Category: Market

The European Commission has today adopted a proposal to adjust and further strengthen the EU’s existing bank crisis management and deposit insurance (CMDI) framework, with a focus on medium-sized and smaller banks. The EU’s banking sector, which includes a strong crisis management framework, has become much more resilient in recent years. Financial institutions in the EU are well capitalised, highly liquid and closely supervised. However, experience has shown that many failing medium-sized and smaller banks have been managed with solutions outside the resolution framework. This sometimes involved using taxpayers’ money instead of the bank’s required internal resources or private, industry-funded safety nets (deposit guarantee schemes and resolution funds). Today’s proposal will enable authorities to organise the orderly market exit for a failing bank of any size and business model, with a broad range of tools. In particular, it will facilitate the use of industry-funded safety nets to shield depositors in banking crises, such as by transferring them from an ailing bank to a healthy one. Such use of safety nets must only be a complement to the banks’ internal loss absorption capacity, which remains the first line of defence. Overall, this will further preserve financial stability, protect taxpayers and depositors, and support the real economy and its competitiveness. The proposal has the following objectives: Preserving financial stability and protecting taxpayers’ money The proposal facilitates the use of deposit guarantee schemes in crisis situations to shield depositors (natural persons, businesses, public entities, etc.) from bearing losses, where this is necessary to avoid contagion to other banks and negative effects on the community and the economy. By relying on industry-funded safety nets (such as deposit guarantee schemes and resolution funds), the proposal also better protects taxpayers who do not have to step in to preserve financial stability. Deposit guarantee schemes can only be used for this purpose after banks have exhausted their internal loss absorption capacity, and only for banks that were already earmarked for resolution in the first place. Shielding the real economy from the impact of bank failure The proposed rules will allow authorities to fully exploit the many advantages of resolution as a key component of the crisis management toolbox. In contrast with liquidation, resolution can be less disruptive for clients as they keep access to their accounts, for example by being transferred to another bank. Moreover, the bank’s critical functions are preserved. This benefits the economy and society, more broadly. Better protection for depositors The level of coverage of pound 100,000 per depositor and bank, as set out in the Deposit Guarantee Scheme Directive, remains for all eligible EU depositors. However, today’s proposal harmonises further the standards of depositor protection across the EU. The new framework extends depositor protection to public entities (i.e. hospitals, schools, municipalities), as well as client money deposited in certain types of client funds (i.e. by investment companies, payment institutions, e-money institutions). The proposal includes additional measures to harmonise the protection of temporary high balances on bank accounts in excess of pound 100,000 linked to specific life events (such as inheritance or insurance indemnities). Next steps The legislative package will now be discussed by the European Parliament and Council. Background In its statement of 16 June 2022, the Eurogroup noted that the Banking Union remains incomplete and agreed, as an immediate step, that the work on the Banking Union should focus on strengthening the crisis management and deposit insurance framework, with the aim of completing the legislative work during this institutional cycle. Other important projects, such as the establishment of the third and outstanding pillar of the Banking Union – European Deposit Insurance Scheme (EDIS) – and further progress on market integration, would be re-assessed subsequently, after the CMDI reform. In its latest report on the Banking Union, the European Parliament also supported the need for a review of the crisis management and deposit insurance framework to improve its functioning and predictability to manage bank failures.

Source: Cyprus News Agency

‘Europe has to grow out of the mindset that Europe’s problems are the world’s problems, but the world’s problems are not Europe’s problems.’ This is how India’s Foreign Minister, S. Jaishankar, summed up his country’s stance vis-a-vis western pressure to take their side in the Ukraine conflict. How is the war changing the balance of power and wisdom between the so-called developed and developing world? To discuss this, Oksana is joined by Krishen Mehta a former Partner with PwC and now a Senior Global Justice Fellow at Yale University. He is also a Board member of the American Committee for US Russia Accord, and of the Center for Citizen Initiatives. He has travelled to Russia, visited Moscow, Crimea, St Petersburg, Kazan, Saratov, and other cities.

Source: Russia Today

Russian assets frozen by the G7 nations will remain “immobilized” until the Ukraine conflict is resolved and Moscow pays reparations, the group of leading western economies has announced.

“Any resolution to the conflict must ensure Russia pays for the damage it has caused,” the bloc’s foreign ministers stated following this week’s meeting in Japan.

The ministers also announced their intention to intensify the economic restrictions on Russia and to punish third parties for any attempts to “evade and undermine our sanctions measures.” They must “cease assistance to Russia’s war, or face severe costs,” the G7 warned.

The group, which includes Canada, France, Germany, Italy, Japan, the UK, and US, has condemned Moscow for launching its military operation in Ukraine in February 2022.

The intragovernmental group of leading economies was formed in the 1970s, but its relative economic clout has since declined, as other nations, including Brazil, China, India, and South Africa, continue to grow. These four, along with Russia, form an informal group known as BRICS, which contributes more to global GDP than the G7 nations, according to British research firm Acorn Macro Consulting.

The G7 has been one of the primary vehicles for formulating punitive actions, such as a price cap on Russian energy, which member states have sought to enforce through the threat of secondary sanctions against buyers that violate the restrictions. There have been claims in the media that Japan is buying Russian crude at prices over the prescribed cap of $60 per barrel.

The US and its allies have frozen a reported $300 billion of Russian foreign reserves, as well as the assets of private individuals who they deem to be ‘oligarchs’ that are close to the Russian government. Kiev and Washington want the frozen funds to go to post-war reconstruction efforts in Ukraine, but many Western nations have said that simply expropriating the money would violate their laws.

Last week, the Russian central bank reported that the nation’s foreign reserves once again surpassed the $600 billion benchmark. The all-time high was recorded on February 18, 2022, days before the Ukraine conflict broke out, when Russia possessed $643.2 billion in reserves.

Russia rejects the Western claim that the military operation in Ukraine was unprovoked, saying it was in response to a proxy war against Moscow conducted by Washington to undermine competition on the world stage.

Source: Russia Today

Bank of Cyprus has notified its Russian customers that their accounts are set to be closed, Forbes reported on Tuesday, citing Main Partner Trust, a company that provides legal and financial services in Cyprus.

The information was reportedly confirmed by an unnamed source in the country’s banking sector.

Russian clients of Bank of Cyprus, the nation’s biggest banking institution, began receiving the notifications several days ago, according to Aljona Sakharova, a non-executive director of Main Partner Trust.

The letters inform customers that their accounts will be closed within two months of the notification because their user data does not comply with the so-called Know Your Customer (KYC) requirements.

The firm also said that among the reasons for closing accounts may be Russian tax residency or income from a sanctioned business in Russia.

Accounts may also be closed for Russians holding so-called ‘atypical’ residence permits in the country, such as Digital Nomad or Category F. The latter is commonly granted to people who possess and have fully and freely at their disposal a secured annual income that is sufficient to provide them with a decent living in Cyprus.

According to the source in the banking sector, Bank of Cyprus is not the only lender in the country that is closing the accounts of Russians. Local subsidiaries including divisions of the Greek Hellenic Bank and Alpha Bank are also doing so.

The move is reportedly attributable to concern about falling under US sanctions from doing business with Russian clients.

Cyprus has been known for its lax banking and financial services supervision, which has earned it much criticism in the EU as a money-laundering haven.

In January, the country’s finance minister said that the authorities had frozen about €1.5 billion ($1.6 billion) in Russian-linked deposits and assets in accordance with the bloc’s sanctions against Moscow.

Source: Russia Today

Oil prices rebounded slightly on Monday in anticipation of the release of positive Chinese economic data, but negative comments from US Federal Reserve (Fed) officials weighed on prices.

International benchmark Brent crude traded at $86.35 per barrel at 10.01 a.m. local time (0701 GMT), a 0.04% increase from the closing price of $86.31 a barrel in the previous trading session.

Simultaneously, the American benchmark West Texas Intermediate (WTI) traded at $82.47 per barrel, up 0.05% from the previous session’s close of $82.43 per barrel.

Prices began early trade on a down note after Fed Governor Chris Waller stated on Friday that the Fed had made little progress in lowering inflation based on current data, though he added that the central bank’s job was not finished.

“Whether you measure inflation using the CPI (Consumer Price Index) or the Fed’s preferred measure of personal consumption expenditures, it is still much too high and so my job is not done,” Waller said in a speech at the Graybar National Training Conference in San Antonio, Texas.

“Financial conditions have not significantly tightened, the labor market continues to be strong and quite tight, and inflation is far above target, so monetary policy needs to be tightened further,” Waller added.

Fears of higher interest rates also fueled the US dollar’s strength, discouraging oil-importing countries from purchasing dollar-indexed crude.

The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, rose 0.08% to 101.32 early Monday.

Following the brief dip in early trade, however, prices began to rise in anticipation of the release of China’s first-quarter economic data, which is expected to outperform expectations due to a rebound in consumption.

The National Bureau of Statistics will release first-quarter GDP growth and other data early on Tuesday. This data release will be China’s first quarterly economic performance in the post-COVID period, which will provide insight into whether China can meet its economic goals this year.

Source: Anadolu Agency

Trkiye’s benchmark stock index opened Monday at 5,112.01 points, up by 0.38%, or 19.13 points, from the previous close.

Borsa Istanbul’s BIST 100 index closed Friday at 5,092.88 points, down 0.83%, with a daily trading volume of 48.7 billion Turkish liras ($2.5 billion).

The US dollar/Turkish lira exchange rate was 19.3710 as of 10.06 a.m. local time (0706GMT), the euro/lira exchange rate stood at 21.3056 while a British pound traded for 24.0670 Turkish liras.

Brent crude oil was selling for around $86.27 per barrel, while the price of an ounce of gold was $2,026.30.

Source: Anadolu Agency

After the start of the Tamil language service on YouTube in 2021, this is the next step to reach the target group in Tamil Nadu, Sri Lanka as well as the Tamil diaspora communities in the U.S., UK, Canada, Europe, Malaysia, Singapore, and the Middle East. By creating a more inclusive community, DW’s Tamil editorial team intends to enter an in-depth and equitable exchange with users to discuss the issues that concern them most.

DW Director of Programs for Asia Debarati Guha: “There are more than 10 million active Facebook users in Tamil Nadu, where the entire META universe is growing. However, Facebook in Tamil Nadu is completely dominated by men, with at least 70 percent male users. This gives us the opportunity to focus on women, gender and social issues on the platform – allowing us to attract and reach new users in parallel with our YouTube audience.”

DW Tamil Facebook will also focus on environment and climate change, physical and mental health, and technology.

Source: Deutsche Welle

Beijing’s trade with Moscow has continued to grow, with both exports and imports rising significantly in March in annual terms, Chinese customs data shows.

According to a report published on Thursday, Chinese exports to Russia soared by 136% year-on-year, while imports from the country jumped by 40.5%.

Overall exports of Chinese cars, steel, clothing and plastics to Russia and other countries rose strongly in March. Statistics also showed that Beijing’s coal purchases from abroad more than doubled last month, hitting a three-year high. Oil imports increased by 22.5%, iron ore by 14.8%, and soybeans by 7.9%.

China’s trade with Russia hit a record high in 2022, growing by nearly a third amid Western sanctions against Moscow. Bilateral trade is on track to reach $200 billion this year, according to first quarter results published earlier this month.

Official statistics show that Russia was the leader among China’s 20 largest partners in terms of trade growth in 2022. China has been competing with India as Russia’s biggest buyer of oil, and has overtaken the EU as the top importer of Russian agricultural products.

Beijing’s seaborne imports of Russian oil have been hitting record highs as refiners take advantage of cheap prices amid a domestic fuel demand rebound, following the lifting of Covid restrictions.

Source: Russia Today

Indian banks are concerned that they may not be able to process payments for Russian oil if they breach the price cap set by the EU and G7 countries, Millennium Post reports, citing oil industry sources.

India, along with China, emerged as a key buyer of Russian crude after Western countries shunned supplies due to sanctions. New Delhi has been a top importer of Russian oil for six consecutive months, enjoying steep discounts offered by Moscow. However, this may change following OPEC+ production cuts, which have helped to drive Urals crude close to the $60 per barrel price cap.

Earlier this month, the OPEC+ group, which includes major oil producers Russia, Saudi Arabia, Iraq and Kuwait, shocked the markets by announcing output cuts of 1.16 million barrels per day (bpd) on top of those already introduced in November. The announcement sent Brent crude prices soaring above $85 a barrel.

The State Bank of India and Bank of Baroda have informed refiners that they will not handle payments for Russian crude bought above the $60 a barrel price limit, the outlet said, citing an unnamed refinery executive. Indian lenders are monitoring prices at loading ports, before shipping and logistics costs are added, said the executive who is involved in seeking financing for his company’s purchases of Russian oil.

Russia remains India’s top oil supplier – data

While India imports Russian oil on a delivered basis, banks are demanding details on so-called free-on-board prices to ensure they comply with the price ceiling. Oil prices above the cap will make them exposed to sanctions, which ban the use of Western shipping, banking and insurance.

However, Russia can still transport and sell crude at any price if it doesn’t use G7 and EU services or vessels.

An executive from a Mumbai-based refinery has suggested that buyers could turn to other banks which are less exposed internationally and would be willing to process payments without worrying about breaching sanctions.

The development comes as the International Energy Agency (IAE) reported that Russian oil exports surged to their highest level in almost three years in March, despite Moscow’s production cut and Western restrictions. The IEA also revealed in April that sanctioned seaborne crude was selling above the price cap for the first time since the penalties were imposed.

Source: Russia Today