 21, a person familiar with the plans said Thursday.

The announcement was made during a telephone conference call with the team leaders of those units, many of whom have already returned to the bank's downtown offices, the source told AFP.

JPMorgan Chase CEO Jamie Dimon has spent most of the summer in the New York City office.

The bank's request however is addressed to the heads of these divisions, not to all employees.

JPMorgan plans to be flexible with people who have to manage childcare problems, as many area schools have moved partially or entirely to online courses.

They also will be flexible with employees who are at high risk of exposure to the novel coronavirus, or live with someone at high risk.

JPMorgan plans to monitor the pandemic in each city and location where it operates and adjust to changing circumstances.

The bank believes that having these employees in the office strengthens culture, creates a more cohesive work environment and is important for training newcomers.

Contacted by AFP, JPMorgan Chase declined to comment on the changes, first reported by the Wall Street Journal.

The activities of JPMorgan, as well as all of Wall Street's major financial institutions, were seriously disrupted earlier in the year when the Covid-19 pandemic began to spread, especially affecting New York City.

Many employees opted for teleworking while others have been relocated to emergency sites.

This did not prevent the Wall Street giant from posting record profits in the second quarter of 2020 thanks especially to brokerage and investment banking activities.

Agence France-Presse

European stocks, oil surge as central banks respond to virus

LONDON - European stock markets and oil prices surged Tuesday and most Asian indices finished higher after Wall Street rocketed, fuelled by hopes of a concerted global response to the deadly coronavirus.

The Japanese yen, seen as a haven investment, pared back recent strong gains versus the dollar.

Pledges of action from central banks and a planned conference call between Group of Seven financial chiefs provided a much-needed boost after last week's hammering to equities that saw major global stock markets lose around 12 percent in value.

"European stocks are following their US and Asian counterparts higher... as hopes of a global stimulus push helped lift market sentiment," commented Joshua Mahony, senior analyst at IG trading group.

Tuesday's positive sentiment filtered through to oil markets, where prices jumped around 3.5 percent with dealers betting on major producers cutting output to address a predicted plunge in crude demand.

On stock markets, Shanghai and Sydney closed up 0.7 percent, while Seoul put on 0.6 percent. Tokyo, however, fell 1.2 percent. 

Around 1100 GMT, London's benchmark FTSE 100 index was up 2.4 percent, around levels seen in Paris and Milan, while Frankfurt jumped 3.0 percent.

Traders were given a strong lead from Wall Street's best session in more than a year on Monday, with the Dow soaring more than five percent and the S&P 500 and Nasdaq piling on around 4.5 percent.

After last week's rout, investors returned to buying as central banks from the US, Japan and Europe said they were ready to provide support with monetary easing such as interest rate cuts and cash injections to financial markets.

The US Treasury also announced that Secretary Steven Mnuchin and Federal Reserve chief Jerome Powell will lead a conference call with their G7 counterparts Tuesday on how to respond to the virus.

Ahead of the call, Australia cut borrowing costs to a record low 0.50 percent and indicated it was ready to provide more help, making it the first major economy to take such measures.

Malaysia also announced a cut on Tuesday.

The Bank of England will meanwhile "take all necessary steps" to support the UK economy from coronavirus fallout, said governor Mark Carney.

"The Bank of England's role is to help UK businesses and households manage through an economic shock that could prove large but will ultimately be temporary," Carney said.

The deadly outbreak has impacted economies, with an index of Chinese factory activity falling to a record low last month, while a US survey of manufacturers came in below forecast, with expectations of worse to come.

And with demand for crude tipped to take a battering -- particularly from crucial consumer China -- OPEC will hold an extraordinary meeting Thursday with other producers, led by Russia, to weigh its response.

The disease that began in China has killed more than 3,100 people and infected more than 91,000, though the Asian nation has reported its lowest number of new cases in six weeks.

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Yen, euro gain on dollar as Fed rate cut talks heat up

TOKYO -- The yen and the euro rose against the dollar on Monday on growing expectations that the US Federal Reserve will cut interest rates at its policy review this month to protect the economy from the rapid spread of the coronavirus.

As US shares were routed in recent days, Federal Reserve Chair Jerome Powell said on Friday the central bank will "act as appropriate" to support the economy in the face of risks posed by the coronavirus epidemic.

Investors took his comments as a hint that the Fed will cut interest rates by at least 0.25 percentage point at its next scheduled meeting on March 17-18.

There is even increasing chatter of an unscheduled move, with a US bank lobby economist saying a coordinated global interest rate cut by the top central banks could happen as early as on Wednesday.

The expectations around the Fed underscored the speed and scale of the virus' spread from China through to dozens of countries and the potentially crippling blow to the global economy.

Investors expect the dollar's yield advantage - a key support for the US currency - to shrink as the European Central Bank and the Bank of Japan are seen having limited room for further cuts given their rates are already in negative territory.

The yen rose to as high as 107 to the dollar in early Monday trade and last stood at 107.75 yen, up 0.3 percent from its levels in New York late on Friday.

The Japanese currency had risen 3.2 percent last week, the biggest gain since July 2016. Japan's current account surplus and the yen's vast liquidity make the yen behave like safe haven asset.

The euro stood at $1.1042, up 0.14 percent so far in Asia, trading near its highest level in almost a month after a 1.7 percent gain last week, the largest in two years.

The common currency's rise stemmed from unwinding of so-called euro carry trade, in which speculators borrow the euro to invest in higher-yielding currencies, market players said.

The safe haven Swiss franc also hit 1-1/2-year high of 0.9610 franc per US dollar on Friday and last stood at 0.9642.

Underscoring investors' concerns, China's official Purchasing Managers' Index (PMI) fell to a record low of 35.7 in February from 50.0 in January, the National Bureau of Statistics said on Saturday, showing factory activity contracted at the fastest pace ever.

"The data showed the severity of the damage from the coronavirus. If upcoming data undershoots market expectations, that will weigh on sentiment further," said Kyosuke Suzuki, director of currency trading at Societe Generale.

The offshore yuan slipped only slightly to 6.9840 yuan per dollar, down about 0.17 percent in early Asian trade, off Friday's high of 6.9777, its highest since Feb. 17.

But the Australian dollar, often used as a liquid proxy on China, lost 0.34 percent to $0.6485, down 0.34 percent having hit a 11-year low of $0.64345 on Friday.

The New Zealand dollar was also on the defensive after sliding to a decade low of $0.6180 last week. It last traded at $0.6218, down 0.46 percent.

Selling spread to some emerging market currencies.

The Mexican peso and the South African rand both lost more than 1 percent in early Monday trade.

The Turkish lira, which has been weighed by the country's intensifying involvement in fighting in Syria, slipped a tad to record lows.

Among developed market currencies, the pound is seen more vulnerable than its peers at time of major economic crisis as UK's sizable current account deficit meant the country depends on foreign capital.

Investors are also fretting about Britain's negotiations with the European Union over a trade deal and whether a UK budget next month will include much more spending, which many investors say is necessary to boost economic growth.

Sterling traded at $1.2799, down 0.15 percent so far on the day, not far from its 4-1/2-month low of $1.2726 hit on Friday.

The pound stood near its lowest levels since October against the euro and the yen.

source: news.abs-cbn.com

China cuts loan rate as it battles coronavirus impact

BEIJING - China on Thursday announced it would cut interest rates in a bid to boost the economy, as it battles the economic fallout of the new coronavirus outbreak.

The reduction in the loan prime rate (LPR) -- one of the preferential rates commercial banks impose on their best customers and which serves as a reference for other lending rates -- is the latest measure to help companies struggling through the epidemic.

The one-year LPR was lowered to 4.05 percent from 4.15 percent, the People's Bank of China (PBoC) said in a statement.

The five-year LPR -- on which many lenders base their mortgage rates -- was also lowered to 4.75 percent from 4.8 percent. 

The LPR, released on the 20th day of every month, is based on rates of the central bank's open market operations, especially medium-term lending facility rates.

The rate reduction comes as Beijing battles to control a virus epidemic that has infected over 74,500 people in the country.

The outbreak is threatening to put a dent in the global economy, with China paralyzed by vast quarantine measures and major firms such as iPhone maker Apple and mining giant BHP warning it could damage bottom lines.

The central bank said earlier this month it would offer a 300-billion-yuan ($43-billion) boost to help businesses involved in fighting the epidemic.

Julian Evans-Pritchard of Capital Economics said the rate cut would "help companies weather the damage from the coronavirus at the margins".

But he said the ability of firms to postpone loan repayments and access loans on preferential terms would be more important in the short-term.

"We expect the People's Bank to continue loosening monetary conditions in the coming weeks, especially given signs that the coronavirus disruptions have started to weigh on employment," he said.

"But rate cuts alone will provide limited relief to the millions of small private firms that are suffering the most from the epidemic and are poorly served by the formal banking (sector)."

source: news.abs-cbn.com

China to destroy banknotes from coronavirus-hit sectors

The Guangzhou branch of China’s central bank said it would destroy all banknotes collected by hospitals, wet markets and buses to ensure the safety of cash transactions as the country battles a coronavirus epidemic.

Financial news outlet Caixin reported on Saturday that officials at the People’s Bank of China’s (PBOC) branch in the southern city ordered that all paper currency from sectors with high exposure to the coronavirus be withdrawn for destruction.

Commercial banks in the province should put banknotes from these sectors aside, disinfect them and hand them in to the PBOC.

The order comes after Fan Yifei, deputy governor of the central bank, said on Saturday that 600 billion yuan ($85.6 billion) of new banknotes had been distributed throughout the country since Jan. 17, including 4 billion yuan in fresh notes sent to Wuhan at the center of the outbreak before the Lunar New Year.

The central bank said that in general it would use high temperatures or ultraviolet light to disinfect cash, and store the currency for more than 14 days before putting it back in circulation.

Nearly 3 billion yuan in new banknotes was injected into the southern province of Guangdong, excluding Shenzhen, between Feb. 3 and 13, while 7.8 billion yuan was withdrawn from circulation, the PBOC said.

The banking industry extended 270 million yuan in cash through 1,249 transactions to government agencies, epidemic prevention and control related enterprises and other frontline units, Caixin reported. Cash withdrawals amounted to 800 million yuan through 6,186 transactions.


Central banks routinely collect and destroy old coins and banknotes in exchange for new ones. This does not affect the money supply, and is done to maintain a healthy amount of usable currency.

Caixin cited an unnamed deputy chief at a large joint stock bank in Guangzhou as saying that customers would be required to confirm the origin of the banknotes being deposited at their branches but in reality, “it would be difficult for such a measure to be completely effective”.

Fan also said that China had pledged extra funds to banks, prodding them to help manufacturers and businesses pull through headwinds from the China-US trade war and the nation’s worst health crisis in nearly two decades.

Economic growth, which already slowed to 6 percent in the fourth quarter, is likely to sputter further in the three months ending in March, with an estimated 50 million workers forced to stay home since late January, disrupting production of everything from clothing to toys and crucial components.

The State Administration of Foreign Exchange said it had help fast-track 1,370 foreign exchange transactions in China between January 27 and February 12, including 70 for imports into Hubei, mainly for the purchase of masks, protective gear and production materials.

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

Rate cuts good, but 'clarity' over global issues better for business: Citi CEO

MANILA - As central banks around the world cut interest rates to boost their economies, the head of one of the world's largest financial companies said interest rates can only do so much and businesses want "clarity" more. 

Citi CEO Mike Corbat said cutting rates won't necessarily stimulate economic activity, as businesses hold off on investing amid uncertainties over issues like the US-China trade war, the US-Mexico-Canada trade deal, and Brexit. 

"We can have the conversation in terms of whether or not quantitive easing in some places has overstayed its functionality," Corbat said in an exclusive interview with ANC's The Boss. 

He said the financial industry was particularly affected, as interest rates in Europe are already negative.

"Banks weren't really built around a business model of negative rates," Corbat said.

Besides not being able to charge fees for holding clients' money, businesses also don't necessarily borrow more because rates are low, he added. 

"What businesses want is clarity and we can invest on the back of that," Corbat said.

Despite the uncertainties over trade issues, the global economy remains resilient, Corbat said, thanks to consumption. 

Consumers powered the recovery of the world economy following the global financial crisis, and they are behind the resilience of the world economy today, the Citi chief said. 

"The consumer has been phenomenally resilient and remains so today."

Corbat said he is also optimistic about the digitalization of finance, and Citi will continue to "invest heavily" in technology. 

Citi recently partnered with Grab to launch a co-branded credit card in the Philippines, the first in Southeast Asia.

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US Fed to hold steady at final 2019 meeting

WASHINGTON -- The Federal Reserve on Wednesday was due to resume its final policy meeting of 2019, with markets overwhelmingly expecting the central bank to leave interest rates untouched.

After cutting rates 3 times in the summer and fall, policymakers have said they are now pausing to watch how the world's largest economy performs.

With robust job growth and steady consumer spending, central bankers believe the United States has proved "resilient" in the face of a slowing world economy and a trade war with China, both of which have helped send American manufacturing into decline.

The Fed is due to announce its latest decision, along with a new set of economic forecasts, at 1900 GMT on Wednesday (3 a.m. Thursday in Manila), followed by a news conference by Fed Chairman Jerome Powell shortly afterward.

The forecasts could be of more interest, providing a window on where central bankers think the economy is headed.

Job creation shot well past expectations last month, according to official data released Friday, wiping away fears that employers' demand for labor has begun to fade.

"This just leaves the Fed very comfortably on the sidelines for 2020, or at least as we enter the new year," Diane Swonk, chief economist at Grant Thornton, told AFP.

Futures markets as of Tuesday predict the Fed will be on hold until September of next year. But some economists think another rate cut could come before the summer.

Consumer spending and confidence are strong. The housing market has picked up. Unemployment is still very low as hiring continues. GDP growth slowed in the third quarter but was still better than feared.

SOME DARK CLOUDS

The chances of a recession within the next 12 months, according to the New York Federal Reserve Bank, have also begun to decline -- though odds are still pretty high at about one in three.

If Washington and Beijing manage to seal a partial trade deal and at least cease hostilities, the end to uncertainty could give businesses a sharp boost.

The United States, Mexico and Canada on Tuesday agreed to modify a new trade agreement so that it can pass the US Congress, which also removes a source of uncertainty.

However, economists say the Fed could soon begin to feel pressure to resume cutting rates.

Even with the more positive data, dark spots in the economy have mostly persisted. Adjusted for inflation, consumer spending in October was the weakest since February. Business investment is soft. Exports have decreased and much of the manufacturing sector has had a year to forget.

Should GDP growth fall below two percent in the final quarter of this year and the first quarter of 2020, the Fed could be compelled to add stimulus to the economy, according to Rubeela Farooqi of High Frequency Economics.

"They might be forced to move by the end of the first quarter," she told AFP. 

Agence France-Presse

Paul Volcker, US Fed chief who led war on inflation, dead at 92

WASHINGTON — Former US Federal Reserve chairman Paul Volcker, who tackled American inflation in the 1970s and 80s and later lent his name to landmark Wall Street reforms, has died in New York.

Volcker, who headed the US central bank from 1979 to 1987, was 92. The cause of his death Sunday was complications from prostate cancer, his daughter Janice Zima told AFP.

Tall and known for his dead-pan humor, Volcker forged a career as a financier and fiercely independent public servant who wielded monetary policy with authority and acumen. 

A Democrat, he advised American leaders of both major parties, starting with Richard Nixon in 1971 at the US Treasury, where he helped guide the US exit from the gold standard.

His tenure ended with Barack Obama as Volcker promoted stricter banking regulation in the wake of the 2008 global financial crisis.

But it was as Federal Reserve chairman, first under Jimmy Carter and then Ronald Reagan, that he left his deepest mark, albeit during difficult times, and earned the respect of economists around the world. 

"I am deeply saddened by the passing of Paul Volcker. He believed there was no higher calling than public service," current Fed chairman Jerome Powell said in a statement. 

"His life exemplified the highest ideals -- integrity, courage, and a commitment to do what was best for all Americans. His contributions to the nation left a lasting legacy."

After announcing his candidacy for the White House in 2015, Donald Trump expressed admiration for Volcker, saying "there was something very solid about him."

Carter said Monday he was "deeply saddened" to learn of Volcker's death, calling him "a giant of public service," suggesting his actions may have helped cost Carter a second term but were still "the right thing to do."

President Barack Obama, House Speaker Nancy Pelosi and Bank of England Governor Mark Carney also issued statements paying their respects to Volcker.

Amid the oil crisis in the late 1970s, the American economy suffered rampant inflation. Carter bucked the advice of aides who said installing Volcker at the Fed would mean "tough medicine."

HOLDING FIRM 

With inflation -- which Volcker described as too much cash chasing too few goods -- hitting an eye-watering 14 percent annually, he made no secret of his plans to raise interest rates.

"I don't think there is any feeling or any evidence around at the moment that the economy is suffering grievously from a shortage of money," Volcker testified during his Senate confirmation.

With Volcker at the helm, the Fed raised interest rates from 11 percent to 20 percent (today, by comparison, they are in a range of 1.5 to 1.75 percent).

Such drastic tightening was especially painful and hit during a recession. Auto dealers sent him car keys in coffins. Building contractors mailed him wood planks they could not use, since homes were not selling. 

Farmers drowning in debt drove tractors to encircle the central bank's offices.

But the hard-nosed Volcker gave no ground. "He becomes intellectually stimulated by a crisis," his late wife Barbara said, according to the author William Neikirk.

The firm stance paid off, with inflation falling to 3 percent by 1983. Along with the Iranian hostage crisis, it also helped cost Carter his chances at reelection.

Volcker left the Fed in 1987 and joined James Wolfensohn's investment firm. Wolfensohn later became president of the World Bank.

The former Fed chief reemerged on the public scene 20 years later during the global financial crisis as an Obama adviser. 

A critic of banks' high-risk trading and their executives' gigantic pay packages, he proposed what would become known as "the Volcker rule," restricting so-called proprietary trading. 

The regulation was blasted by Frank Keating, then head of the American Banking Association, as too complex and onerous for implementation -- and came under fire again in the anti-regulation era of President Donald Trump.

The ABA on Monday offered its "deepest condolences," saying Volcker left "a giant legacy of dedicated public service."

A grandson of German immigrants, Volcker was born in 1927 in Cape May, New Jersey, developed a love of fly-fishing and studied at Princeton and Harvard.

A father of 2, he remarried at age 83 in 2010, taking his long-serving assistant as his bride, 12 years after the death of his first wife, Barbara.

Agence France-Presse 

World Bank scales back project in China’s Xinjiang region

WASHINGTON — The World Bank said Monday that it would scale back development work in China’s Xinjiang region after speculation that a $50 million loan it granted in 2015 for an education project was being used to fund Muslim detention camps.

The bank has been conducting a review of the project since Sen. Marco Rubio, (Republican-Florida), and Rep. Jim McGovern, (Democrat-Massachusetts), expressed concern about it in August and after an independent researcher found evidence suggesting that funds were being used to buy police batons and tear gas launchers.

The Chinese government has been facing criticism for detaining more than a million Muslim Uighurs and placing them in “re-education” camps where they are forced to renounce their religious beliefs and embrace the ideology of the Communist Party.

The bank said it reviewed the project extensively and was unable to substantiate the allegations. However, the bank acknowledged the challenge of rigorously monitoring the situation and said it was making changes to the project.

The loan was intended to support five vocational schools in the region by upgrading teams of teachers and curriculums. Some of this money was going to “partner schools” that were indirectly receiving World Bank funding and were not under the bank’s supervision.

“In light of the risks associated with the partner schools, which are widely dispersed and difficult to monitor, the scope and footprint of the project is being reduced,” the bank said in a statement. “Specifically, the project component that involves the partner schools in Xinjiang is being closed.”

The bank said it was also increasing its supervision of the project, which is supposed to continue through next year, by assigning a staff member from Washington to jointly head it and bringing on a senior manager from the bank to participate in site visits.

Last month, the Trump administration imposed some commercial restrictions on Chinese technology companies and other organizations believed to be involved in the repression, and said it would impose a visa ban on officials thought to be responsible for human rights abuses.


2019 The New York Times Company

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Asian stocks edge higher after Fed rate cut, focus shifts to BOJ

TOKYO -- Asian shares rose on Thursday and US stock futures edged higher after the US Federal Reserve cut interest rates as expected to keep economic expansion on track.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 percent. Japan's Nikkei stock index rose 0.41 percent, but Australian shares fell 0.24 percent.

US Treasury yields extended declines in Asia after the rate cut, but further declines may be limited as Fed Chairman Jerome Powell signaled additional rate cuts are unlikely because there are several areas of strength in the US economy.

The yen held steady versus the dollar before a Bank of Japan policy meeting later on Thursday. The BOJ is expected to keep its ultra-easy monetary policy in place, but the decision could be a close call.

Debate at the Fed and the BOJ highlights the struggle that many central banks are facing.

The US-China trade war and Britain's divorce from the European Union have increased uncertainty, but central banks are somewhat reluctant to ease policy aggressively because interest rates are already very low in many major economies.

"The biggest thing that stands out is stocks look stronger after the Fed," said Tsutomu Soma, general manager of fixed income business solutions at SBI Securities in Tokyo.

"Risks like US-China or Brexit haven't been resolved completely, but the markets are starting to look beyond these risks. The BOJ is likely on hold, so it will be difficult for currencies to react."

US stock futures nudged 0.07 percent higher on Thursday in Asia after the S&P 500 rose 0.33 percent to close at a record high on Wednesday for the second time in three trading sessions.

The Fed lowered its policy rate to 1.50 to 1.75 percent, but dropped a previous reference in its statement to "act as appropriate" to sustain the economic expansion.

In his news conference, Powell listed several reasons why he feels the economy is doing well, such as robust consumer spending, strengthening home sales, and healthy asset prices.

The yield on benchmark 10-year Treasury notes fell to 1.7838 percent in Asia on Thursday, while the two-year yield eased slightly to 1.6076 percent.

The dollar index against a basket of six major currencies fell 0.22 percent to 97.427, extending declines from Wednesday.

The yen was little changed at 108.80 per dollar as traders awaited the outcome of the BOJ meeting.

Japan's central bank may trim its consumer price forecasts but leave policy unchanged due to hopes that progress in scaling back a US-China trade dispute will give it room to save its dwindling policy tools.

Optimism that Washington and Beijing will sign a preliminary agreement to call a truce to their 16-month trade war was also a factor behind the Fed's decision to signal that further rate cuts are on hold, highlighting the importance of trade talks to global monetary policy.

In the energy market, oil futures extended declines on Thursday as a massive buildup in U.S. crude stock piles reinforced concerns about oversupply in the world's energy markets.

US crude fell 0.29 percent to $54.90 per barrel.

Crude inventories, excluding the Strategic Petroleum Reserve SPR, rose 5.7 million barrels in the week to Oct. 25, the Energy Information Administration said on Wednesday.

This blew past analysts' expectations for a 494,000-barrel build.

source: news.abs-cbn.com

US Fed lowers key interest rate as 'insurance' against economic risks

WASHINGTON — The US Federal Reserve cut its benchmark interest rate for the third straight time on Wednesday but is likely to hold off before providing more stimulus as it gauges economic risks.

Though President Donald Trump's trade war with China and Brexit concerns have created uncertainties that have crimped business investment and undermined manufacturing, the American economy has remained "resilient," and monetary policy is now "in a good place," Fed Chairman Jerome Powell said.

The Fed's policy-setting Federal Open Market Committee lowered the policy interest rate by 25 basis points to a target range of 1.5-1.75 percent, as expected, pulling back another of the four interest rate increases it implemented in 2018.

"We took this step to help keep the US economy strong in the face of global developments, and to provide some insurance against ongoing risks," Powell told reporters.

Added to a key change in the language of the statement issued by the policy-setting Federal Open Market Committee, the comments cement the view the Fed is for now unlikely to cut rates again in the final meeting of the year.

Pressed to explain under what conditions policymakers would consider another dose of stimulus as appropriate, Powell said, "if developments emerge that cause a material reassessment of our outlook, we would respond accordingly."

He pointed to trade tensions and Brexit as factors crimping business investment and manufacturing but "overall we see the economy as having been resilient to the winds that have been blowing this year."

Given signs of a possible "phase one" trade deal with China and the diminished risk of a no-deal Brexit, "there is plenty of risk left but I would have to say the risks seem to have subsided."

KEY CHANGE IN WORDING

In a key edit to the prior statement, the Fed removed the pledge to "act as appropriate to sustain the expansion."

Analysts who scrutinize every phrase the Fed utters read that as a leaving the door open to a pause in the easing cycle.

"In other words, they think they have done enough for now and that further easings will be contingent on a material weakening in growth and/or inflation," said Ian Shepherdson of Pantheon Macroeconomics.

As President Donald Trump's trade war with China has hit manufacturing and created uncertainty that, together with concerns about Brexit, have slammed the brakes on investment, economists expected this move to help bolster a softening American economy.

But GDP in the July-September quarter was surprisingly solid, growing 1.9 percent, boosted by a strong housing sector and healthy consumer spending, according to data released earlier Wednesday.

US hiring continues and unemployment is low, while inflation is creeping up to the Fed's 2.0 percent target.

However, the trade war uncertainty also has hit the global economy, and the US data contained concerning signs as well, even as American consumers continue to carry the weight of the expansion on their backs.

Several recent surveys show about a third of economists believe the US economy could slip into recession in the next 12 months. All show the number has increased in recent weeks.

Esther George, head of the Kansas City Federal Reserve Bank, and Boston's Eric Rosengren both opposed the latest move, just as they voted against the previous two rate cuts.

Wall Street was cheered by Powell's remarks, with the S&P 500 swinging to a record close. Analysts said the Fed's messaging matched investor expectations.

source: news.abs-cbn.com

US Fed faces balancing act in delivering rate cut

WASHINGTON -- The Federal Reserve is widely expected to announce its third interest rate cut of the year on Wednesday, another move to help bolster a softening American economy.

But where will it go from there? Markets will be watching intensely for clues, leaving to central bank chief Jerome Powell the delicate task of managing investor expectations.

The Fed is due announce its decision at 1800 GMT (2 a.m. Thursday in Manila), and Powell scheduled to hold a news conference 30 minutes later.

President Donald Trump on Tuesday resumed his regular schedule of bashing the central bank on Twitter, saying it "doesn't have a clue!"

"We have unlimited potential, only held back by the Federal Reserve."

But the president's demands notwithstanding, some influential voices are calling for a pause in the stimulus so the Fed can assess global economic and trade developments, which may improve.

The United States and China say they have reached another truce in trade war while a no-deal Brexit now appears less likely.

But those developments could just as easily turn sour and economic data in recent weeks have sent more worrying signals, which means Powell will have to balance whether to signal a pause in rate cuts or hint that the central bank will continue the easing cycle.

"Unfortunately, I think clear communication by Jay Powell to the markets has been a bit of a challenge for him, particularly when he speaks extemporaneously or off the cuff," Kathy Bostjancic, chief US financial economist at Oxford Economics, told AFP.

FED MEMBERS SPLIT

The Fed chairman has struggled on prior occasions to send clear-but-nuanced signals. 

He declared July's rate cut was a "mid-cycle adjustment," a head-scratcher that markets initially thought meant the Fed would go no further.

Bostjancic said Powell was unlikely to signal a "hard stop" this time either, preferring instead to tell the public that policymakers will take things one meeting at a time.

"They'll keep the phrase 'we'll act as appropriate' to sustain the expansion but at the same time at the press conference he can emphasize that it's a meeting-by-meeting basis," Bostjancic said.

Early Wednesday could bring more unwelcome news as a much-anticipated third-quarter GDP is expected to show a sharp slowdown in the economy. And October jobs numbers due Friday are likewise forecast to show weaker hiring.

Futures markets as of Tuesday expected a rate cut this week, but did not see another change in benchmark lending rates before June of next year.

A rate cut this week would mean the Fed has erased 3 of the 4 rate increases from last year, implemented at a time when the economy was picking up steam and before the tariff battles with China and Europe began to slow activity and freeze investment.

As he works to strike the right tone, Powell is also contending with broadening divergences among Fed members.

The normally dovish Charles Evans of the Chicago Federal Reserve Bank said earlier this month that interest rate policy is already "in a good place" as it is.

But Dallas Fed President Robert Kaplan, who in January will become a voting member of the Fed's rate-setting Federal Open Market Committee, said policymakers should avoid suggesting they will stop here.

"This is a really fragile time where this could break either way. The jury is still very much out," he said, according to The Wall Street Journal.

source: news.abs-cbn.com

Trump again attacks Fed, says central bank 'derelict in its duties'

WASHINGTON — President Donald Trump once again attacked the US Federal Reserve on Thursday, calling for more interest rate cuts to stimulate the American economy just days before a key policy meeting.

"The Federal Reserve is derelict in its duties if it doesn't lower the Rate and even, ideally, stimulate," he said on Twitter, a relatively mild epithet after Trump earlier called policymakers "boneheads" and "pathetic."

Trump has long argued that the Fed was too aggressive about raising the benchmark borrowing rate in 2018, which it did four times that year.

He has been especially critical of Fed Chair Jerome Powell, whom Trump appointed to run the central bank, breaking with tradition of refraining from public comment on monetary policy.

Powell insists Fed officials tune out politics and look only at economic factors when deciding the correct level of interest rates.

But the Fed has cut the rate twice this year and could do so again next week at its latest 2-day meeting, although some economists are calling for a pause.

Trump's blitz of insults and criticism directed at the Fed had slowed in recent weeks, with the most recent occurring 2 weeks ago when he said US central bankers "don't have a clue but I do."

"Take a look around the World at our competitors. Germany and others are actually GETTING PAID to borrow money. Fed was way too fast to raise and way too slow to cut!" Trump tweeted Thursday, pausing in his focus on the impeachment inquiry against him in Congress.

The European Central Bank left its policy interest rate unchanged on Thursday at -0.5 percent, while the Bank of Japan -- also set to meet next week -- has a -0.1 percent rate as sluggish economic growth persists.

MIXED ECONOMIC SIGNALS

Meanwhile, official government data and industry reports are giving mixed signals about the US economy.

Sales of American manufactured goods had a dismal September, hit hard by Boeing's woes and a protracted work stoppage at General Motors, the Commerce Department reported.

Total new orders fell 1.1 percent in September to $248.2 billion.

The result meant 2019 so far has been a year to forget, with sales in the first nine months of the year 0.8 percent lower than the same period in 2018.

The largest part of the damage last month was done by the transportation sector, with autos and parts falling 1.6 percent and civilian aircraft falling another 11.8 percent, extending August's decline.

New home sales also declined, falling 0.7 percent but they are up 15.5 percent compared to September 2018, according to a separate report on Thursday.

Amid rising wages, low interest rates and historically low unemployment, new home sales forged higher in June, July and August.

But the far larger market for existing homes also fell in September, according to industry data released earlier this week.

Scarce labor, high costs for materials in part due to tariffs, and fear that Trump's trade wars could scare off would-be buyers had previously made some homebuilders reluctant or unable to add to the supplies.

Economist Yelena Maleyev of GrantThornton noted home prices are rising due to high demand and low supply.

"Manufacturing counties, most of which are concentrated in the Midwest, have been hardest hit by the trade war and, more recently, the GM strike; those losses are spilling into the housing market," she said in an analysis.

"Housing activity is expected to contribute to overall GDP for the first time in more than a year and a half in the third quarter, but only modestly."

Meanwhile, manufacturing, including auto building, has been in steady decline. And though it is a much smaller share of the US economy than services, it has been the sector Trump promised to help with his aggressive tariff strategy.

source: news.abs-cbn.com

Indonesian central bank cuts policy rate by 25 basis points

JAKARTA - Indonesia's central bank on Thursday cut its benchmark interest rate for the fourth straight month in an attempt to boost domestic economic growth.

The benchmark seven-day reverse repurchase rate was cut by 0.25 percentage point to 5 percent amid estimates that inflation is under control and that investment yields would remain attractive, Bank Indonesia Governor Perry Warjiyo told reporters at a press conference.

The rate cut is also considered a preemptive measure to boost domestic economic growth amid the global economic slowdown due to a lingering trade war between the United States and China, he added.

The bank cut the policy rate by 0.25 percentage point in each of the previous three months.

Warjiyo also said that Indonesia's economy is on track to grow between 5 and 5.4 percent this year.

source: news.abs-cbn.com

Transact easily in eight different currencies through this mobile bank app feature

Through the Citibank Global Wallet, you can use one Debit Mastercard for international transactions without the hefty fees.Through the Citibank Global Wallet, you can use one Debit Mastercard for international transactions without the hefty fees.



Do you love to travel but hate international bank transaction fees? Well, travelers can now access eight currencies in one Debit Mastercard with Citi. Through its new feature called Citibank Global Wallet, customers can make purchases overseas at point-of-sale or online, and withdraw cash from Citibank ATMs without incurring additional currency conversion charges.

Citi is the first bank in the Philippines to introduce this feature, linked to the Citigold and Citi Priority Debit Mastercard. Customers now have access to eight foreign currencies, including Philippine Peso, US dollar, Euro, Australian Dollar, Sterling Pound, Japanese Yen, Hong Kong Dollar and Singapore Dollar.

Easy access

With the Citi mobile app or Citibank Online, existing Citigold and Citi Priority bank account holders can turn on Citibank Global Wallet and instantly open an account in any of the eight foreign currencies. To fund their newly opened foreign currency account, they can transfer funds online from their existing US dollar or Euro account. Citibank Global Wallet automatically switches to the relevant currency.

So if a customer is travelling to Sydney, all point-of-sale, online transactions and overseas ATM cash withdrawals will be automatically debited from their Australian Dollar account as long as there is sufficient balance.

“Citibank Global Wallet is perfect for travelling overseas, making online purchases and transferring foreign currencies for payments,” says Citi Philippines retail bank head Therese Chan. “Customers don’t have to go all the way to a bank or to a money changer to exchange foreign currency before a trip. They don’t even have to worry about bringing a big amount of cash with them. They can use the wallet anytime, when visiting family or friends in those countries, or whether travelling for business or for leisure.” 

For more information, visit Citibank.com.ph

source: news.abs-cbn.com

NY Fed boosts money market cash injection as banks' demand rises

NEW YORK - The Federal Reserve Bank of New York on Wednesday announced it will increase Thursday's money market cash injections as it seeks to keep short-term interest rates under control.

Banks this week have repeatedly asked for more overnight cash than the New York Fed offered to help financial institutions meet minimum reserve levels.

The New York Fed on Thursday morning will offer up to $100 billion in so-called repurchase agreements -- exchanges secure assets for cash over very short periods -- up from the $75 billion offered on prior days.

The New York Fed branch's open market trading desk will also double the amount of 2-week agreements offered Thursday to $60 billion.

Banks on Wednesday morning had asked the Fed for an aggregate of about $92 billion, outstripping the $75 billion on offer, a sign that the problem has not cooled off so far.

Amid hefty corporate tax payments and Treasury auctions, banks have struggled this month to find the cash needed to meet reserve requirements -- which threatened to push up short-term borrowing rates beyond the Fed's benchmark lending rates.

The scarcity of cash makes borrowing more expensive but the US central bank in recent months has moved benchmark rate lending rates in the opposite direction -- going lower to help stimulate the economy as global growth slows and US trade wars drag on.

The market interventions are the first since the global financial crisis, when credit markets seized up as banks feared borrowers would not be able to repay.

The New York Fed, the Federal Reserve branch which conducts repurchase operations, has since September 17 pumped short-term cash into money markets on a daily basis to help financial institutions that are short of liquidity meet reserve minimums.

The repurchases are due to continue until October 10.

Officials have said so far that the liquidity crunch was caused by a confluence of technical factors that do not reflect on the health and stability of the economy or monetary policy.

In congressional testimony on Wednesday, Federal Reserve Board Governor Lael Brainard said officials had the matter in hand.

"I would really say that the New York Fed is very focused," she said.

"They've been providing ample operations to relieve those temporary frictions."

source: news.abs-cbn.com