The future monetary system - BIS Media Briefing

A burst of creative innovation is under way in money and payments, opening up vistas of a future digital monetary system that adapts continuously to serve the public interest.

Structural flaws make the crypto universe unsuitable as the basis for a monetary system: it lacks a stable nominal anchor, while limits to its scalability result in fragmentation. Contrary to the decentralisation narrative, crypto often relies on unregulated intermediaries that pose financial risks.

A system grounded in central bank money offers a sounder basis for innovation, ensuring that services are stable and interoperable, domestically and across borders. Such a system can sustain a virtuous circle of trust and adaptability through network effects.

New capabilities such as programability, composability and tokenisation are not the preserve of crypto, but can instead be built on top of central bank digital currencies (CBDCs), fast payment systems and associated data architectures.

HSBC's Stuart Kirk tells FT investors need not worry about climate risk

HSBC's now suspended Asset Management's head of responsible investment Stuart Kirk speaking at the FT Live Moral Money Summit Europe conference, accuses central bankers and policymakers of overstating the financial risks of climate change.

Just consider three comments made during his presentation:

“Who cares if Miami is six metres underwater in 100 years? Amsterdam has been six metres underwater for ages, and that’s a really nice place.” Stuart Kirk Head of Responsible Investments

“The average loan length in a big bank like ours, HSBC, is six years. What happens to the planet in year seven is irrelevant.” Stuart Kirk Head of Responsible Investments

“There’s always some nut job telling me about the end of the world.” Stuart Kirk Head of Responsible Investments

NatWest will not accept corporate customers who deal in cryptocurrencies

UK commercial and retail bank NatWest will not accept corporate customers who deal in cryptocurrencies.

“We have no appetite for dealing with customers, whether taking them on as new clients or having an ongoing relationship with people, whose main business is backed by an exchange for cryptocurrencies, or otherwise transacting in cryptocurrencies as their main activity,” said NatWest head of risk Morten Friis during a recent shareholder event.

Friis indicated that the NatWest board, of which he is a member, is taking its cues from the UK’s Financial Conduct Authority, which earlier this year issued a warning to crypto customers that Bitcoin and other digital assets are risky investments.

Read the full story HERE.  

GameStop trading frenzy being probed for misconduct

The trading frenzy that saw unexpected surges in GameStop, AMC and other stocks has now got the attention of federal regulators who are now investigating the rally for market manipulation or other misconduct, The Wall Street Journal reported on Tuesday (Feb. 11), citing sources.

More details from this PAYMNTS. com post - READ HERE

 

The GameStop Rally Explained

Why it's likely not what it seems

How Short Selling Works

Short selling lets investors bet against a stock, profiting when it falls in price, but how exactly does a short work? In this video Richard Coffin discusses the process and the risks it entails.

How the GameStop short-sellers play - Charts that Count

The FT's US finance editor Robert Armstrong looks at a company whose shares soared more than 400 per cent just two weeks ago as amateur stock traders took on Wall Street to make money from its fortunes.

 You can get more information on this story from the FT article;

"GameStop curbs put clearing houses under the spotlight"

Neighborhood Bully - America Recklessly Throws its Weight Around

From Gold $eek

‘On June 30, U.S. authorities announced a stunning $9 billion fine on French bank BNP Paribas for violations of financial sanctions laws that the United States had imposed on Iran, Sudan and Cuba. In essence, BNP had surreptitiously conducted business with countries that the United States had sought to isolate diplomatically (sometimes unilaterally in the case of Cuba). Although BNP is not technically under the jurisdiction of American regulators, and the bank had apparently not broken any laws of its home country, the fine was one of the largest ever issued by the United States and the largest ever levied on a non-U.S. firm. The Treasury Department and the Federal Reserve made clear that unless BNP forks over the $9 billion (equivalent to one year's of the company's total earnings), the U.S. will prevent the bank from engaging in dollar-based international transactions. For an institution that makes its living through such transactions, that penalty is the financial equivalent of a death sentence. The fine will be paid.

It is widely rumored that Germany's Commerzbank will be the next European institution to face Washington's wrath. It is rumored that it will face a penalty of at least $500 million, an amount that is roughly equivalent to one year of the bank's income.

As if choreographed by a financial god with a wicked sense of humor, the very next day marked the official implementation of the Foreign Account Tax Compliance Act (FATCA), a new set of laws that will require all foreign financial institutions to routinely and regularly report to the U.S. Internal Revenue Service all the financial activities of their American customers. The law also requires that institutions report on all their non-American customers who have ever worked in the U.S. or those persons who have a "substantial" connection to the U.S. (Inconveniently the law fails to fully define what "substantial" means). Failure to report will trigger 30% IRS withholding taxes on any dollar-based transactions made by clients who the U.S. has determined to be American...either by birth, marriage, or simply association.’

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Don't Be Fooled: Banks Still Too Big to Fail

From truthout

‘Analyzing a government report is like eating and digesting a meal — better to take it slowly than gobble quickly and suffer the possible consequences.

Example: last Thursday’s report from the Government Accountability Office (GAO) on whether or not large financial institutions were still perceived as “too big to fail.”

The immediate takeaway by many in the media, government and investment community was that the need for a taxpayer subsidy like the bailouts of 2008 “may have declined or reversed in recent years” and, in the words of Mary J. Miller, the Treasury Department’s under secretary for domestic finance, “We believe these results reflect increased market recognition of what should now be evident – Dodd-Frank ended ‘too big to fail’ as a matter of law.”

But with just a little time to digest the GAO’s findings, much of the response has shifted to, “Not so fast.” ’

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Virtu Filing Shines Light on High-Frequency Trading

From Bloomberg

“High-frequency trading, a business that has been shrouded in secrecy because its biggest firms were private, is coming out of the dark.

Virtu Financial Inc., the New York-based automated market maker that tried and failed to buy Knight Capital Group Inc. in 2012, filed for an initial public offering yesterday, disclosing that it had earned money every day but one in the last five years. The company is seeking a valuation of about $3 billion, about twice as much as rival KCG Holdings Inc., which was created last year in the merger of Knight and Getco LLC, according to a person familiar with the matter.”

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Mt. Gox Meltdown Spells Doom for Bitcoin

From Bloomberg View

“The first thing to point out about the meltdown of the Mt. Gox Bitcoin exchange is that this is hardly the first time that massive amounts of currency have been stolen, or that a financial firm has shut down and left its depositors with basically nothing. This is not somehow unique to Bitcoin, or a fatal flaw in its design.

The second thing to point out about the meltdown of the Mt. Gox Bitcoin exchange is that no matter how much cheerleaders continue to insist that it doesn’t matter, it does. It matters a lot.”

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China's yuan surpasses euro as 2nd most-used currency in trade finance: SWIFT

From Reuters

“China's yuan currency overtook the euro in October, becoming the second-most used currency in trade finance, global transaction services organization SWIFT said on Tuesday.

The market share of yuan usage in trade finance, or Letters of Credit and Collection, grew to 8.66 percent in October 2013. That improved from 1.89 percent in January 2012.

The yuan, also known as the renminbi, now ranks behind the U.S. dollar, which remains the leading currency with a share of 81.08 percent.

The top five countries using the yuan for trade finance in October were China, Hong Kong, Singapore, Germany and Australia, SWIFT said in a statement.”

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Nine Systemically Important global insurers named by FSB

From Bobsguide

“Nine international insurers have been named as posing a risk to the global financial system by the Financial Stability Board (FSB), a panel of the G20 of leading economies. The ruling places them on the same elevated risk and capital requirement platform as the Systemically Important Financial Institution (SIFI) banks like Deutsche Bank or Citi.”

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