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596289f2702cde39a463601897480889 | https://www.reuters.com/article/us-deutsche-telekom-towers-idUKKCN0ZH4OM?edition-redirect=uk | Deutsche Telekom looks to sell off German mobile masts: sources | Deutsche Telekom looks to sell off German mobile masts: sources
By Arno Schuetze3 Min Read
FRANKFURT (Reuters) - Deutsche Telekom DTEGn.DE is preparing to sell thousands of German mobile phone masts in a potential 5 billion-euro ($5.5 billion) deal as it seeks to free up funds for investing in its European networks, two sources close to the matter said.
People walk past the logo of German telecommunications giant Deutsche Telekom AG seen at the Telekom's headquarters in Bonn February 25, 2016. REUTERS/Wolfgang Rattay/File Photo
The German company has appointed Goldman Sachs GS.N and Morgan Stanley MS.N to organize an auction of the German masts, which it plans to launch in the autumn and which it hopes will value the assets at 4-5 billion euros including debt, they said.
Deutsche Telekom is planning to send out first information packages on the business to prospective buyers after the summer break and will, depending on their feedback, decide on whether it sells all or just a stake in the business, or ultimately decides to keep it.
Goldman Sachs, Morgan Stanley and Deutsche Telekom declined to comment.
The group, which in 2012 sold its U.S. towers business to Crown Castle CCI.N for $2.4 billion, is not alone among the mobile network operators selling such infrastructure to raise capital and cut debt.
Telefonica Deutschland O2Dn.DETEF.MC in April agreed to sell its 2,350 towers to Telxius, which was set up by its Spanish parent Telefonica earlier this year to hold its 11,500 masts in Spain as well as some data centers and domestic subsea cables, with a view to a stock market listing or trade sale.
Telecom Italia said in May that it would decide within months on options for its remaining 60 percent stake in Infrastrutture Wireless Italiane (INWIT) INWT.MI.
And last year Carlos Slim's America Movil AMXL.MX spun off its wireless transmission towers and listed its shares on the Mexican stock market. The shares are down 14 percent since the IPO in late December.
Deutsche Telekom is expected to approach infrastructure investors as well as insurers and pension funds, whose appetite to buy regulated assets with secure cash flows has grown in the recent low-interest rate environment, the sources said.
Separately, Deutsche Telekom will approach private equity groups after having made good experiences with buyout groups in several situations, for example its online classifieds unit Scout24 G24n.DE, they said.
Groups specializing in managing mobile masts, such as American Tower AMT.N, Crown Castle CCI.N and SBA SBAC.O are also expected to be interested in the Deutsche Telekom sale, they added.
Deutsche Telekom is still in the process of separating out its German masts as a business and has not produced pro-forma standalone earnings figures yet.
“Despite certain shared usership agreements for individual sites, Deutsche Telekom has a certain freedom in defining how much it pays its towers subsidiary for the use of the service,” one of the people said.
The person added that the details of the leasing contracts as well as the assessment of how easily additional users for the masts can be attracted will also be factors in determining a potential valuation of the assets, they said.
(This version of the story was refiled to delete duplicate sourcing in final paragraph)
Additional reporting by Harro Ten Wolde and Peter Maushagen; Editing by Greg MahlichOur Standards: The Thomson Reuters Trust Principles.
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0a38967403517937f2f95c79ac123033 | https://www.reuters.com/article/us-deutsche-uranium-idUSBRE9BI0PF20131219 | Exclusive: Deutsche Bank talks with buyers for its uranium business | Exclusive: Deutsche Bank talks with buyers for its uranium business
By David Sheppard4 Min Read
LONDON (Reuters) - Deutsche Bank AG DBKGn.DE is holding preliminary talks with potential buyers of its uranium trading business - the first sign since announcing it was largely exiting commodities trading that parts of the operation are now on the block.
A man walks past Deutsche Bank offices in London December 5, 2013. REUTERS/Luke MacGregor
The bank’s uranium desk is one of the biggest third-party traders in the market, and holds substantial stockpiles of low-grade uranium, known as yellowcake, and numerous long-term deals with nuclear power plants.
The bank has had a number of expressions of interest in its uranium business, and expects to start a formal sales process early in the first quarter, sources familiar with the discussions said.
Deutsche Bank announced it was shuttering its global commodities trading business on December 5, cutting 200 jobs in the face of toughening regulations and lower profits. The majority of commodity traders have already left the bank.
The bank is retaining a core team known as the Special Commodities Group to wind down its operations, and will retain a number of purely financial commodities traders. The bank will also retain its precious metals business.
A Deutsche Bank spokesman declined to comment on the discussions surrounding the uranium business.
Goldman Sachs, the other major bank active in uranium trading, is also selling its nuclear fuel arm, but has said it remains committed to its J.Aron commodities franchise where many of its most senior executives started their careers.
URANIUM SALE
The sale will include Deutsche’s uranium trading book and stockpiles of yellowcake - known as U308 in the industry - worth about $200 million. At current prices that amounts to approximately 5.7 million lbs of the low-grade fuel.
That would be enough to fuel around 10 nuclear reactors producing 1000 megawatts each for between 12 and 18 months, industry sources said.
The banks uranium traders are not part of the initial discussions, but may go with the desk as part of any deal.
Deutsche is one of the biggest suppliers of longer-term deals to nuclear power plants in the market, and is also an active player in the spot market. All long-term deals would be honored as part of any sale.
Trading firms like Deutsche and Goldman buy and hold uranium stockpiles in warehouses specially licensed to hold the fuel, like U.S. conglomerate Honeywell International Inc's HON.N ConverDyn facility in Metropolis, Illinois; Cameco's CCO.TO Port Hope facility in Ontario; and French mining and energy firm Areva SA's AREVA.PA facility in France.
About 80 percent of global uranium supplies are traded via long-term contracts between producers and utilities, but around 20 percent of deals are done in the spot market, which sets the marginal price, according to the World Nuclear Association.
The sale comes as uranium prices languish at their lowest since 2005.
Spot prices of U3O8, a material that is converted to uranium hexafluoride for the purpose of uranium enrichment, have traded at $34-$35 a pound since September, less than half the price prior to the Fukushima disaster in Japan in 2011.
Financial firms started to get into the uranium business in the mid 2000s when uranium prices were rising on expectations demand for the fuel would grow during a so-called nuclear renaissance. The price of uranium surged last decade to peak at nearly $140 per pound in 2007.
That renaissance projected power companies around the world would have to build more nuclear reactors to meet strict rules limiting greenhouse emissions and falling fossil fuel supplies.
But a surge in cheap shale gas production in the United States, a lack of federal rules limiting carbon emissions, and the wide-ranging impact of the Fukushima disaster on the nuclear industry has hammered prices since 2011.
Nevertheless, the Deutsche Bank trading desk has been profitable in each of the last five years, sources say.
Editing by William HardyOur Standards: The Thomson Reuters Trust Principles.
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2d9fb05a66fa5da462d9d3085f72d0de | https://www.reuters.com/article/us-deutschebank-investigation-russia-exc/exclusive-u-s-congressional-probe-finds-possible-lapses-in-deutsche-bank-controls-sources-idUKKCN1VR0PX?edition-redirect=uk | Exclusive: U.S. congressional probe finds possible lapses in Deutsche Bank controls - sources | Exclusive: U.S. congressional probe finds possible lapses in Deutsche Bank controls - sources
By Mark Hosenball, Matt Scuffham, John O’Donnell5 Min Read
LONDON/NEW YORK (Reuters) - U.S. congressional investigators have identified possible failures in Deutsche Bank AG's DBKGn.D money laundering controls in its dealings with Russian oligarchs, after the lender handed over a trove of transaction records, emails and other documents, three people familiar with the matter said.
The congressional inquiry found instances where Deutsche Bank staff in the United States and elsewhere flagged concerns about new Russian clients and transactions involving existing ones, but were ignored by managers, two of the people said.
Lawmakers are also examining whether Deutsche Bank facilitated the funneling of illegal funds into the United States as a correspondent bank, where it processes transactions for others, one of the sources said.
The congressional probe, whose initial findings have not been previously reported, is at an early stage, and it is not yet clear whether it will lead to any action against the bank, the three sources said.
A Deutsche Bank spokesman, Troy Gravitt, said the bank cannot comment on the work of the congressional committees but remains committed to cooperating with authorized investigations.
Addressing past deficiencies in the bank’s controls, the spokesman said: “We have worked to address them, taken disciplinary measures with regards to certain individuals and reviewed our client onboarding and monitoring processes.”
The House of Representatives Financial Services Committee declined to comment.
The Democrat-controlled House began examining possible money laundering in U.S. property deals involving President Donald Trump, a Republican, earlier this year. The lawmakers are also looking into whether Trump’s dealings left him subject to the influence of foreign individuals or governments.
The White House and a Trump Organization spokeswoman, Amanda Miller, did not respond to requests for comment.
The headquarters of Germany's Deutsche Bank is photographed early evening in Frankfurt, Germany, January 26, 2016. REUTERS/Kai Pfaffenbach/File Photo
Deutsche Bank has been drawn into the inquiry as Trump’s biggest lender and submitted documents to investigators in response to a subpoena.
The stakes are high for the German lender, which is trying to engineer a turnaround under Chief Executive Officer Christian Sewing after a multi-year bet on building a global investment banking business unraveled.
Graham Barrow, a financial crime consultant, said that while the bank had since sought to reform, it had taken too many risks in countries such as Russia.
“The bank decided to go for becoming a global investment bank,” Barrow said. “They were compromised.”
Deutsche Bank declined to comment on Barrow’s view.
In 2017, Deutsche Bank agreed to pay regulators in the United States and Britain $630 million in fines for organizing $10 billion in sham trades that could have been used to launder money out of Russia. Two of the sources said that the preliminary findings of the congressional investigators may have some overlap with that case but also include lapses unrelated to that matter.
New evidence thrown up by the congressional probe could feed into further investigations by other authorities, regulatory experts said.
If evidence of wrongdoing is found, it could also harm the bank’s efforts to strengthen its relationships with U.S. regulators and deter investors concerned about the possibility of future regulatory sanctions. Deutsche Bank’s shares hit an all-time low last month.
CONGRESSIONAL SUBPOENA
Earlier this year, the House Financial Services Committee served a 12-page subpoena on Deutsche Bank. Reuters has seen a version with portions blacked out.
Lawmakers requested documents that identify “any financial relationship, transactions, or ties” between Trump, his family members and his companies and “any foreign individual, entity, or government”, according to the subpoena.
It also asks for hundreds of documents relating to other bank clients, including Russian oligarchs, the three sources said. These documents include account applications, know-your-client money laundering checks, internal assessments of “suspicious activity”, as well as information about loans and mortgages, according to the subpoena.
Although Trump has challenged the release of his banking records in court, in April Deutsche started handing over information that is not directly related to the president and is continuing to do so, one of the people said.
That includes material prepared by bank staff for filing so-called suspicious activity reports to the U.S. Treasury Department and documents about Russian deals circulated among the bank’s management and reputational risk committee, one person said.
The bank has also assembled a large amount of the subpoenaed Trump material, pending the court’s decision on whether it should be released, the three people said.
The House Financial Services Committee will continue its investigation of Deutsche Bank’s money laundering processes regardless of whether the court rules the lender should hand over the Trump documents to investigators, three sources familiar with the investigation said.
Reporting by Mark Hosenball, Matt Scuffham and John O’Donnell; editing by Paritosh Bansal and Grant McCoolOur Standards: The Thomson Reuters Trust Principles.
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e4808dc74ec6316b1824d38c3c4aa442 | https://www.reuters.com/article/us-deutscheboerse-eex-idUSTRE71M3W020110223 | Deutsche Boerse unit buys majority in EEX | Deutsche Boerse unit buys majority in EEX
By Reuters Staff2 Min Read
FRANKFURT (Reuters) - Deutsche Boerse on Wednesday said derivatives unit Eurex Zuerich AG will take a majority stake in energy exchange EEX, cutting the exchange operator’s dependence on trading stocks and derivatives.
In December Eurex secured an option to buy a stake of up to 22.96 percent in the EEX from Landesbank Baden-Wuerttemberg (LBBW), a move that could hand Eurex a 58.19 percent stake in EEX.
Eurex said its stake would rise to a majority from its current stake of 35.2 percent, but could not say to what level given the continuation of the tender period.
Eurex said the shares are to be transferred at a price of 7.15 euros per share plus a premium of 0.60 per share.
In December Eurex said the transaction will cost up to 71.3 million euros ($93.65 million), expanding its reach into fast-growing commodities markets.
EEX and Eurex are already cooperating in trading and clearing of emission rights and power derivatives.
EEX, a Franco-German exchange, accounts for power trading equivalent to a third of European consumption. Its activities span power trading in continental Europe, which has been linked to the Nordic region and the UK via cables, and already reaches through to Hungary.
Eurex is a joint venture between Switzerland-based SIX Swiss Exchange and Frankfurt-based Deutsche Boerse.
Reporting by Edward TaylorOur Standards: The Thomson Reuters Trust Principles.
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c9c2266f2c08946b29b6e61e439c8042 | https://www.reuters.com/article/us-devon-energy-results/devon-energy-posts-bigger-loss-on-2-8-billion-asset-writedown-cuts-output-view-idUSKBN22H2W7 | Devon Energy posts bigger loss on $2.8 billion asset writedown, cuts output view | Devon Energy posts bigger loss on $2.8 billion asset writedown, cuts output view
By Reuters Staff2 Min Read
FILE PHOTO: A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma, September 15, 2015. REUTERS/Nick Oxford
(Reuters) - Oil and gas producer Devon Energy DVN.N posted a bigger quarterly loss on Tuesday as it took an asset writedown of $2.8 billion and said it expects to cut 10,000 barrels of a day in the second quarter as oil prices crater.
The company also cut its 2020 production forecast to between 300,000 to 319,000 barrels of oil equivalent per day (boepd) from 328,000 to 339,000 boepd.
The Oklahoma-based company, which has been selling its assets to become a pure-play U.S. oil producer, has cut its annual budget twice in March.
With the oil prices at their lowest in decades due to weak demand as well as a supply glut, it has also put off activities across its portfolio except at its assets in the Permian’s Delaware Basin.
Most shale companies have cut their annual budget, slashed or suspended dividends and reduced jobs as they try to shore up cash.
Net loss attributable to the company rose to $1.82 billion, or $4.82 per share, in the first quarter, from $317 million, or 74 cents per share, a year earlier. [bit.ly/2YBAQxC]
Total production rose to 348,000 boepd from 313,000 boepd a year earlier, led by output from the Delaware Basin.
Reporting by Shanti S Nair in Bengaluru; Editing by Vinay Dwivedi and Arun KoyyurOur Standards: The Thomson Reuters Trust Principles.
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dd27e63c129d011c81c44ce2d80326f0 | https://www.reuters.com/article/us-dfj-probe/jurvetson-quits-vc-firm-dfj-on-leave-from-tesla-amid-harassment-probe-idUSKBN1DD2US | Jurvetson quits VC firm DFJ, on leave from Tesla amid harassment probe | Jurvetson quits VC firm DFJ, on leave from Tesla amid harassment probe
By Reuters Staff2 Min Read
(This version of the November 13th story corrects paragraph 3 to remove incorrect reference to SpaceX being owned by Tesla)
(Reuters) - Steve Jurvetson on Monday resigned from venture capital firm Draper Fisher Jurvetson (DFJ) and took a leave of absence from the boards of Tesla Inc TSLA.O and SpaceX amid an internal probe into sexual harassment allegations made against him.
Jurvetson, founding partner of DFJ, denied the allegations and said in a tweet on Monday, "I am leaving DFJ to focus on personal matters, including taking legal action against those whose false statements have defamed me." (bit.ly/2zVC0Zx)
DFJ, which has invested in SpaceX, said three weeks back that it had started an independent probe after it came to know about “indirect and second-hand allegations” against Jurvetson.
“As of today and by mutual agreement, Steve Jurvetson will be leaving DFJ,” a spokeswoman for the Menlo Park, California-based firm said in an e-mailed statement.
A Tesla spokesperson said by e-mail, “Steve Jurvetson is on a leave of absence from the SpaceX and Tesla boards pending resolution of these allegations.”
Reporting by Laharee Chatterjee in Bengaluru and Heather Somerville in San Francisco; Editing by Savio D’SouzaOur Standards: The Thomson Reuters Trust Principles.
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3fda3dcb4de9ab225928be740f4260f5 | https://www.reuters.com/article/us-diabetes-coach-idINSAT28214320071102 | Diabetes "coach" may help diabetic teenagers | Diabetes "coach" may help diabetic teenagers
By Reuters Health2 Min Read
NEW YORK (Reuters Health) - A “personal trainer” can enhance an adolescent’s motivation and capability of managing diabetes, according to a randomized trial sponsored by the National Institutes of Health.
Dr. Tonja R. Nansel, at the National Institute of Child Health and Human Development in Bethesda, Maryland, and colleagues developed a program to provide young type 1, or “insulin-dependent,” diabetics with one-on-one interaction with a facilitator to improve self-monitoring, goal-setting, and problem-solving.
The facilitators were called “personal trainers” to “emphasize the development of strengths rather than the amelioration of deficits,” the researchers explain in a report in the medical journal Diabetes Care. The facilitators received 80 hours of training in the use of motivational interviewing, behavior analysis, and problem solving.
Eighty-one adolescents with type 1 diabetes, aged 11 to 16 years, were randomly assigned to usual care or to six sessions with a personal diabetes trainer.
Having a personal diabetes trainer appeared to have a healthy impact on blood sugar levels, the team reports. However, the between-group difference in blood sugar favoring the personal training group was significant only in the older children, aged 14 to 16 years, at the first evaluation conducted up to 9 months after the start of the study.
However, the children in the study and their parents were enthusiastic about the program, many of them wishing that the intervention had lasted longer.
“The outcomes suggest that self-management skills are a relevant and important target for improving blood (sugar) control during adolescence,” Nansel’s team concludes.
SOURCE: Diabetes Care, October 2007.
Our Standards: The Thomson Reuters Trust Principles.
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b1cfc5306dcc2206b5d07ed0ad0f7db9 | https://www.reuters.com/article/us-diageo-deleon-idUSBREA070KO20140108 | Diageo joins with Diddy for a second drink, DeLeon tequila | Diageo joins with Diddy for a second drink, DeLeon tequila
By Martinne Geller4 Min Read
LONDON (Reuters) - Diageo PLC DGE.L and celebrity rapper turned business mogul Sean "Diddy" Combs have jointly bought luxury U.S. tequila brand DeLeon, hoping to repeat the success they have had with the company's fast-growing Ciroc vodka.
Kellie Pickler and Sean "Diddy" Combs present the award for vocal group of the year at the 47th Country Music Association Awards in Nashville, Tennessee November 6, 2013. REUTERS/Harrison McClary
The American record producer, actor and entrepreneur became the face of Ciroc in 2007 under a joint marketing and profit-sharing deal which has brought a near 40-fold rise in annual sales volumes for the brand’s products.
“With Ciroc, we dated. Now with DeLeon, we’re married,” Combs said in an interview. “This deal is way better. This makes me a true owner.”
Financial terms were not disclosed on Wednesday, but the purchase of the DeLeon brand takes Diageo an albeit tiny step towards replacing the sales and profit lost last year when it stopped selling Jose Cuervo, the world’s top-selling tequila.
Diageo, the world’s biggest distilled drinks company, let its distribution agreement with Cuervo’s owner, the Beckmann family expire after failing to get an equity stake.
“For me, it’s all about the profitability,” said Diageo North America President Larry Schwartz, who told Reuters last year that his personal goal was to replace the profit from Cuervo within two years.
This week, he stood by that target, citing Combs’s track record of success, the likelihood that Diageo will buy or launch another tequila, and DeLeon’s high price. Combs’s favorite version, the anejo, sells for about $200 per bottle.
“If we can get the accelerator on DeLeon like we had on Ciroc, two years is within reason,” Schwartz said, adding that “this isn’t going to be the last entry into tequila for Diageo going forward”. Diageo also owns half of the Don Julio brand with the Beckmann family.
SECOND DEAL WITH COMBS
Since Diageo brought Combs on board Ciroc sales have grown from 50,000 nine-liter cases a year to nearly 2 million.
So when Combs approached Diageo with the idea of buying DeLeon, the company behind Johnnie Walker Scotch and Smirnoff vodka listened.
“Sean (Combs) is a proven growth driver,” Schwartz said.
About 85 percent of the world’s tequila is drunk in its home nation of Mexico and the United States. U.S. imports of tequila increased by nearly 72 percent to 12.3 million cases in the 10 years to 2012, according to the Distilled Spirits Council of the United States, fuelled by the emergence of high-end and super-premium brands. Mass-priced tequilas like Jose Cuervo, have lagged.
Other tequilas include Patron, Beam Inc's BEAM.N Sauza, Bacardi's Cazadores, Brown Forman Corp's BFb.N Casa Herradura and Pernod Ricard's PERP.PA Olmeca.
DeLeon was founded in 2008 when Brent Hocking, an American with a background in mortgage lending, bought a distillery in Mexico. It now comes in five varieties, the cheapest of which has a suggested retail price of $120 per bottle. It sells in selected U.S. states at about 10,000 cases a year.
However, changes are already afoot on marketing the drink, with DeLeon's previously risque website now closed for an overhaul. deleontequila.com/
“Everything has to meet the Diageo marketing standard,” Schwartz said. “We bought the brand, not the marketing plans.”
Editing by Greg MahlichOur Standards: The Thomson Reuters Trust Principles.
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3559444372bb6d6bc8aef5413c8fb937 | https://www.reuters.com/article/us-dialog-results-idUSKCN1QN0K7?utm_campaign=trueAnthem:+Trending+Content&utm_content=5c7faa8e1adf640001fd9149&utm_medium=trueAnthem&utm_source=twitter | Dialog Semi, smaller after Apple deal, targets new growth areas | Dialog Semi, smaller after Apple deal, targets new growth areas
By Douglas Busvine5 Min Read
FRANKFURT (Reuters) - Dialog Semiconductor is targeting new growth opportunities from home healthcare to gaming consoles following a $600 million deal to cut its exposure to Apple, CEO Jalal Bagherli told Reuters on Wednesday.
Dialog semiconductor logo is pictured at a company building in Germering near Munich, Germany August 15, 2016. REUTERS/Michaela Rehle
The Anglo-German chip designer struck the deal in October with Apple, which accounts for three-quarters of its revenue, helping it to weather an iPhone sales downturn better than other suppliers to the smartphone maker.
Dialog said the business that will remain after it transfers a team of programmers and patents to Apple should show strong growth in 2019, weighted towards the second half.
This upbeat outlook helped to lift Dialog’s shares, which were up more than 5 percent by 1400 GMT, providing a rare boost for the semiconductor industry, which has been through a rough patch.
Dialog joins a small but growing number of chipmakers forecasting stronger demand later in the year, in a sector hit by the U.S.-China trade dispute and weakness in the car and smartphone industries.
Nvidia and AMD have both given optimistic 2019 outlooks in the past few weeks.
CONNECTED HEALTH
Dialog is working with four pharmaceuticals firms to develop connected health applications, as well as with two gaming companies to provide power chips for their next gaming consoles, Bagherli said.
The connected health devices would monitor blood pressure, check glucose levels or administer insulin doses for diabetic patients without them having to visit a hospital, he said in an interview.
Related CoverageDialog Semi eyes opportunities in connected health, gaming: CEO
These are part of the so-called Internet of Things - or smart devices and sensors that can be managed remotely and are expected to proliferate as fifth-generation mobile networks are launched in the years ahead.
The Apple deal, expected to close in the first half of the year, will hand Dialog a cash windfall to back its transition to a smaller, more diversified business.
“We find this transformation of Dialog’s business compelling, and think its current valuation overly discounts the risk associated with the company’s evolving business model,” Barclays analyst Andrew Gardiner said in a note.
Gardiner holds an “overweight/neutral” rating on the stock.
Dialog earlier forecast a single-digit percentage decline in revenue this year, reflecting weaker iPhone sales. This forecast topped a consensus view among analysts for a 9 percent fall.
Apple had shocked the sector in November by warning of slow year-end sales and did so again on Jan. 3 when it issued its first sales warning in 12 years, blaming weaker iPhone sales in China.
Those warnings hit shares in other European suppliers, like Austria’s AMS, while weak automotive markets have also weighed on larger players like Infineon and STMicroelectronics.
Some industry players have forecast a quick, V-shaped rebound in demand although persistent weakness in measures of industrial activity such as purchasing managers indexes and inventory builds suggest a recovery may be slow.
Dialog expects first-quarter revenue of $270-$310 million, representing a more pronounced than usual seasonal slowdown, with gross margins broadly in line with the 2018 figure.
NEW PRODUCTS
Dialog is also looking to boost sales of mixed-signal integrated circuits, which can be configured by users. This business, which Dialog entered with the takeover of U.S. company Silego, is growing well, Bagherli said.
The company is seeking opportunities for its power-management chips from folding smartphones unveiled at last week’s Mobile World Congress in Barcelona. These will carry two or three battery cells that need managing, he said.
Asked about how Dialog would use the cash windfall from the Apple deal, Bagherli said he would spend some on acquisitions.
He is looking at targets in Internet of Things connectivity - in narrowband radio and WiFi - to back up Dialog’s existing strengths in Bluetooth. A follow-on deal to bolster Silego’s franchise would also make sense, he added.
Dialog reported a 2 percent rise in fourth-quarter operating profits. Revenues were down 7 percent.
Based on its divisional performance, mobile sales fell 13 percent in the fourth quarter, mainly due to a decline in sales of main PMICs to Apple.
Taken together, other divisions showed a 20 percent rise in sales, although this was buoyed by the contribution from the Silego takeover in late 2017.
Reporting by Douglas Busvine; Editing by Riham Alkousaa, Jason Neely/Jan Harvey/Jane MerrimanOur Standards: The Thomson Reuters Trust Principles.
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02b20d4926ee27d0193d584cee010d7a | https://www.reuters.com/article/us-diamondback-results-idUKKCN1UW281?edition-redirect=uk | Diamondback Energy profit rises 77% on higher production | Diamondback Energy profit rises 77% on higher production
By Reuters Staff1 Min Read
(Reuters) - Diamondback Energy Inc reported a 77% rise in quarterly adjusted profit on Tuesday, as the Permian-basin focused oil producer benefited from higher output.
Adjusted net income rose to $280 million, or $1.70 per share, in the second quarter ended June 30, from $158 million, or $1.59 per share, a year earlier.
Production rose to 280,400 barrels of oil equivalent per day (boepd) from 112,600 boepd a year earlier.
Reporting by Debroop Roy in Bengaluru; Editing by Shinjini GanguliOur Standards: The Thomson Reuters Trust Principles.
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e6cf7fb4b0207f1b3af3865cfa29608a | https://www.reuters.com/article/us-diamonds-investment/diamonds-the-new-gold-for-rich-investors-idUSKBN1CE2N1 | Diamonds - the new gold for rich investors? | Diamonds - the new gold for rich investors?
By Reuters Staff3 Min Read
LONDON (Reuters) - Diamonds can at last be an investor’s best friend, the Singapore Diamond Investment Exchange (SDIX) said on Tuesday, as it launched a new standardized form of the precious stones to rival gold ingots as a safe-haven alternative to cash.
The industry says diamonds are the world’s most concentrated form of wealth, but investors have long viewed them as less useful as a store of value than gold because each stone is different, making its value subjective and trading difficult.
Alain Vandenborre, chairman and founder of SDIX, says technology has solved that problem and diamonds can now become “the new gold”.
Diamond Bullion, produced by the Singapore Diamond Mint, is a collection of investment grade diamonds whose value can be quickly checked. Denominations will initially range between $100,000 and $200,000, with higher and lower values possible in future.
The diamonds are stored in a credit card-sized device containing a chip that allows immediate valuation based on exchange trading and instant authentication, which is crucial as synthetic diamonds have no resale value.
A mark on the Diamond Bullion developed by the International Institute of Diamond Grading and Research (IIDGR), which is part of Anglo American’s De Beers Group, provides a further guarantee.
De Beers, the world’s biggest diamond producer by value and a leader in equipment that grades and authenticates diamonds, traditionally sold its gems to a limited group of trusted individuals called sightholders.
Diamond trading has gradually become more open.
In 2008, De Beers began selling rough diamonds through online auctions and in June this year began auctioning polished stones too.
SDIX, launched in 2016, says it is the world’s first and only electronic exchange for trading investment-grade diamonds.
Diamond miners in principle welcomed Diamond Bullion.
“Anything that can bring transparency to the diamond price is a good thing,” said Karl Smithson, CEO of Stellar Diamonds, which has a diamond-mining project in Sierra Leone.
Reporting by Barbara Lewis in London and Yiming Woo in Singapore; Editing by Mark PotterOur Standards: The Thomson Reuters Trust Principles.
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c3833028e7ed69c8bddf649fad84b28e | https://www.reuters.com/article/us-dicks-sporting-dividend/dicks-sporting-goods-resumes-paying-dividend-as-stores-reopen-idUKKBN23J20W?edition-redirect=uk | Dick's Sporting Goods resumes paying dividend as stores reopen | Dick's Sporting Goods resumes paying dividend as stores reopen
By Reuters Staff1 Min Read
FILE PHOTO: A Dick's Sporting Goods store is closed due to the outbreak of coronavirus disease (COVID-19) in Washington, DC, U.S. April 10, 2020. REUTERS/Joshua Roberts
(Reuters) - Dick's Sporting Goods Inc DKS.N said on Friday it would resume paying shareholders a quarterly dividend, citing strong early sales at its stores that have reopened amid easing coronavirus-driven restrictions.
The company’s shares, which have lost more than a quarter of their value this year, rose 8% in premarket trading.
Like a big portion of corporate America, Dick’s had suspended its dividend and share buyback program earlier this year to shore up its cash reserves, as restrictions to curb the spread of the coronavirus brought brick-and-mortar retail to a virtual standstill.
The sporting goods retailer said it expects to have nearly all its stores reopened by the end of the month and has restored previously cut salaries for all its employees, except certain executives. The company has also returned nearly all its employees from furlough.
Dick’s said it would pay a dividend of $0.3125 per share, unchanged from last quarter, on June 30.
Reporting by Uday Sampath in Bengaluru; Editing by Amy Caren DanielOur Standards: The Thomson Reuters Trust Principles.
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80d8d4419063cd1299d4c2a223a2f98c | https://www.reuters.com/article/us-didi-chuxing-japan/didi-chuxing-to-trial-japan-premium-service-with-tesla-mercedes-cars-idUSKBN1XT101 | Didi Chuxing to trial Japan premium service with Tesla, Mercedes cars | Didi Chuxing to trial Japan premium service with Tesla, Mercedes cars
By Reuters Staff1 Min Read
FILE PHOTO: The logo of Didi Chuxing is seen at a Didi station in Beijing, China January 2, 2019. REUTERS/Jason Lee
BEIJING (Reuters) - China’s Didi Chuxing will trial a premium ride hailing service in Japan offering Tesla, Lexus and Mercedes Benz vehicles, a company representative said.
The ride-hailing firm will roll out a “DiDi Premium” trial later this month in some areas in Tokyo in a move to diversify its operations in Japan, the representative told Reuters via a text message on Tuesday.
It will use premium vehicles including Tesla Model S sedans, Mercedes Benz S-class sedans and Lexus LS series sedans, and Didi hopes to eventually expand it to other major Japanese cities.
Besides Tokyo, Didi offers taxi-hailing services in Osaka, Kyoto and Nagoya.
In July, Lexus parent firm Toyota said it would invest $600 million in Didi Chuxing and a new joint venture as the companies seek to develop connected and electric vehicle technologies in China.
Tesla started to take orders for Model 3 vehicles in Japan in May.
Reporting by Yilei Sun and Brenda Goh; editing by Jason NeelyOur Standards: The Thomson Reuters Trust Principles.
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ea2d810d68477eb7fc1eaaa86fee8c7b | https://www.reuters.com/article/us-didi-japan/chinas-didi-to-launch-japan-food-delivery-service-from-april-idUSKCN20J0GQ | China's Didi to launch Japan food delivery service from April | China's Didi to launch Japan food delivery service from April
By Reuters Staff1 Min Read
Logo of Didi Chuxing is seen at its headquarters building in Beijing, China August 28, 2018. REUTERS/Jason Lee
BEIJING (Reuters) - China's ride hailing company Didi Chuxing plans to launch a food delivery service in Japan from April, the firm, backed by SoftBank Group Corp 9984.T, said on Tuesday, as it seeks to grow its overseas business.
“DiDi begins recruiting food delivery partners in Osaka, Japan on Feb 25 and plans to officially launch this service in the city in early April,” a company representative told Reuters.
Reporting by Yilei Sun and Brenda Goh; Editing by Clarence FernandezOur Standards: The Thomson Reuters Trust Principles.
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59cc307998ce871b1c38d29887d9ea3b | https://www.reuters.com/article/us-diet-cancer-idUSTRE62O4FR20100325 | A healthy diet may trim breast cancer risk | A healthy diet may trim breast cancer risk
By Lynne Peeples, Reuters Health4 Min Read
NEW YORK (Reuters Health) - A woman may not be able to change her family history of breast cancer, but she can typically control what she eats and drinks. And consuming more vegetables and whole grains -- and less alcohol -- just might trim her chances of getting the disease, according to an analysis of published studies.
Organic vegetables are shown at a Whole Foods Market in LaJolla, California in this May 13, 2008 file photo. REUTERS/Mike Blake/Files
“As the incidence of breast cancer continues to rise, with many of the risk factors for the disease non-modifiable, potentially modifiable risk factors such as diet are of interest,” Dr. Sarah Brennan of Queen’s University Belfast in Northern Ireland, who led the analysis, noted in an email to Reuters Health.
It’s estimated that more than 120 out of every 100,000 American women are diagnosed with breast cancer each year, yielding a lifetime risk of about 1 in 8. The idea that diet might influence these numbers is not new; yet solid evidence for such a link has remained elusive.
“Even though we have hypothesized a relationship between diet and the risk of breast cancer, showing it has been very hard to do,” Dr. Michelle Holmes, an epidemiologist at Harvard Medical School in Boston who was not involved in the study, told Reuters Health. Individual studies are often too small to uncover modest relationships; combining them, however, offers a better chance of detecting a diet’s true effects.
After carefully reviewing the relevant research to date, Brennan and her colleagues pooled the results of 18 studies that enrolled a total of more than 400,000 people. Each study aimed to associate breast cancer risks with at least one common dietary pattern: the “unhealthy” Western diet (high in red meats and refined grains), a more prudent “healthy” diet (high in fruits, vegetables and whole grains), or varying levels of alcohol drinking.
Since foods and beverages are never consumed in isolation, this more holistic view of intake better reflects a person’s diet than looking at particular nutrients, Brennan and her colleagues explain in the American Journal of Clinical Nutrition.
The team found an 11 percent lower risk of breast cancer among women in the highest versus lowest categories of the prudent diet, while those consuming larger amounts of wine, beer and spirits had a 21 percent increased risk -- a relationship that has been highlighted in many previous studies. Surprisingly, no overall risk difference was seen between high and low categories of the Western diet.
Related CoverageGene test helps select breast cancer chemotherapy
Just how a healthy diet might lower breast cancer risk is not well understood. Alcohol’s link, on the other hand, is generally known: Estrogen levels are higher in postmenopausal women who drink alcohol, noted Holmes. And a higher lifetime exposure to estrogen has been tentatively linked to the disease.
Brennan stressed that these findings need to be interpreted cautiously, noting that there are inherent statistical problems in combining the results of multiple studies, in addition to the limitations of each included study, such as recall bias. She pointed to the need for more carefully designed studies in the future to further examine the diet-breast cancer link.
In the meantime, Holmes said: “Consuming a prudent, healthy diet that includes lots of fruits, vegetables and whole grains is a wise idea, because there is lots of scientific evidence that it prevents heart disease and diabetes. This study shows that an additional benefit might be a small decrease in breast cancer risk.”
SOURCE: American Journal of Clinical Nutrition, March 10, 2010
Our Standards: The Thomson Reuters Trust Principles.
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9e23c96f7f94769a9d48ab3592f38329 | https://www.reuters.com/article/us-digitalfirst-m-a-apollo-global-exclus/exclusive-apollo-in-the-lead-to-buy-digital-first-media-sources-idUSKBN0MC2C120150316 | Exclusive: Apollo in the lead to buy Digital First Media - sources | Exclusive: Apollo in the lead to buy Digital First Media - sources
By Greg Roumeliotis, Liana B. Baker3 Min Read
(Reuters) - Buyout firm Apollo Global Management LLC is in advanced talks to acquire most of the assets of Digital First Media, publisher of the Denver Post and San Jose Mercury News, for around $400 million, according to people familiar with the matter.
The potential deal illustrates private equity’s interest in the newspaper industry. Even though newspaper readership is declining, buyout firms say they believe they can squeeze out a profit through cost cuts and new digital offerings.
Apollo has so far prevailed over rival Cerberus Capital Management LP in the auction for Digital First Media, the people said.
Digital First Media has annual earnings before interest, taxes, depreciation and amortization (EBITDA) of $125 million, the people said. Assets generating $25 million in annual EBITDA are, however, being excluded from the sale, the people added. It could not be learned what those excluded assets were.
The negotiations could still fall apart or the outcome could change, the people cautioned, asking not to be named because the matter is not public. Representatives of Digital First Media, Apollo and Cerberus declined to comment.
The newspaper business has suffered as more people choose to read news on laptops, smartphones and tablets, and as advertisers turn to digital media to reach audiences.
Media companies including Gannett Co Inc, News Corp, Time Warner Inc and Tribune Media Co have spun off print businesses in recent years to focus on faster growth assets such as broadcasting.
Digital First Media, the second-largest U.S. newspaper chain by circulation, reaches 67 million Americans each month across 15 states, according to its website. Its newspapers include the Los Angeles Daily News, St. Paul Pioneer Press and the New Haven Register, according to its website.
New York-based Digital First Media, which is controlled by the hedge fund Alden Global Capital, said last September it was exploring strategic alternatives and had hired UBS AG as financial adviser.
More deals for newspaper companies are expected. New York media and real estate magnate Mortimer Zuckerman said last month he might sell the New York Daily News and had hired the bank Lazard Ltd as an adviser.
Last month, New Media Investment Group Inc bought Stephens Media LLC, publisher of eight daily newspapers including the Las Vegas Review-Journal, 65 weeklies and 50 websites, from the private equity arm of Stephens Inc for $102.5 million in cash.
Reporting by Greg Roumeliotis and Liana B. Baker in New York; Editing by Steve OrlofskyOur Standards: The Thomson Reuters Trust Principles.
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b47f4cc8889cebcccad780d8d7d8e253 | https://www.reuters.com/article/us-digitalglobe-results-idUSKCN0VY2S1 | Satellite imagery provider DigitalGlobe's revenue, profit beat | Satellite imagery provider DigitalGlobe's revenue, profit beat
By Ankit Ajmera3 Min Read
(Reuters) - U.S. satellite imagery provider DigitalGlobe Inc DGI.N reported a better-than-expected quarterly profit, helped by lower costs and improved performance in its international defense and intelligence business.
The company, which provides location-based services to Apple AAPL.O and Alphabet GOOGL.O, said it expected 2016 revenue of $670 million-$700 million. Analysts on average were expecting $700.7 million, according to Thomson Reuters I/B/E/S.
The company forecast adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of $330 million to $355 million, largely below the average analyst estimate of $353.7 million.
DigitalGlobe, which offers high-resolution imagery with four satellites, said it was on schedule to launch its fifth Worldview-4 satellite in September.
The new satellite is expected to increase annual revenue by $38 million after it is operational, Chief Executive Jeffrey Tarr told Reuters.
The company has signed $335 million in contracts and letters of intent for the new WorldView-4 satellite, he said.
DigitalGlobe said it also renewed two of its three large customer contracts within its location-based services business in the beginning of the current quarter. The business provides satellite imagery to digital mapmakers and is part of the company’s smaller diversified commercial business.
The company's location-based services has been a drag on its results, partly due to a delay in renewing a contract with Microsoft Corp MSFT.O in 2015.
“With those signings, we have meaningfully de-risked our location-based services business going into 2016,” Tarr said.
In January, DigitalGlobe announced it created a joint venture with two Saudi Arabian organizations to develop a network of six small satellites that will be eventually be able to revisit key areas of the globe 40 times a day.
Each of the company’s four existing satellites orbits the earth about 15 times per day currently.
The company said revenue from its international defense and intelligence business, part of its diversified commercial business, grew 31 percent in the quarter due to higher sales in the Middle East.
DigitalGlobe, which reduced its workforce by less than 10 percent in 2015, said selling, general and administrative expenses dropped 13 percent.
DigitalGlobe’s net income available to common shareholders fell to $9.2 million, or 13 cents per share, in the fourth quarter, from $10.7 million, or 14 cents per share, a year earlier.
Revenue fell 2.2 percent to $181.7 million.
Analysts on average had expected earnings of 8 cents, on revenue $173.1 million.
Reporting by Ankit Ajmera in Bengaluru; Editing by Maju SamuelOur Standards: The Thomson Reuters Trust Principles.
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6d7d47eda9aad360eccab3c6dcf77b99 | https://www.reuters.com/article/us-digitalglobe/digitalglobe-geoeye-shares-jump-on-7-3-billion-govt-order-idUKTRE6782XL20100809 | DigitalGlobe, GeoEye shares jump on $7.3 billion govt order | DigitalGlobe, GeoEye shares jump on $7.3 billion govt order
By Divya Sharma, A.Ananthalakshmi4 Min Read
BANGALORE (Reuters) - Shares of DigitalGlobe DGI.N and GeoEye Inc GEOY.O touched life-time highs on Monday after the companies received $7.3 billion worth of orders to supply satellite imagery to U.S. intelligence agencies.
The companies received the new contracts under the U.S. National Geospatial Intelligence Agency (NGA) EnhancedView program, which also calls for the construction of new satellites by these companies.
EnhancedView, also called the ‘two-plus-two’ program, is a U.S. government initiative to increase the use of imagery procured through the only two commercial providers in the country - DigitalGlobe and GeoEye.
“The contract will have a significant impact on our revenue and growth profile both for the balance of 2010 and over the long-term,” said Jill Smith, chief executive of DigitalGlobe, on a conference call with analysts.
The company said the contract provides it the ability to double its 2009 revenue of $281.9 million in three to five years.
DigitalGlobe won about $3.55 billion worth of orders and raised the lower end of its 2010 forecast, while GeoEye’s contract is worth about $3.8 billion.
“This award reflects the fact that the commercial sector has proven itself an efficient provider of satellite imagery and services,” said Dougherty Markets analyst Jeff Evanson.
“It supports our long-term thesis on these stocks, which revolves around the fact that satellite imagery is becoming increasingly necessary for various government organizations and that there is a growing gap between imagery supply and demand,” said Evanson.
On the call, DigitalGlobe said its imaging capacity will increase by 60 percent by 2015 with the launch of the new satellite and addition of more ground terminals globally.
It will spend about $625 million between 2010 and 2014, including the launch of its next satellite, WorldView-3.
Both companies count the NGA as their biggest customer. They also sell images to location-based applications such as Google GOOG.O Maps and Microsoft's MSFT.O Virtual Earth, and navigation device makers like Garmin GRMN.O and Nokia NOK1V.HE.
The companies, which dominate the U.S. imagery market, compete with international rivals such as France’s Spot Image, Indian Space Research Organization and Netherlands Antilles-based ImageSat International.
CONTRACT DETAILS
The contracts will be effective September 1 and have a 10-year term, including nine one-year options exercisable by the NGA.
DigitalGlobe said it would immediately begin procurement and construction of its next satellite, WorldView-3, which it expects to launch by the end of 2014.
The NGA will have access to about 50 percent of the WorldView constellation for the first four years, and 60 percent with the launch of its new satellite, it said in a regulatory filing.
GeoEye will start work on its GeoEye-2 satellite, toward which the NGA will contribute up to 40 percent of the construction costs. The new satellite is expected to begin delivering imagery in early 2013.
DigitalGlobe shares rose $3.88 at $31.60 Monday on the New York Stock Exchange. They rose as much as 15 percent to a high of $31.91 earlier in the session.
GeoEye shares surged 22 percent to touch a high of $39.14 on Nasdaq.
Some of the upside to the stocks was also due to the size and timing of the EnhancedView contract. The companies had earlier said the contract would be awarded only late this year and impact to results would be felt from the fourth quarter.
Additional reporting by Fareha Khan in Bangalore; Editing by Jarshad Kakkrakandy and Saumyadeb ChakrabartyOur Standards: The Thomson Reuters Trust Principles.
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2d63d665618ca856beba57bd5eb10ca8 | https://www.reuters.com/article/us-directchassislink-m-a-apolloglobal/apollo-global-to-buy-direct-chassislink-in-2-5-billion-deal-sources-idUSKCN1QO0XN | Apollo Global to buy Direct ChassisLink in $2.5 billion deal: sources | Apollo Global to buy Direct ChassisLink in $2.5 billion deal: sources
By Harry Brumpton2 Min Read
(Reuters) - Buyout firm Apollo Global Management LLC has agreed to acquire Direct ChassisLink Inc, the largest chassis rental and leasing company in the United States, for about $2.5 billion, including debt, according to people familiar with the matter.
The deal represents a bet by Apollo on Direct ChassisLink’s dominant position in the transfer of shipping containers between ports and hubs for transport by rail or truck.
The Charlotte, North Carolina-based Direct ChassisLink has doubled in size since investment firm EQT Partners AB acquired it in 2016, according to EQT’s website, despite reduced trade flows driven by a drop in imports to and exports from China.
Apollo and EQT plan to announce the deal later on Thursday, the sources said, asking not to be identified ahead of an official announcement. The deal includes Direct ChassisLink subsidiary Blume Global, a logistics and digital supply chain management company, one of the sources added.
Apollo declined to comment, while EQT did not immediately respond to a request for comment.
Direct ChassisLink owns or manages more than 226,000 marine and domestic chassis, and has 450 locations on or near key port facilities and intermodal hubs throughout the United States, according to its website.
In 2018, Direct ChassisLink acquired a fleet of approximately 73,000 domestic chassis from TRAC Intermodal.
Blume Global allows Direct ChassisLink customers to use a single information technology platform for reservations, tracking and billing of both chassis and containers.
Reporting by Harry Brumpton in New York; Editing by Himani SarkarOur Standards: The Thomson Reuters Trust Principles.
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5d01a4333c7cc967d63ae6e49979abb0 | https://www.reuters.com/article/us-dish-network-sling-tv/sling-tv-introduces-a-la-carte-channels-raises-base-package-price-idUSKBN1JO180 | Sling TV introduces 'a la carte' channels, raises base package price | Sling TV introduces 'a la carte' channels, raises base package price
By Sheila Dang2 Min Read
(Reuters) - Dish Network Corp’s Sling TV said on Thursday it would allow viewers to buy Showtime, sports events and other TV channels without a subscription to the No. 1 online streaming service, as it seeks new revenue sources to deal with growing competition.
Sling is adding more options for viewers as pay-TV competitors like AT&T Inc, which introduced a $15 streaming service last week, threaten to steal away customers looking for a lower-cost channel package.
The move would help to turn Sling into a place where viewers can access all their content, rather than switching between apps, Sling TV President Warren Schlichting said in an interview. Streaming platforms usually offer add-ons like premium TV channel HBO on top of an existing subscription in order to charge a higher price.
Sling, with 2.3 million subscribers in the first quarter, will immediately raise the price of its lowest-cost streaming subscription by 25 percent to $25 a month, Schlichting said, pointing to rising fees to televise sports.
AT&T’s DirecTV Now, Sling TV’s second-largest rival, had 1.5 million users in the first quarter.
Sling will sell eight standalone subscriptions, including to NBA League Pass and faith-based TV channels like Up Faith & Family, said Ankit Bishnoi, vice president of content acquisition and strategy at Sling TV, in an interview.
The standalone subscriptions, which Schlichting said would move Sling TV closer to “a la carte” viewing, will be rolled out first to former Sling subscribers to win them back.
Sling TV and programmers will share revenue for the standalone subscriptions, said Schlichting, who declined to provide specifics.
Reporting by Sheila Dang; Editing by Anna Driver and Richard ChangOur Standards: The Thomson Reuters Trust Principles.
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4062937958ba047d0669325268b2dfc0 | https://www.reuters.com/article/us-disney-compensation/disney-cuts-bonuses-for-top-executives-in-pandemic-fallout-idUSKBN29P01D | Disney cuts bonuses for top executives in pandemic fallout | Disney cuts bonuses for top executives in pandemic fallout
By Reuters Staff1 Min Read
FILE PHOTO: A screen shows the logo and a ticker symbol for The Walt Disney Company on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 14, 2017. REUTERS/Brendan McDermid
(Reuters) - Walt Disney Co said on Tuesday it had eliminated performance-based bonuses last year for top executives, including Executive Chairman Bob Iger, as the media company looks to soften the impact of the COVID-19 fallout.
The pandemic dealt a major blow to the company’s theme parks and movie studio business, while people sheltered at home during the lockdown pumped up sign-ups on its Disney+ streaming service.
Iger received a total compensation of $21 million for fiscal year 2020, significantly lower than the $47.5 million he had received in the prior year, Disney disclosed in a regulatory filing.
The compensation package of Chief Executive Officer Bob Chapek, who took on the role last February, totaled to $14.2 million.
Last year, Disney said Iger would forgo his salary while Chapek took a 50% pay cut amid the coronavirus crisis.
Reporting by Ayanti Bera in Bengaluru, Editing by Sherry Jacob-PhillipsOur Standards: The Thomson Reuters Trust Principles.
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e5b45407fa2322e553c412a0bbfa0352 | https://www.reuters.com/article/us-disney-interactive-idUSKBN0EN2NM20140612 | Disney sees Infinity video game hitting $1 billion in revenue | Disney sees Infinity video game hitting $1 billion in revenue
By Lisa Richwine, Malathi Nayak3 Min Read
LOS ANGELES (Reuters) - Walt Disney Co expects revenue from its 10-month-old Infinity video game to reach $1 billion even as rivals also combine physical toys with video games, Jimmy Pitaro, president of the company’s interactive unit, said in an interview.
The Walt Disney headquarters in Burbank, California December 18, 2013. REUTERS/Eric Thayer
Disney launched Infinity in August to help turn around its interactive gaming unit, which lost $1.4 billion from fiscal year 2008 to 2013. In an overhaul in March, the division laid off about one-quarter of the workforce, cut the number of games it develops and focused its advertising more on the fast-changing mobile market.
A month ago, Disney reported global revenue of $550 million for Infinity. Sales of the game helped the interactive unit post a $14 million profit for the quarter that ended in March, its third consecutive quarterly profit.
“We will be a billion-dollar franchise,” Pitaro said of Infinity in an interview on Wednesday at the E3 video game conference. He declined to provide a time frame.
A Disney spokeswoman said Pitaro’s projection was “just the beginning of what we expect it to do. This is a long-term game franchise with enormous revenue potential.”
Infinity lets users play with characters from Disney and Pixar films such as Anna and Elsa from “Frozen,” Captain Jack Sparrow from “Pirates of the Caribbean” and Lightning McQueen from “Cars.”
The company is launching the next version of the game, “Disney Infinity 2.0: Marvel Super Heroes” in the fall, bringing in Captain America, Iron Man, Spider-Man and others.
Infinity competes with Activision Blizzard Inc’s “Skylanders” franchise that first successfully introduced the concept of toys coming to life on screen when placed on an electronic base. Since its launch in October 2011 until the end of 2013, “Skylanders” has surpassed $2 billion in revenue.
This week at E3, Nintendo Co Ltd announced it would release “amiibo” toys of characters such as Mario with a chip that activates them in games when placed on the GamePad controller of its Wii U console.
Disney also plans more mobile “Star Wars” games before its scheduled December 2015 release of the seventh movie in the classic sci-fi series, Pitaro said. Disney also has a multi-year licensing deal with Electronic Arts Inc to develop a different line of “Star Wars” games.
Reporting by Lisa Richwine and Malathi Nayak; Edited by Ronald Grover and Richard ChangOur Standards: The Thomson Reuters Trust Principles.
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d343aa49c0ded4be824bde1586909f8d | https://www.reuters.com/article/us-dividend-global/global-dividend-payouts-forecast-to-revive-in-2021-idUSKBN2AM00D?edition-redirect=uk | Global dividend payouts forecast to revive in 2021 | Global dividend payouts forecast to revive in 2021
By Joice Alves3 Min Read
LONDON (Reuters) - Global dividend payments could rebound by as much as 5% this year, a new report estimated on Monday, after the coronavirus caused the biggest slump in payouts since the financial crisis more than a decade ago.
FILE PHOTO: Canary Wharf stands in London, Britain December 27, 2020. REUTERS/Simon Dawson/File Photo
Companies’ payouts to shareholders plunged more than 10% on an underlying basis in 2020 as one in five cut their dividends and one in eight cancelled them altogether.
A total of $220 billion worth of cuts were made between April and December, based on investment manager Janus Henderson’s Global Dividend Index. But there are signs companies are beginning to reinstate at least some of them.
Janus Henderson’s report warned that dividends could still fall 2% this year, in a worst-case scenario. But its best-case scenario sees 2021 dividends up 5% on a headline basis.
“It is quite likely we will see companies pay special dividends in 2021, utilising strong cash positions to make up some of the decline in distributions in 2020”.
Banking dividends will be likely to drive the rebound in payouts in 2021, the report said, after the European Central Bank and Bank of England eased blanket bans for lenders on dividends and buybacks. These were imposed during the first wave of the crisis to prepare for a potential increase in bad loans.
UK lenders Barclays and NatWest resumed payouts this month.
Last year, dividend bans meant banks cut or cancelled $70 billion of payments globally, according to the report.
(GRAPHIC: Global annual dividends and 2021 forecast - )
But the overall global dividend cuts proved less dramatic than expected. In August, Janus Henderson had expected the virus to drive corporates to cut $400 billion worth of dividends, nearly double the eventual outcome.
A resilient fourth quarter of 2020 helped, said Janus Henderson. The likes of German car maker Volkswagen and Russia’s largest lender Sberbank restored payments.
(GRAPHIC: Global dividends cuts by sector - )
Mining and oil companies cut dividends after a slump in commodity prices, while consumer discretionary companies also took a hit following lockdowns.
European dividends, not including Britain, fell by 28.4% on an underlying basis in 2020 to $171.6 billion. “This was the lowest total from Europe since at least 2009,” Janus Henderson said.
(GRAPHIC: Dividend cuts by region - )
In contrast, North American payouts rose 2.6% for the full year, setting a new record of $549 billion, the report said. Canada had the fewest dividend cuts anywhere in the world, the index showed.
(GRAPHIC: Biggest dividend payers - )
Additional reporting by Marc Jones. Editing by Jane MerrimanOur Standards: The Thomson Reuters Trust Principles.
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7241f5f27e8b243caeff6c0f98cb2f74 | https://www.reuters.com/article/us-dmgt-stake-euromoney-instnl/daily-mail-owners-plan-to-return-euromoney-stake-to-investors-approved-idUSKCN1R728L | Daily Mail owner's plan to return Euromoney stake to investors approved | Daily Mail owner's plan to return Euromoney stake to investors approved
By Reuters Staff2 Min Read
FILE PHOTO: A clock face is seen outside of the London offices of the Daily Mail newspaper in London, Britain, April 28, 2018. REUTERS/Toby Melville
(Reuters) - Britain’s Daily Mail newspaper owner said on Tuesday its investors had approved plans to return all of its shares in Euromoney Institutional Investor and 200 million pounds ($264.42 million) cash to eligible shareholders.
Daily Mail and General Trust (DMGT) holds more than 49 percent of Euromoney, a business-to-business information provider, and is its largest shareholder and founding investor.
DMGT said 95.02 votes cast at a meeting were in favor of the resolution, which will result in almost 900 million pounds of assets being returned to shareholders.
Separately, Euromoney said the distribution is expected to take place on April 2, on which day the existing relationship deed between DMGT and Euromoney will terminate and DMGT’s representative directors will step down from Euromoney’s board.
“Euromoney has benefited from DMGT’s considerable support as a shareholder for 50 years ... Euromoney is well placed to prosper further as a fully independent business. Our Board is now fully independent,” Euromoney Chairman Leslie Van de Walle said.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shinjini GanguliOur Standards: The Thomson Reuters Trust Principles.
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0c0c4df06776e8a8ae1cdb39bc448e94 | https://www.reuters.com/article/us-dna-workout-idUSKCN0XC06U | DNA analysis could help improve your workout: study | DNA analysis could help improve your workout: study
By Edward Baran5 Min Read
LONDON (Reuters) - A new study suggests that athletes using DNA-matched training improved their performance almost three times more than those on mismatched programs.
The study, published in Biology of Sport and conducted at the University of Central Lancashire, reviewed the performance of 28 young sportsmen and 39 young male soccer players over eight weeks.
Reigning British Olympic long jump champion Greg Rutherford has also used the genetically guided information from the training test used in the study, DNAFit, as he prepares to go for gold in Rio.
DNAFit screens gene variants linked to a body’s response to training and nutrition and presents users with a detailed report based on their swab test results, which come back from the lab within ten days.
The technology uses computer algorithms to decipher how to best train the body based on an individual’s genetics. A panel of gene variants gauges an athlete’s potential for development of power or endurance qualities, based on existing scientific literature.
The results are used to show the user whether he would respond better to high or low intensity resistance training and how sensitive he is to carbohydrates, alcohol, salt and saturated fats.
The company says it is already being used by several elite athletes and English Premier League football clubs.
Rutherford said recent doping scandals to have hit athletics mean it’s vital to use all the science available to help boost performance naturally.
“The sport is facing a lot of challenges at the moment with doping scandals and revelations coming out but ultimately my belief system is that everyone can be great and what you need to do is go in depth to find out how you train best, how you recover best and how you do everything to the best of your ability and DNA testing I think is the future of that,” he said.
Half the participants in the study were given training programs matched to their personal genetic analysis -- high intensity for those with a power bias, low intensity for those with an endurance bias.
The remaining subjects were mismatched -- those with more power were given low intensity training and those with more endurance, high intensity.
None of the subjects or trainers knew whether their program was matched or not.
After eight weeks, those whose training had been matched to their genetic analysis improved their counter movement jump test results by 7.4 per cent, compared to 2.6 per cent in the mismatched group.
Similarly, in a three-minute aerobic cycle test, those who trained to their genetic analysis saw a 6.2 per cent improvement, compared to 2.3 per cent for the others.
Since taking the DNAFit test in May, Rutherford has used his results to inform his training regime.
The company behind the test says it’s not yet possible to quantify how much using their test has improved Rutherford’s performance as compared to before, but it has made a real difference to his training.
“It isn’t particularly quantifiable, however what is quantifiable is that we now know that Greg is doing the best lifts he has done in the gym in terms of the work he’s doing, there’s an extra level of confidence which an athlete, in this case Greg will have, because he knows that certain genetic components are linked to things that he’s suspected in the past and therefore you get an additional level of confidence by doing genetic based training,” said CEO of DNAFit Avi Lasarow.
The company says it’s not just elite athletes who can benefit from DNA-matched training -- they say the average gym goer can also use it to help improve their performance and it’s now available to buy at a major UK chain of fitness centers.
“I think it just gives you that kind of edge in terms of your training progressing forward. As we know many people hit plateaus in training so just to give you that head start, kick start I have found it worked well with my clients and they have definitely added a bit more impetus into their training,” said personal trainer David Castro-Pearson, who has been using the tests on some of his clients in London for six months.
The DNAFit test is available to buy from £99 (140 USD).
Our Standards: The Thomson Reuters Trust Principles.
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54e7765a882be65c5075129e5c25da16 | https://www.reuters.com/article/us-dnb-visa/norwegian-fintech-vipps-in-payments-deal-with-visa-idUKKBN25U0WA?edition-redirect=uk | Norwegian fintech Vipps in payments deal with Visa | Norwegian fintech Vipps in payments deal with Visa
By Reuters Staff1 Min Read
OSLO (Reuters) - Norwegian fintech company Vipps, said on Thursday it had struck a deal with global payments giant Visa V.N to expand in Europe.
“The partnership between Visa and Vipps will give banks and card issuers access to a mobile wallet that is easy to use and which will contribute to an increased adoption of digital payments,” Vipps said in a statement.
Norwegian bank DNB DNB.OL is the largest Vipps shareholder.
Reporting by Terje Solsvik, editing by Gwladys FoucheOur Standards: The Thomson Reuters Trust Principles.
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2ddc1c0d845f218bda8e818b17131b74 | https://www.reuters.com/article/us-dolce-gabbana-china/chinese-e-commerce-sites-ditch-dolce-gabbana-in-ad-backlash-idUSKCN1NR1AU | Chinese online shopping sites ditch Dolce & Gabbana in ad backlash | Chinese online shopping sites ditch Dolce & Gabbana in ad backlash
By Pei Li, Cate Cadell4 Min Read
BEIJING (Reuters) - Chinese e-commerce sites have removed Dolce & Gabbana products amid a spiralling backlash against an advertising campaign that was decried as racist by celebrities and on social media.
The ads - released earlier this week to drum up interest in a Shanghai fashion show the Italian brand later canceled - featured a Chinese woman struggling to eat spaghetti and pizza with chopsticks, sparking criticism from consumers.
The blunder was compounded when screenshots were circulated online of a private Instagram conversation, in which the brand’s designer Stefano Gabbana makes a reference to “China Ignorant Dirty Smelling Mafia” and uses the smiling poo emoji to describe the country. The brand said Gabbana’s account had been hacked.
Amid calls for a boycott, the furore threatened to grow into a big setback for one of Italy’s best-known fashion brands in a crucial market, where rivals from Louis Vuitton of LVMH to Kering’s Gucci are vying to expand.
Chinese customers account for more than a third of spending on luxury products worldwide, and are increasingly shopping for these in their home market rather than on overseas trips.
China’s Kaola, an e-commerce platform belonging to China’s NetEase Inc confirmed it had removed Dolce & Gabbana products while luxury goods retailer Secoo said it removed the brand’s listings on Wednesday evening.
On Yoox Net-A-Porter - owned by Cartier parent Richemont and a leading online high-end retailer - the label’s wares were no longer available on its platforms within China. The company declined to comment.
Checks done by Reuters on Thursday morning also showed pages that previously linked to Dolce & Gabbana items on the e-commerce sites hosted by Alibaba Group Holding Ltd and JD.com Inc were no longer available and searches for the brand returned no products.
Alibaba and JD.com did not respond to requests for comment, and Dolce & Gabbana did not comment on the retailers’ moves.
FILE PHOTO: People walk past a Dolce & Gabbana store at a shopping complex in Shanghai, China November 22, 2018. REUTERS/Aly Song/File Photo
RESPECT
After its China missteps quickly went viral on China’s Twitter-like Weibo platform, it apologised in a statement on the site.
Celebrities including “Memoirs of a Geisha” movie star Zhang Ziyi criticized the brand, while singer Wang Junkai said he had terminated an agreement to be the brand’s ambassador.
An airport duty fee shop in the southern Chinese city of Haikou said on Weibo it had removed all Dolce & Gabbana products from its shelves.
The Communist Party Youth League, the youth wing of the ruling Chinese Communist Party, said on Weibo “we welcome foreign companies to invest and develop in China ... companies working in the country should respect China and Chinese people”.
The gaffe is not the first by Dolce & Gabbana in China, even as it pushes to increase its appeal there. It came under fire on social media last year for another series of ads showing the grungy side of Chinese life.
The unlisted firm does not publish earnings or disclose how much revenue it derives from China.
Other uproars have come and gone in China without appearing to cause lasting damage, including at brands like Kering’s Balenciaga, which apologised in April amid a backlash over how some Chinese customers had been treated in Paris.
But there was an increased chance such controversies could affect sales as buyers became more discerning about brands, some analysts said.
“It’s a different market now – Chinese customers are more savvy, and there’s so much more choice,” said Sindy Liu, a London-based luxury marketing consultant.
“A lot of western brands don’t really understand China that well when it comes to cultural sensitivities. But most brands are quite careful, they don’t do things that are humorous.”
Controversial comments by designers can be devastating for luxury brands. In one of the worst fallouts from in the fashion world, Christian Dior, now fully part of LVMH, fired designer John Galliano in 2011 after a video of him surfaced hurling anti-Semitic abuse at people in a bar in Paris.
Reporting by Pei Li and Cate Cadell in Beijing; Additional reporting by Sarah White in Paris and Claudia Cristoferi in Milan, Editing by Himani SarkarOur Standards: The Thomson Reuters Trust Principles.
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1c64c1c8279141a2acbb12a97d95df31 | https://www.reuters.com/article/us-dole-bananas-idUSTRE66F0CL20100716?type=domesticNews | LA judge dumps $2.4 million judgment against Dole | LA judge dumps $2.4 million judgment against Dole
By Steve Gorman4 Min Read
LOS ANGELES (Reuters) - A California judge on Thursday tossed out a $2.4 million judgment against Dole Food Co won by six Nicaraguans claiming pesticide injuries in what the judge branded a phony case invented as part of a larger fraud conspiracy.
The November 2007 verdict she overturned in a rare proceeding after several days of testimony and oral arguments capped the first of dozens of such cases brought in California by workers from several Central American countries to go to trial.
The others, from Costa Rica, Guatemala, Panama and Honduras, have been thrown into greater doubt as well.
Thursday’s decision, by the same judge who dismissed two related lawsuits in Los Angeles for the same reasons in April 2009, also undermines $2 billion in pending judgments from dozens of similar cases won by plaintiffs in Nicaraguan courts and now seeking enforcement against Dole in the United States, lawyers for both sides said.
A federal judge in Miami already has refused to enforce one such judgment for $97 million.
“It has effectively destroyed any Nicaraguan’s ability to seek compensation in (U.S.) court,” said Steve Condie, a lawyer for the six Nicaraguan plaintiffs who sued in California. He denied that his clients were part of a conspiracy and vowed to appeal the ruling.
CHEMICAL BANNED IN U.S.
His clients, like plaintiffs who sued and won in Nicaragua, claimed they were made sterile by the chemical DBCP, which was banned in the United States but used by Dole in other countries to control fungus growth on banana plantations.
Dole, one of the world’s leading producers of fruits and vegetables, asserted that attorneys in Nicaragua recruited thousands of men to pose as banana workers, or “bananeros,” in a wave of lawsuits that hit U.S. companies, including Dole and Dow Chemical Co, in recent years.
Dole’s lawyers said the conspiracy grew out of a special Nicaraguan law passed in 2001 to address pesticide exposure cases.
Plaintiffs’ lawyers have countered by accusing Dole of paying witnesses to testify on behalf of the company to help manufacture claims of judicial fraud.
In the end, Los Angeles County Superior Court Judge Victoria Chaney sided with Dole, echoing her 2009 finding that the plaintiffs were part of a “pervasive conspiracy” to defraud American companies and the court system.
Dole attorney Scott Edelman said the dismissal of the three cases filed on behalf of Nicaraguan plaintiffs casts a cloud over similar lawsuits from other countries still pending in California.
“I think everybody’s going to be looking carefully in the future at all these types of cases ... to make sure that the claims are legitimate,” Edelman said. “This case is one of the most pervasive, reprehensible frauds on the courts that any of us has ever seen, and will be recognized as a textbook example of fraudulent litigation for years to come.”
He said it was rare for a judge to set aside a jury award in a civil case after the fact and “requires very compelling circumstances.”
Last month, Chaney, an appellate judge assigned to hear the Nicaraguan Dole cases at the Superior Court level, suggested in a hearing that lawyers in Nicaragua were fomenting hostility and veiled threats toward her and Dole’s witnesses in radio broadcasts and news conferences. She did not elaborate.
Editing by Mohammad ZarghamOur Standards: The Thomson Reuters Trust Principles.
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d9da204116723379796891b0787d7b93 | https://www.reuters.com/article/us-dollar-general-ceo-exclusive/exclusive-discount-retailer-dollar-general-takes-steps-to-find-possible-ceo-successor-sources-idUSKBN2AM2IH | Exclusive: Discount retailer Dollar General takes steps to find possible CEO successor - sources | Exclusive: Discount retailer Dollar General takes steps to find possible CEO successor - sources
By Jessica DiNapoli3 Min Read
(Reuters) - Discount chain Dollar General Corp, one of the few U.S. retailers thriving during the COVID-19 pandemic, is taking steps to find a potential successor to Chief Executive Todd Vasos, people familiar with the matter said on Monday.
FILE PHOTO: A sign is seen outside a Dollar General store in Chicago, Illinois, U.S. May 23, 2016. REUTERS/Jim Young
While no decision has been made about Vasos stepping down, Dollar General has started conversations with headhunting firms and is considering candidates, the sources said.
Dollar General has been looking within its ranks and will assess the performance of its top executives against those at rival companies, the sources said. Dollar General Chief Operating Officer Jeff Owen is under consideration, one of the sources added.
The sources requested anonymity because the matter is confidential.
A Dollar General spokesman said Vasos had not communicated any plans to the company regarding a potential departure after his contract ends in June, noting it was “merely good governance” to plan for a transition. Vasos’ contract renews automatically on an annual basis in June unless terminated or renegotiated.
“We have been speaking with management consulting firms related to executive development programs and as part of our succession planning process. We have not entered into a contract with any such firm to date,” the spokesman said.
Vasos has expanded Dollar General’s offerings to include more fresh produce and is wooing higher-income shoppers with new products in categories such as home decor, in a bid to stave off competition from large rivals such as Walmart Inc and Amazon.com Inc.
Dollar General has also invested heavily in private label brands, developing lines for items ranging from cat food to shampoo. It has added more distribution centers to supply its stores with dairy products, deli meats and frozen entrees. It has more than 16,000 stores, often in areas underserved by other retailers.
Dollar General shares have risen 170% since Vasos became CEO in 2015, compared to a 115% rise in the S&P 500 General Merchandise Stores index over the same period.
The COVID-19 outbreak has boosted Dollar General’s sales, as shoppers stay home more and buy more household necessities. Dollar General operates in small communities with few retailers.
The Goodlettsville, Tennessee-based company has taken steps to protect its more than 157,000 workers during the pandemic, and announced last month that it would pay its hourly and salaried workers for receiving COVID-19 vaccines.
It also said it would award $50 million in appreciation bonuses to its frontline workers in its fourth quarter, for a total of up to about $173 million for fiscal 2020.
Reporting by Jessica DiNapoli in New York; Additional reporting by Aishwarya Venugopal in Bangalore and Melissa Fares in New York; Editing by Richard ChangOur Standards: The Thomson Reuters Trust Principles.
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7dfa947a3c51e9698a50c5c0a048189e | https://www.reuters.com/article/us-dollar-general-results/dollar-stores-thrive-in-pandemic-but-hold-back-forecasts-idUSKBN28D1VF | Dollar stores thrive in pandemic, but hold back forecasts | Dollar stores thrive in pandemic, but hold back forecasts
By Reuters Staff2 Min Read
FILE PHOTO: A sign is seen outside a Dollar General store in Chicago, Illinois, U.S. May 23, 2016. REUTERS/Jim Young/File Photo
(Reuters) - Dollar General Corp reported better-than-expected quarterly results on Thursday, as the discount retailer benefited from higher demand for cheaper groceries and household items during the coronavirus-induced economic downturn.
High unemployment and falling household income this year due to the COVID-19 crisis have boosted demand for lower-priced cereals, vegetables and other essentials, lifting sales at dollar stores.
The strong demand also carried through to the current quarter, with Dollar General reporting same-store sales growth of about 14% for the period between Oct. 31 and Dec.1.
Still, the company did not provide a forecast for the rest of the year, like its peer Dollar Tree, citing the uncertainty caused by the pandemic.
Shares of Dollar General, which typically sells products for $10 or less, were down nearly 3% in premarket trading after having risen about 40% so far this year.
Dollar General has stores concentrated in rural locations, which makes them a one-stop place for customers - who have few other options nearby - to buy everything from home decor, party supplies to everyday essentials.
For the third quarter ended Oct. 30, Dollar General posted sales and same-store sales that beat analysts’ expectations as people bought more on average despite cutting down on the number of trips.
Net income rose to $574.26 million, or $2.31 per share, from $365.55 million, or $1.42 per share, a year earlier.
Analysts on average were expecting a profit of $2.00 per share, Refinitiv IBES data showed.
Reporting by Mehr Bedi in Bengaluru; Editing by Arun Koyyur, Aditya SoniOur Standards: The Thomson Reuters Trust Principles.
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800263911378595326acd02fc585fe35 | https://www.reuters.com/article/us-dollar-reserves-un-idUSTRE65S40620100629?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Reader | Scrap dollar as sole reserve currency: U.N. report | Scrap dollar as sole reserve currency: U.N. report
By Louis Charbonneau3 Min Read
UNITED NATIONS (Reuters) - A new United Nations report released on Tuesday calls for abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.
But several European officials attending a high-level meeting of the U.N. Economic and Social Council countered by saying that the market, not politicians, would determine what currencies countries would keep on hand for reserves.
“The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency,” the U.N. World Economic and Social Survey 2010 said.
The report says that developing countries have been hit by the U.S. dollar’s loss of value in recent years.
“Motivated in part by needs for self-insurance against volatility in commodity markets and capital flows, many developing countries accumulated vast amounts of such (U.S. dollar) reserves during the 2000s,” it said.
The report supports replacing the dollar with the International Monetary Fund’s special drawing rights (SDRs), an international reserve asset that is used as a unit of payment on IMF loans and is made up of a basket of currencies.
“A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency,” the U.N. report said.
The report said a new reserve system “must not be based on a single currency or even multiple national currencies but instead, should permit the emission of international liquidity -- such as SDRs -- to create a more stable global financial system.”
“Such emissions of international liquidity could also underpin the financing of investment in long-term sustainable development,” it said.
MARKETS DECIDE
Jomo Kwame Sundaram, a Malaysian economist and the U.N. assistant secretary general for economic development, told a news conference that “there’s going to be resistance” to the idea.
“In the whole post-war period, we’ve essentially had a dollar-based system,” he said, adding that the gradual emission of SDRs could help countries phase out the dollar.
Nobel Prize-winning economist Joseph Stiglitz, who previously chaired a U.N. expert commission that considered ways of overhauling the global financial system, has advocated the creation of a new reserve currency system, possibly based on SDRs.
Russia and China have also supported the idea.
But Paavo Vayrynen, Finland’s Foreign Trade and Development Minister, told reporters that he doubted it was possible “to make any political or administrative decisions how to formulate the currency system in the world.”
“It is based on the markets,” he said. “I believe that the economic players in the market are going to have the decisive influence on that issue.”
European Union development commissioner Andris Piebalgs said it would be a bad idea to dictate what the reserve currency should be.
“It is markets that decide,” he said. “Any intervention would just create additional challenges and make things even less predictable.”
Our Standards: The Thomson Reuters Trust Principles.
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937aa6caabbb8eb71dac73b40fd32b00 | https://www.reuters.com/article/us-dominican-abortion-idUSKBN0TN0YK20151204 | Dominican Republic's top court reinstates total abortion ban | Dominican Republic's top court reinstates total abortion ban
By Anastasia Moloney, Thomson Reuters Foundation3 Min Read
BOGOTA (Thomson Reuters Foundation) - A decision by the Dominican Republic’s constitutional court to reinstate a total ban on abortion is putting women’s lives at risk, rights groups said.
Reforms last year to amend the country’s criminal code to allow abortion in cases of rape, incest, a deformed fetus or when a woman’s life is in danger, were passed by congress and approved by President Danilo Medina.
The reforms, a result of years of debate over the abortion ban in the predominantly Catholic and socially conservative Caribbean country, were set to take effect on Dec. 27.
But after an appeal by religious and conservative groups who said the country’s laws and constitution must protect the rights of an unborn child at all costs, the court on Wednesday ruled changes to the criminal code dating back to 1884 were unconstitutional.
“This decision takes women’s and girls’ human rights back to the 19th century,” Erika Guevara, Americas director at Amnesty International, said in a statement on Thursday.
“Its impact will be catastrophic for women and girls in the Dominican Republic who will continue to be criminalized, stigmatized and forced to seek out unsafe abortions because they are denied access to safe and legal medical treatment.”
Bishops from the country’s influential Roman Catholic Church have publicly criticized moves to overturn the abortion ban.
Rights groups say blanket bans on abortion are a leading cause of maternal mortality because they force women to undergo dangerous backstreet abortions.
Sergia Galvan, spokeswoman for local rights group, the Women and Health Collective, said the court’s decision “continues to place Dominican women, even those who long to be mothers, in a dilemma - to die or go to jail - when they require health services, such as abortion”.
The Dominican Republic’s absolute ban on abortion has led to more than 90,000 unsafe abortions occurring in the country each year, according to the U.S.-based Center for Reproductive Rights.
Other countries in Latin America and the Caribbean that completely ban abortion with no explicit exceptions include Chile, El Salvador, Suriname, Honduras and Nicaragua, according to the Center for Reproductive Rights.
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a74f8148c21a7ae1e7b215912c740da2 | https://www.reuters.com/article/us-dominion-atlantic-coast-natural-gas/atlantic-coast-natgas-pipe-cancellation-poses-supply-challenges-dominion-idUSKBN2472YB | Atlantic Coast natgas pipe cancellation poses supply challenges: Dominion | Atlantic Coast natgas pipe cancellation poses supply challenges: Dominion
By Reuters Staff2 Min Read
(Reuters) - Dominion Energy Inc said cancellation of the $8 billion Atlantic Coast natural gas pipeline in the United States would present challenges in meeting growing demand but that increased supply of clean energy should fill some of the gap.
Dominion was building the pipeline to meet growing gas demand in southeast Virginia and eastern North Carolina. The project was the latest of several in the United States abandoned after long delays in the approval process and as the fall in demand caused by coronavirus makes the case for more capacity less pressing.
Dominion and its partner in the project, Duke Energy Corp, said on Sunday they abandoned the 600-mile (966-km) project, which was billions of dollars over budget and years behind schedule.
“These communities still need new infrastructure for electric and gas reliability and economic development,” Dominion spokesman Aaron Ruby said. “The cancellation ... will leave some significant challenges unaddressed.”
The pipeline would have supplied enough gas for about 7.5 million U.S. homes a day.
Analysts at Wood Mackenzie said the real losers from the cancellation would be power consumers in the U.S. Southeast, including units of Duke, Dominion and Southern Co that will need to find other gas supplies to fuel the region’s coal-to-gas switching efforts.
Before state governments imposed coronavirus lockdowns, the U.S. Energy Information Administration (EIA) forecast gas demand would reach record highs almost every year through 2050.
EIA now projects U.S. demand will drop about 4% in 2020 and another 4% in 2021 from a record high in 2019.
Dominion plans to invest up to $55 billion over the next 15 years on zero-carbon generation, energy storage, gas distribution replacement and renewable natural gas.
Dominion aims to achieve net-zero carbon dioxide and methane emissions from its power generation and gas infrastructure operations by 2050.
Reporting by Scott DiSavino; Editing by Simon Webb and Peter CooneyOur Standards: The Thomson Reuters Trust Principles.
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4f4cbfe4e1a48f443ad66bc9e0643384 | https://www.reuters.com/article/us-dominion-cove-point-lng/dominion-to-keep-exporting-lng-from-maryland-cove-point-during-june-maintenance-idUSKBN22W34D | Dominion to keep exporting LNG from Maryland Cove Point during June maintenance | Dominion to keep exporting LNG from Maryland Cove Point during June maintenance
By Reuters Staff2 Min Read
(Reuters) - Dominion Energy Inc said it plans to conduct maintenance at its Cove Point liquefied natural gas (LNG) export plant in Maryland in June but does not expect that work to affect the export side of the facility.
Dominion notified customers in a posting on its website that it would work on the plant’s “small liquefier” from June 2-15. The company said that work is unrelated to the LNG export service.
The amount of pipeline gas flowing to Cove Point has held around 0.76 billion cubic feet per day - near the plant’s capacity - since the facility exited its last maintenance outage in the middle of October, according to data provider Refinitiv.
Even though the plant is not expected to stop LNG exports in June as some traders and brokers said earlier in the week, analysts noted this is a good time for any LNG export plant anywhere in the world to shut.
The global LNG market is oversupplied due to several factors including a sharp drop in demand from coronavirus lockdowns that have caused gas prices in Europe and Asia to plunge to record lows in recent weeks.
In April, LNG buyers canceled about 20 U.S. cargoes due to be shipped in June.
Analysts said they expect even more cancellations in coming months especially now that U.S. gas at the Henry Hub in Louisiana are more expensive for June, July and August than the European Title Transfer Authority (TTF) benchmark in the Netherlands.
So far, analysts said those cancellations were at U.S. LNG plants located on the Gulf of Mexico where most gas is priced at the Henry Hub.
Gas for Cove Point, however, mostly comes from the Marcellus and Utica shale in Pennsylvania, West Virginia and Ohio, which is currently about 20% cheaper than the Henry Hub.
Reporting by Scott DiSavino; Editing by David GregorioOur Standards: The Thomson Reuters Trust Principles.
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a9273cd84f64c8f870f477b66424e9d2 | https://www.reuters.com/article/us-dominion-us-millstone-nuclear/dominion-to-keep-connecticut-millstone-nuclear-plant-in-service-idUSKCN1QW2TT | Dominion to keep Connecticut Millstone nuclear plant in service | Dominion to keep Connecticut Millstone nuclear plant in service
By Scott DiSavino3 Min Read
(Reuters) - Dominion Energy Inc said on Friday that it reached a 10-year agreement with Connecticut utilities that will keep the state’s only nuclear power station in service.
Dominion had until Friday to tell the regional power grid operator, ISO New England, if it would retire the two reactors at the 2,088-megawatt Millstone station. One megawatt can power about 1,000 U.S. homes.
Millstone produces about half of the electricity in Connecticut and around 98 percent of its carbon-free energy, making the plant key to meeting the state’s aggressive carbon reduction goals.
“This is a huge win for Connecticut, the region, and our colleagues at Millstone,” Paul Koonce, president and chief executive of Dominion’s Power Generation Group, said in a statement.
“Not only does this preserve the vast majority of Connecticut’s carbon-free electricity, it preserves good jobs for the 1,500 women and men who work at Millstone and keeps 4,000 other residents employed,” Koonce said.
Dominion, of Richmond, Virginia, has been saying for years that Millstone’s reactors, which began operating in 1975 and 1986, are not economically viable in the current low power price environment.
Power prices in New England over the past five years have been the lowest ever, according to Reuters data going back to 2000, due to increasing use of generators fired with cheap natural gas from shale formations and renewables like wind and solar.
That makes it tough for facilities using other sources of energy like coal and nuclear to compete.
After three years of working with politicians and regulators on a plan to keep the plant in service, the state in December selected Millstone for a contract to purchase a little over half of its output for 10 years.
The price of that contract, however, was not firm, so Dominion said it was negotiating with the state and two local utilities, which are units of Eversource Energy and Avangrid Inc.
Dominion said this agreement marks another milestone in its multi-year progression towards a more regulated and long-term contracted earnings profile and the resulting reduction in business risk.
The contract represents a “modest financial uplift,” which results in expected operating earnings per share levels that are within its existing guidance for 2019 and beyond, the company said.
Reporting by Scott DiSavino; Editing by Marguerita ChoyOur Standards: The Thomson Reuters Trust Principles.
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f826543ba99a515de83535d6c8200142 | https://www.reuters.com/article/us-dominion-us-pipeline-natgas/dominion-delays-u-s-atlantic-coast-natgas-pipe-boosts-costs-idUSKCN1PQ55W | Dominion delays U.S. Atlantic Coast natgas pipe, boosts costs | Dominion delays U.S. Atlantic Coast natgas pipe, boosts costs
By Reuters Staff3 Min Read
(Reuters) - Dominion Energy Inc said on Friday the estimated cost of its Atlantic Coast natural gas pipeline from West Virginia to North Carolina has risen to $7.0 billion-$7.5 billion, adding that it has delayed the expected completion date to early 2021.
The company said previously the project would cost an estimated $6.5 billion-$7.0 billion, excluding financing, and be completed in mid 2020 due to delays caused by numerous environmental lawsuits.
“We remain highly confident in the successful and timely resolution of all outstanding permit issues as well as the ultimate completion of the entire project,” Dominion Chief Executive Thomas Farrell said in the company’s fourth-quarter earnings release.
He noted the company was “actively pursuing multiple paths to resolve all outstanding permit issues including judicial, legislative and administrative avenues.”
Earlier this week, the U.S. Fourth Circuit Court of Appeals stayed a previous court decision against U.S. Forest Service permits that allowed Dominion to build the Atlantic Coast pipeline across national forests and the Appalachian Trail.
Dominion said it expects construction could recommence on the full 600-mile (966-kilometer) pipeline route during the third quarter of 2019, with partial in-service in late 2020.
When the company started work on Atlantic Coast in the spring of 2018, Dominion said it expected the project would cost an estimated $6.0 billion-$6.5 billion and be completed in late 2019.
That was before the company suspended construction in early December after the Fourth Circuit Court stayed a permit from the U.S. Fish and Wildlife Service that authorized the pipe to be built in areas inhabited by threatened or endangered species.
Atlantic Coast is designed to carry 1.5 billion cubic feet per day (bcfd) from the Marcellus and Utica shale in Pennsylvania, Ohio and West Virginia to the U.S. Southeast.
One billion cubic feet is enough gas to supply about 5 million U.S. homes.
Atlantic Coast is not the only big pipeline fighting environmental groups in court over permits.
EQM Midstream Partners LP is facing similar challenges in its quest to build the Mountain Valley gas pipe from West Virginia to Virginia, which is now at least $1 billion over budget and a year behind schedule.
Separately, Dominion said it expects the 38-mile Supply Header project in West Virginia and Pennsylvania, which will feed gas into Atlantic Coast, will enter service in late 2020 at a cost of $650 million-$700 million.
Previously, the company said Supply Header would cost around $500 million and enter service in late 2019.
Reporting by Scott DiSavino; Editing by Dan GreblerOur Standards: The Thomson Reuters Trust Principles.
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345ce601c965b4db237329d5ae2c3da9 | https://www.reuters.com/article/us-donnasummer-reactions/reactions-to-the-death-of-donna-summer-idUSBRE84G1EJ20120518 | Reactions to the death of Donna Summer | Reactions to the death of Donna Summer
By Reuters Staff5 Min Read
LOS ANGELES (Reuters) - Donna Summer, whose music dominated the 1970s disco era, died of cancer on Thursday at age 63, leaving a legacy of hit singles like “Love to Love You Baby,” “Last Dance” and “Bad Girls.”
Flowers are seen on the star of music recording artist Donna Summer on the Walk of Fame in Hollywood, California May 17, 2012. REUTERS/Mario Anzuoni
Following are some reactions from celebrities and music industry professionals.
- “Michelle and I were saddened to hear about the passing of Donna Summer. A five-time Grammy Award winner, Donna truly was the ‘Queen of Disco.’ Her voice was unforgettable, and the music industry has lost a legend far too soon. Our thoughts and prayers go out to Donna’s family and her dedicated fans.” - President Barack Obama, in a statement.
- “I am deeply saddened personally for the loss of my dear friend Donna Summer. She and I have been friends for a very long time, we were both known as the ‘Queen of Disco,’ but Donna always referred to me as the “First Lady of Disco.’ A fine lady and human being she was. She will be missed dearly by her colleagues, friends and family. She not only made her mark in my heart as well as others, but she forever changed the way ... America danced and enjoyed themselves. She may have had her ‘Last Dance’ here on earth, but ‘Heaven Knows’ it is “dancing with joy for her arrival.” - Gloria Gaynor in a statement.
- “She was so young and vibrant. Donna and I knew each other for a long time, we ran in the same circles and are part of the same generation, and it was something we shared ... creating and performing music. Her voice was smooth and comforting, and something I had always wanted to do was a world tour with her, you know, as the Queen and King of Disco. We are the freshman class in creating music that continues to this day to make people happy, and it has been embraced by every major artist in the industry. It makes you want to get up and dance and forget your troubles for awhile. We just saw each other several months ago - she was beautiful as ever and her voice as strong as when I met her and we had some great laughs and a stroll down memory lane.” - Harry Wayne “KC” Casey of KC & The Sunshine Band in a statement.
- “When you lose a friend you feel like they are gone forever ... that is not true with my dear friend Donna. She was a queen, THE Queen of disco, and we will be dancing to her music forever. My thoughts and prayers are with her family always.” Liza Minnelli in a statement.
- “I can’t believe we’ve lost another wonderful singer. Donna, like Whitney (Houston), had one of the greatest voices ever. I loved her records. She was the disco queen, and will remain so. I knew her and found her to be one of the most likable and fun people ever. She will be missed and remembered.” - Dolly Parton in a statement.
- “Five-time Grammy winner Donna Summer had a dynamic voice and unique musical style that helped define the dance music genre in the ‘70s. She also was an artist who crossed many musical genres, as evidenced by her Grammy wins in the R&B, rock, inspirational and dance categories. Her talent was a true gift to the music industry, and our thoughts and sympathies are with her family, friends and fans throughout the world during this difficult time.” - Neil Portnow, president of The Recording Academy on Facebook.
- “We will miss Donna Summer! She changed the world of music with her beautiful voice and incredible talent.” - Janet Jackson on Twitter.
- “I loved doing the duet with her. She had an amazing voice and was so talented. .. It’s so sad.” - Barbra Streisand on Twitter.
- “Rest in Peace dear Donna Summer. Your voice was the heartbeat and soundtrack of a decade.” - Quincy Jones on Twitter.
- “Rest in peace Donna. You are a pioneer and you have paved the way for so many of us. You transcended race and genre. Respect. Lenny.” - Lenny Kravitz on Twitter.
- “I’m so sad about the news that Donna Summer died this morning. I was a big fan. I even used one of her songs in my show that airs today.” - Ellen DeGeneres on Twitter.
- “One of my earliest musical inspirations, RIP Donna Summer.” Kylie Minogue on Twitter.
Reporting By Piya Sinha-Roy; Editing by Bob Tourtellotte and Cynthia OstermanOur Standards: The Thomson Reuters Trust Principles.
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0e72413ebe48c18c74f60c73073920a9 | https://www.reuters.com/article/us-doordash-cfo/meal-delivery-service-doordash-hires-uber-finance-head-as-cfo-idUSKBN1K92P1?feedType=RSS&feedName=technologyNews | Meal delivery service DoorDash hires Uber finance head as CFO | Meal delivery service DoorDash hires Uber finance head as CFO
By Heather Somerville3 Min Read
SAN FRANCISCO (Reuters) - Meal delivery service DoorDash Inc has hired Uber Technologies Inc’s head of finance to be its chief financial officer, positioning the startup closer to an initial public offering and dealing another executive loss to Uber.
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Before Uber, Prabir Adarkar, the new DoorDash CFO, worked on deals at Goldman Sachs GS.N, a bank that frequently leads IPOs for Silicon Valley technology companies.
Tony Xu, co-founder and chief executive officer of DoorDash, said on Thursday that he selected Adarkar for his “sharp mind” and leadership skills. Founded in 2013, DoorDash provides, via a smartphone app, food delivery from restaurants in cities across the United States and Canada.
Adarkar had been head of strategic finance for Uber since 2015, and as the most senior finance executive he led a team of more than 500 employees. His departure leaves yet another vacancy for the ride-services company, which has been without a chief financial officer for three years.
In a statement, Uber CEO Dara Khosrowshahi praised Adarkar for “improving financial controls to putting the company on a path to profitability.”
At a technology conference in Aspen, Colorado, this week, Khosrowshahi also lamented that his company’s CFO search “is taking longer than I’d like.”
“We have terrific candidates,” Khosrowshahi said at the conference, adding that he’s looking for a CFO who will stay beyond Uber’s initial public offering, planned for next year.
Uber and DoorDash share an investor in Japan's SoftBank Group Corp 9984.T, which has through its $100 billion Vision Fund made large investments in both companies. SoftBank in March led a $535 million investment in DoorDash, bolstering the firm’s valuation from about $700 million to $1.4 billion and giving it the cash needed for an international expansion.
DoorDash said this year it is tripling its geographic footprint to 1,600 cities and hiring 250 people.
And SoftBank in January became Uber’s largest shareholder after taking a 15 percent stake in the company through a large tender of stock from employees and exiting investors, and making a new investment of $1.25 billion.
DoorDash and Uber are also competitors. Uber is pouring more resources into growing UberEats, its meal-delivery operation.
Reporting by Heather Somerville; Editing by Jeffrey Benkoe and Phil BerlowitzOur Standards: The Thomson Reuters Trust Principles.
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6cae551a1b207e649d68194d649fd0d5 | https://www.reuters.com/article/us-doping-athletics-coleman/sprint-star-coleman-to-miss-olympics-after-being-banned-for-whereabouts-failure-idUSKBN27C2O2 | World champion Coleman to miss Olympics after ban for whereabouts failure | World champion Coleman to miss Olympics after ban for whereabouts failure
By Reuters Staff4 Min Read
(Reuters) - World 100 metres champion Christian Coleman will miss next year’s Tokyo Olympics after being banned for two years for breaching whereabouts rules, the Athletics Integrity Unit (AIU) said on Tuesday.
Coleman, who narrowly escaped a ban last year for missing three doping tests, was provisionally suspended by the AIU in June.
"We regret to say that we do not think there is any mitigation which can fairly be relied upon to reduce the sanction from the two-year period," the AIU said in a statement on its website here.
“Unfortunately, we see this case as involving behaviour by the athlete as very careless at best and reckless at worst.”
Coleman’s representative Emanuel Hudson said in a statement that sprinter would appeal the ruling to the Court of Arbitration for Sport.
“The decision of the Disciplinary Tribunal established under the World Athletics Rules is unfortunate and will be immediately appealed to the Court of Arbitration for Sport,” said Hudson. “Mr. Coleman has nothing further to say until such time as the matter can be heard in the court of jurisdiction.”
The American sprinter claimed at the time of his provisional suspension that anti-doping officials had not followed procedure when he missed them after going Christmas shopping on Dec. 9, 2019 at a time when he had said he would be at home.
FILE PHOTO: Athletics - World Athletics Championships - Doha 2019 - Men's 4x100 Metres Relay Final - Khalifa International Stadium, Doha, Qatar - October 5, 2019. Christian Coleman of the U.S. before the race. REUTERS/Hannah Mckay
Doping control officers testified before a disciplinary tribunal that they were present during the whole of the allotted hour of 7:15 pm to 8:15 pm on Dec. 9 in front of his house.
Coleman in turn testified he had arrived home from Christmas shopping shortly before the end of the one-hour period.
However, shopping receipts showed that Coleman had purchased 16 items from a Walmart Supercenter at 8:22 pm, the AIU said.
“We do not accept the Athlete’s evidence,” the AIU added. “It is obvious that in fact the athlete did not go home until after making his 8:22 pm purchase. We are comfortably satisfied that this is what happened.”
At the time of his provisional suspension, Coleman had complained that the AIU’s doping control officers had not called him on that night on Dec. 9.
The AIU said in its judgement that doping control officers were not required to phone athletes.
The AIU said Coleman’s ban would end on May 13, 2022 and that he could appeal the tribunal’s decision to the Court of Arbitration for Sport.
Three failures to properly file whereabouts information or being absent during the hour stated in a 12-month period can result in a one- or two-year suspension.
Coleman, also a silver medallist in the 100m and 4x100m relay at the 2017 worlds, escaped suspension last year when the U.S. Anti-Doping Agency (USADA), after receiving guidance from the World Anti-Doping Agency (WADA) on how to calculate the 12-month window for three missed tests, withdrew the charge.
The sprinter, who also helped the United States to 4x100m gold at the 2019 worlds in Doha, later demanded an apology from USADA, but two of those misses have now combined with the latest failure to result in a ban.
“The fact is that he had had the narrowest possible escape from a potential ban on this prior occasion,” the AIU said. “It might be thought he would have learned from this experience... in fact, that is not at all what happened.”
Reporting by Simon Jennings in Bengaluru, Steve Keating in Toronto; editing by Pritha SarkarOur Standards: The Thomson Reuters Trust Principles.
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f48ebfef6d487566b5c3fe944f6d5470 | https://www.reuters.com/article/us-doping-jebet/doping-steeplechase-champion-jebet-handed-four-year-ban-for-doping-violation-idUSKBN20R2D8 | Doping: Steeplechase champion Jebet handed four-year ban for doping violation | Doping: Steeplechase champion Jebet handed four-year ban for doping violation
By Reuters Staff2 Min Read
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(Reuters) - Kenyan-born Bahraini runner Ruth Jebet has been handed a four-year ban after she was found guilty of testing positive for the banned blood booster r-EPO (recombinant erythropoietin), the Athletics Integrity Unit (AIU) said on Wednesday.
Jebet, the 2016 Olympic 3,000m steeplechase champion, was suspended in February 2018 after she failed an out-of-competition test.
“The panel... imposes a period of ineligibility of four years upon the athlete,” the AIU said in a statement.
“The period of provisional suspension imposed on the athlete from Feb. 4 2018 until the date of the Tribunal Award shall be credited against the total period of ineligibility.”
Jebet told the AIU in March 2018 that she had never taken the substance intentionally and the matter was referred to the disciplinary tribunal.
The AIU, however, was of the opinion that the violation was committed intentionally and said she took one-and-a-half years to admit to the offence while rejecting numerous invitations to do so earlier.
The 23-year-old admitted to the presence of r-EPO in her sample and its use in October last year and waived her right to the analysis of the B sample as she could not afford the costs.
The AIU also ordered the disqualification of all her results between Dec. 1 2017 and Feb. 4 2018 along with the forfeiture of medals, points, prize and appearance money.
Reporting by Rohith Nair in Bengaluru, editing by Pritha SarkarOur Standards: The Thomson Reuters Trust Principles.
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11e9d68da183c87d9f3f59d3259d25b2 | https://www.reuters.com/article/us-doping-swimming-sun/olympic-champion-swimmer-sun-did-not-break-rules-csa-idUSKCN1PM1IQ | Olympic champion swimmer Sun did not break rules: CSA | Olympic champion swimmer Sun did not break rules: CSA
By Reuters Staff2 Min Read
BERLIN (Reuters) - China’s world and Olympic swimming champion Sun Yang has not broken anti-doping rules, the Chinese swimming association said on Monday, rejecting allegations in a British newspaper.
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The Sunday Times reported an alleged dispute between doping testers and the swimmer last year which the newspaper said had resulted in damage to a sample.
China’s swimming association (CSA) said an investigation by world swimming body FINA had found the swimmer committed no anti-doping rule violation.
The CSA said Sun had rejected an out-of-competition doping test at his home in China on Sept. 4 last year over what the athlete said was a lack of proof of identification by the testers.
“After FINA called up an investigation of the issue, CSA ordered Sun Yang to fully cooperate with FINA and truly report every detail of the affair,” the CSA said in a statement to state-run news agency Xinhua.
“According to the final decision of the FINA Doping Panel, FINA confirms the athlete did not commit an anti-doping rule violation.”
FINA could not be immediately reached for comment, while the World Anti-Doping Agency said it was looking into the matter.
“I can confirm that WADA is aware of this case and that we are following up accordingly,” Maggie Durand, WADA’s manager of media relations and communications said.
Sun, a triple Olympic gold medalist and world record holder, was banned in 2014 for three months after testing positive for the banned stimulant trimetazidine during the Chinese national championships.
His lawyer Zhang Qihuai has threatened legal action, saying the newspaper reported with “a malign intention” which “severely damaged Sun Yang’s reputation and violated his privacy.”
“We reserve the right to file a lawsuit against the relevant international media which reported the incident,” Zhang said in a statement to Xinhua.
Reporting by Karolos Grohmann; Editing by Andrew Cawthorne and Alexander SmithOur Standards: The Thomson Reuters Trust Principles.
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d1fda67bcbabb7bf3343dd86f7947681 | https://www.reuters.com/article/us-dowdupont-ethanol/dupont-to-sell-cellulosic-ethanol-plant-in-blow-to-biofuel-idUSKBN1D22T5 | DuPont to sell cellulosic ethanol plant in blow to biofuel | DuPont to sell cellulosic ethanol plant in blow to biofuel
By Michael Hirtzer, Jarrett Renshaw3 Min Read
CHICAGO/NEW YORK (Reuters) - DuPont Industrial Biosciences, a unit of DowDuPont Inc, on Thursday said it halted operations at a two-year-old ethanol plant and will sell it, dealing another blow to efforts to create biofuels without using food crops.
The decision to shut the Iowa plant comes as political winds are undercutting efforts to produce ethanol from plant waste and wood shavings. The U.S. Environmental Protection Agency (EPA) this year has pushed to lower the amount of cellulosic biofuels that need to be blended into the nation’s fuels under a 2007 mandate, arguing the industry has not produced enough.
DuPont spent about $225 million to build the facility, which used corn stalks and stems to make ethanol, which is blended into gasoline. The plant was designed to produce 30 million gallons a year.
The EPA predicted in 2007 that U.S. cellulosic ethanol production could hit 1 billion gallons by 2020, but output this year is expected to reach only 7 million gallons, according to Renewable Fuels Association (RFA), a trade group.
High production costs and still-maturing technology have undercut the rationale for cellulosic biofuel, part of the original goal to use biofuels to help reduce the nation’s dependence on foreign oil.
“Cellulosic biofuel innovators have been dealing with mixed policy signals and tremendous regulatory uncertainty for the past decade,” RFA Chief Executive Bob Dinneen said in an interview.
Refiners such as PBF Energy, which must blend biofuels into the nation’s fuel pool or buy credits from those who do, have opposed the mandates.
“This is yet another example of why the nation’s biofuel mandate needs fundamental reform. More than a decade after the cellulosic portion of the mandate was passed, the fuel is still nonexistent,” PBF Energy lobbyist Brendan Williams said.
A DuPont Industrial Biosciences spokeswoman said the EPA’s plan to decrease cellulosic biofuel volumes played no role in shutting the plant.
DuPont and rivals POET-DSM and Abengoa SA built large-scale cellulosic ethanol plants to take advantage of the 2007 biofuels mandate. Abengoa sold its 25-million-gallon Kansas facility for $48.5 million about a year ago.
In July, the EPA proposed reducing blending targets for cellulosic biofuel, setting a 2018 target for 238 million gallons, down from 311 million gallons this year. Much of that mandate was expected to be reached by captured natural gas.
Editing by Gary McWilliams and Susan ThomasOur Standards: The Thomson Reuters Trust Principles.
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c27a9fd12aaad46d57d00703efb4be42 | https://www.reuters.com/article/us-drinkers-surgery-problem-idUSBRE95Q0TF20130627 | Heavy drinkers have more post-surgery problems | Heavy drinkers have more post-surgery problems
By Kathryn Doyle, Reuters Health4 Min Read
NEW YORK (Reuters Health) - People who have more than a couple of alcoholic drinks every day tend to have more complications after surgery than teetotalers or light drinkers, according to a review of past studies.
The analysis confirms that “alcohol and surgery are a bad combination,” Bolette Pedersen of the Clinical Health Promotion Center of Bispebjerg and Frederiksberg University Hospital in Denmark, told Reuters Health by email.
But it’s not clear what effect stopping drinking before surgery would have on complications, said Pedersen, who was not involved in the review.
Infections and slow wound healing were the most common complications associated with heavy drinking, according to lead author Marie Eliasen of the National Institute of Public Health at the University of Southern Denmark in Copenhagen.
Eliasen and her coauthors examined the results of 55 studies on pre-op drinking and post-op complications occurring up to 30 days after surgery. The studies looked at head and neck, abdominal and orthopedic surgeries for a variety of conditions, none of which was related to alcohol use.
Patients who drank heavily leading up to surgery, including those who abused alcohol or were dependent on it, were more than twice as likely to die in the month after their procedures than abstainers - though the risk of dying varied greatly by procedure.
Heavy drinkers were also 73 percent more likely to contract a post-op infection, 80 percent more likely to have difficulty breathing and 29 percent more likely to be admitted to the intensive care unit than non-drinkers, according to results published in the Annals of Surgery.
The associations were stronger with abdominal surgery - which can include gallbladder, liver and stomach procedures - than with other types of operations.
Low to moderate drinking - a drink or two per day or less - was not tied to post-op complications, but only a few studies addressed that group, Eliasen told Reuters Health.
Heavy alcohol use over time compromises the immune system, which makes the body more susceptible to infections, she said.
“Moreover, high alcohol consumption increases the endocrine stress response to surgery which may worsen existing conditions and reduces blood coagulation giving an increased risk of bleedings and slowing down wound healing processes,” she said.
The studies looked at alcohol consumption over different lengths of time, from months to years, so it’s unclear what duration of alcohol use leads to higher risks or when a patient’s drinking has the strongest effects. But it’s likely that the more you drink, the quicker the extra risks would appear, Eliasen said.
A previous study found that post-op risks declined when patients stopped drinking four or more weeks before surgery, she said.
Though it may seem like common sense, sometimes doctors don’t advise their patients to stop drinking before an operation, she added.
Few patients are offered specific stop-drinking programs as part of the lead up to surgery, Pedersen said. It’s much more common that patients are encouraged to stop smoking.
“In my opinion, it is now time to focus on intervention studies (randomized trials) to evaluate the effects of stop-drinking in relation to surgery,” she said.
SOURCE: Annals of Surgery, online May 31, 2013.
Our Standards: The Thomson Reuters Trust Principles.
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7a4a7c1636a161f81994fc2861dfa783 | https://www.reuters.com/article/us-drinking-idUSBRE85L02P20120622 | Drunk drivers show risky lifetime drinking habits: study | Drunk drivers show risky lifetime drinking habits: study
By Reuters Staff3 Min Read
(Reuters) - Many people convicted of drunk driving appear to have a lifelong struggle with risky drinking habits, and using their conviction as a way of getting them into treatment could have long-lasting benefits, according to a U.S. study.
In interviews with 700 adults with a drunk-driving conviction, researchers found that nearly half had either been drinking heavily for the long haul, or had fallen back into heavy drinking after trying to cut down for a time, according to their report in the journal Addiction.
What’s more, between one-fifth and one-third of those chronically risky drinkers met the definitions for alcohol or drug dependence, or for mental health conditions like depression and post-traumatic stress disorder.
“A DWI (driving while intoxicated) conviction identifies people at risk,” said study leader Sandra Lapham, at the Behavioral health Research Center of the Southwest in Albuquerque, New Mexico.
“It’s a red flag, and an opportunity to intervene.”
Some DWI offenders with drinking problems may not believe anything is wrong. Others may want help, but can’t pay for it, she added.
Lapham’s team interviewed 696 New Mexico adults who’d been convicted of DWI about 15 years earlier, asking them about their lifetime drinking patterns.
Women were considered “risky” drinkers if they habitually had more than seven drinks per week or four or more on any given day. For men, the limits were more than 14 drinks per week or five or more drinks a day.
Overall, 13 percent of the participants had varying drinking patterns throughout their lives. Another 14 percent said they had managed to cut down from heavy drinking to more moderate levels and keep it that way.
And 21 percent said they’d become abstinent, after some period of risky drinking.
But nearly half the group had ongoing struggles. Nineteen percent reported a “Lifetime” of risky drinking and one-quarter said they’d gone back to risky drinking after trying to quit or cut back.
Those people, the study found, had high rates of alcohol or drug dependence as well as other mental health disorders, like depression.
These are people who need “intensive treatment,” Lapham said - and getting them into treatment at the time of a DWI conviction could have the bonus of protecting other drivers and pedestrians, since DWI offenders have a high risk of repeat offenses.
"It's a difficult problem with no easy answer," Lapham added. SOURCE: bit.ly/KnqktC
Reporting from New York by Amy Norton at Reuters Health; editing by Elaine LiesOur Standards: The Thomson Reuters Trust Principles.
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dba11fed0d64233cb033b514c69ad1ce | https://www.reuters.com/article/us-driving-meds-impairment/many-drivers-ignore-or-dont-receive-warnings-about-prescription-meds-idINKBN1D31Y2?edition-redirect=in | Many drivers ignore or don’t receive warnings about prescription meds | Many drivers ignore or don’t receive warnings about prescription meds
By Cheryl Platzman Weinstock, Reuters Health5 Min Read
(Reuters Health) - One in five drivers in a random survey had taken prescription drugs that could impair their driving ability, and most were on the road despite having been warned about the risks, a U.S. study found.
“This is the first large-scale study of prescription drug use at the roadside. It gives us direction if we want to improve our knowledge of how to better prescribe and dispense prescription drugs,” said lead study author Robin Pollini, associate director of the West Virginia University School of Public Health’s Injury Control Research Center in Morgantown.
“The interesting thing about this finding is how many of these people got some sort of warning about how their medicine could impair them, but they were still on the road,” said James Hedlund, an independent safety consultant with Highway Safety North in Ithaca, New York, who was not involved in the research.
“The big take away from this study is that physicians and pharmacists have to do a better job talking with patients about how any drug can impair a driver’s abilities,” Hedlund, a former National Highway Traffic Safety Administration (NHTSA) official, told Reuters Health in a phone interview.
As reported in the Journal of Studies on Alcohol and Drugs, Pollini’s team analyzed data from the latest National Roadside Survey of Alcohol and Drug Use, 2013-2014, in which random drivers across 60 sites were asked about prescription drug use within the past 48 hours.
Nearly 20 percent of the 7,405 drivers who completed that part of the survey had used potentially dangerous medications, including sedatives, narcotics, antidepressants and stimulants - all of which can impair a person’s thinking and judgment - sometime in the past two days.
Among the drivers who answered the drug question, 8 percent had taken sedatives like Valium (diazepam), Xanax (alprazolam), Ambien (zolpidem) and Lunesta (eszopiclone), and 7.7 percent had taken antidepressants like Prozac (fluoxetine), Zoloft (sertraline) and Wellbutrin (bupropion). Narcotics like methadone, codeine, Vicodin (acetaminophen and hydrocodone) and similar prescription pain killers had been taken by 7.5 percent, and 3.9 percent had used stimulants like the ADHD medications Ritalin (methylphenidate) and Aderall (amphetamine).
Among those who used sedatives or narcotics, 85 percent said they received a warning from their healthcare provider or the medication label about possible impairment. However, just 63 percent of drivers using antidepressants and 58 percent of those using stimulants reported receiving warnings about their risk.
Asked if these drugs were potentially dangerous, study participants thought sleep aids, followed by morphine/codeine, most amphetamines and muscle relaxants were safe to take while driving. They thought use of ADHD medications was likely to cause a crash or result in legal ramifications, however.
Men were less likely than women to say they’d been warned about sedatives, researchers found. Night-time drivers were less likely than daytime drivers to report warnings about antidepressants and narcotics. Overall, black drivers were much more likely than non-Hispanic white drivers to report being warned about the risks of a prescription drug.
In an accompanying commentary. Dr. Benedikt Fischer of the Center for Addiction and Mental Health in Toronto notes that “prescription medications are considered therapeutic and thus seen as shielded from causing risk to individuals or society.” But this thinking is “misguided,” he writes, since many drugs have the potential to cause injury and mortality.
Driving while on prescription or illicit drugs has become increasingly common, whereas driving while intoxicated has declined more than three quarters since 1973, according to the NHTSA survey.
Drugs were detected more frequently than alcohol among fatally injured drivers in 2015, according to a report this year from the Governors Highway Safety Association, a non-profit organization of state highway safety offices. Forty-three percent of fatally injured drivers tested positive for drugs.
Pollini told Reuters Health in a phone interview that she hopes her research will remind physicians and pharmacists to have in-depth talks with their patients about the potential risks of medications. The U.S. should also take “solid steps” to improve warning label practices, she said, adding that many European countries have introduced color codes to drug labeling to increase patient safety.
SOURCES: bit.ly/2iqyA5B and bit.ly/2iU6CmC Journal of Studies on Alcohol and Drugs, online October 31, 2017.
Our Standards: The Thomson Reuters Trust Principles.
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991b7ac608931762e6045fd9c83b71f7 | https://www.reuters.com/article/us-driving-roadrage-life/new-york-drivers-named-most-aggressive-angry-in-u-s-idUSTRE55F1J720090616 | New York drivers named most aggressive, angry in U.S. | New York drivers named most aggressive, angry in U.S.
By Patricia Reaney3 Min Read
NEW YORK (Reuters) - New York has overtaken Miami to be voted the U.S. city with the angriest and most aggressive drivers, according to a survey on road rage released on Tuesday.
Automobiles wait in a traffic jam on a New York City highway November 20, 2007. Americans are expected to travel in record numbers for the Thanksgiving holiday. REUTERS/Mike Segar
Miami topped the annual poll for the last four years but voters in 25 major metropolitan areas gave New Yorkers the prize for angriest, most aggressive drivers who tailgate, speed, honk their horns, overreact and lose their tempers.
The response of New Yorkers to bad drivers also helped push the city into the top slot for road rage.
“New Yorkers were most likely to wave their fists or arms. They were most likely to lay on the horn and they were most likely to make some sort of obscene gesture,” said Michael Bush, of the marketing and consulting company Affinion Group, which commissioned the survey.
Dallas/Fort Worth came in second as the worst road rage city followed by Detroit, Atlanta and Minneapolis/St. Paul. Miami ranked a distant seventh.
Baltimore, Sacramento and Pittsburgh rounded out the top five cities with the most pleasant drivers.
Portland and Cleveland were voted to have the most courteous, considerate drivers.
“The real surprise to me is that there is no geographic way to break down road rage,” Bush told Reuters. “It is very much on a city-by-city basis, as opposed to geographic area.”
Talking on a cell phone was the behavior that irked motorists the most, with 84 percent of people citing it as the behavior most likely to incite road rage.
Driving too fast, tailgating, and eating and texting behind the wheel also caused stress and incited road rage.
Nearly 50 percent of the 2,518 people who took part in the AutoVantage Road Rage Survey also said other drivers frequently cut across the road without notice.
More than 25 percent of people in the telephone poll reported seeing drivers putting on make-up, shaving and reading while behind the wheel. A quarter said slamming on the brakes and running red lights sent their tempers flaring.
Detroit and San Francisco had the most text-happy drivers, while Miami won the distinction as the city where people were most likely to shave, read or put on make-up while driving.
Most people, 43 percent, reacted to bad driving by honking the horn. But 36 percent resorted to cursing, 13 percent waved their fists or arms and 10 percent made an obscene gesture.
Seven percent were so angry they called the police and one percent admitted they had slammed into the car in front of them.
“In Washington, D.C., four percent of drivers admitted to slamming into another driver,” said Bush. “They stand out in that one particular category.”
Our Standards: The Thomson Reuters Trust Principles.
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2ee82952828eef8707eb07da86dd35f0 | https://www.reuters.com/article/us-drone-warship-idUKKCN0QO19F20150819?edition-redirect=uk | 3D printed drone launched from warship | 3D printed drone launched from warship
By Matthew Stock2 Min Read
A team of engineers from the University of Southampton launched a 3D printed unmanned aerial vehicle (UAV) from the bow of a Royal Navy warship in a bid to demonstrate the potential use of lightweight drones at sea.
After being launched from HMS Mersey off the Dorset coast in the south of England, the UAV was flown autonomously on a pre-programmed route for a few before landing on Chesil Beach.
Known as the Southampton University Laser Sintered Aircraft (SULSA), the drone weighed 3kg with a wing-span of nearly 1.5 meters. The airframe was created on a 3D printer using laser sintered nylon, which uses a laser to fuse nylon powder into solid structures. It’s printed in four major parts and can be assembled without the use of any tools.
After being catapulted from the bow of the warship, it flew roughly 500 meters around the tidal lagoon of Wyke Regis Training Facility in Weymouth before coming into land.
The research was led by scientists and engineers from the University of Southampton under the name Project Triangle. In 2011, they initially tested the world’s first entirely “printed” aircraft.
Professor Andy Keane, from Engineering and the Environment at the University of Southampton, said the use of UAVs will continue to increase as production costs shrink and materials become more reliable. Their rugged airframes and use of 3D printed nylon, he said, advanced design thinking in the UAV community.
Officials from the Royal Navy said that they were interested in conceptual applications of unmanned and highly automated systems. They said that this trail helps explore how simple, automated systems have the potential to replace complex machines.
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8b4701b10dd22387138b0c97dfa8ecb7 | https://www.reuters.com/article/us-dropbox-results/dropbox-expects-drop-in-first-quarter-operating-margin-shares-fall-idUSKCN1QA2RV | Dropbox expects drop in first-quarter operating margin, shares fall | Dropbox expects drop in first-quarter operating margin, shares fall
By Munsif Vengattil3 Min Read
(Reuters) - File sharing and storage company Dropbox Inc forecast a drop in current-quarter operating margins from a year earlier, sending its shares down nearly 11 percent in extended trading.
The Dropbox app logo seen on a mobile phone in this illustration photo October 16, 2017. REUTERS/Thomas White/Illustration/File Photo
The weak margin outlook overshadowed a better-than-expected quarterly profit and revenue, and current quarter revenue forecast that came in above estimates.
“Margin guidance reflects conservatism,” DA Davidson analyst Rishi Jaluria said.
Some investors might be picking on the net additions of 400,000 paying customers, which was above consensus but fewer than last year, Jaluria said. Dropbox added 580,000 paying customers in the year-ago quarter.
Shares of the San Francisco-based company, which rallied more than 25 percent so far this year, were down 10.5 percent at $22.90 in extended trading.
Dropbox forecast first quarter adjusted operating margins between 7 percent and 8 percent, compared to 10.9 percent last year.
The company, which competes with Alphabet Inc’s Google, Microsoft Corp as well as Box Inc, forecast current-quarter revenue between $379 million and $382 million. Analysts were expecting $377 million.
Dropbox said it had 12.7 million subscribers as of Dec. 31, beating analysts’ average estimate of 12.54 million, according to FactSet.
The company reported average revenue of $119.61 per user, beating estimates of $118.8, according to IBES data from Refinitiv.
Started as a free service to share and store photos, music and other large files, Dropbox now offers a range of enterprise software services and is betting on international expansion for user growth.
Last month, the company said it would buy electronic signature company HelloSign for $230 million in cash, aiming to expand its portfolio of workflow-related products.
Quarterly loss narrowed to $9.5 million in Dropbox’s fourth financial report as a publicly traded company, from $37.7 million a year earlier. The company is yet to turn a profit, which is common for startups that invest heavily in growth.
Excluding items, the company earned 10 cents per share, beating estimates of 8 cents.
Total revenue rose 23 percent to $375.9 million, above estimates of $370 million.
Reporting by Munsif Vengattil in Bengaluru; Editing by Shinjini GanguliOur Standards: The Thomson Reuters Trust Principles.
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46194db8b06c94e6d1c9359673597010 | https://www.reuters.com/article/us-drought-mekong-idUSKCN0XE00N | Delta drought gives glimpse into bleak future for mighty Mekong | Delta drought gives glimpse into bleak future for mighty Mekong
By Ho Binh Minh6 Min Read
CU LAO DUNG, Vietnam (Reuters) - While China has been releasing water from a hydro-electric dam in the upper Mekong River to help relieve drought down river in Southeast Asia, little of it has flowed to Nguyen Van Thach’s sugarcane farm in southern Vietnam.
A farmer harvests dried sugarcane on her drought-stricken farm in Soc Trang province in the Mekong Delta, Vietnam March 31, 2016. Picture taken on March 31, 2016. REUTERS/Kham
After feeding his six cows with grass uprooted from a village nearby, Thach took a knife and cut a slice of sugarcane from his withered crop. “It’s too salty,” the 62-year-old farmer said, grimacing as he licked the piece of cane. “Even cows can’t eat this.”
Thach has quit growing sugarcane and is building houses instead to repay loans after his farm in Soc Trang province in Vietnam’s Mekong Delta rice bowl lost 10 million dong ($449).
The sprawling Mekong Delta has been worst hit by salination in a region that provides half of Vietnam’s rice and 60 percent of its shrimp and fish.
Low river levels have allowed seawater to penetrate 90 kms (56 miles) inland, ruining vast swathes of cropland in the fertile delta. Vietnam says the salt water intrusion in the delta is unprecedented.
It could be the new normal along the mighty Mekong, the 4,900 km (3,044 mile) river that sustains 60 million livelihoods as it flows through Laos, Thailand, Cambodia and Vietnam.
At least 39 hydro-electric dams are being built or under development in China, Laos, Thailand and Cambodia to meet the industrial demands of developing economies. Environmentalists say they are also endangering traditional agriculture downstream, where there is now less fresh water for drinking and irrigation.
The water China is discharging from its existing dams upstream has had little discernible impact as it dissipates into the expansive delta region where Thach and nearly 20 million other people live.
Vietnam is also suffering its most severe drought in 90 years, blamed partly on the El Nino weather phenomenon, which produces drier and hotter weather in Asia.
Climate change is also factor in the drought, said Nguyen Huu Thien, an independent expert on the Mekong Delta’s ecology.
“In the context of climate change, this kind of crisis (in the Mekong Delta) is forecast to happen more often, for example it could be once in 20 years instead of once in 90 years.”
Slideshow ( 6 images )
HITTING COMMODITY EXPORTS
Moreover, the delta, much of which is only two meters or less above sea level, has been sinking in recent years due to rising sea levels and heavy groundwater extraction from an ever increasing number of wells. Depleted water tables cause the ground to compact, allowing seawater to intrude into cropland and water supplies.
The drought and sea water intrusion is sapping Vietnam’s economy, which leans on commodity exports. The agriculture sector contracted 2.69 percent in the first quarter of 2016 and overall economic growth of 5.56 percent was the slowest in two years.
Vietnam is a major global exporter for rice, coffee, pepper, fish and shrimp. Preliminary losses for those crops so far this year are at 5.57 trillion dong ($250 million), according to a government report as of April 14, nearly 70 percent of which was in the Mekong Delta.
The drought has affected a third of the coffee farms in the Central Highlands coffee belt, said the Vietnam Coffee and Cocoa Association. Vietnam is the world’s second-biggest producer of the beans.
The agriculture ministry said sugar refineries reported an 11 percent drop in the cane volume to 10.23 million tonnes.
The government says 240,000 hectares (593,000 acres) of paddy have been destroyed in the world’s third-largest rice exporter.
Southwest of the delta in Bac Lieu, a major shrimp-raising province, signs are planted on dried-up shrimp ponds advertising land for sale or for lease.
Vietnam, a major shrimp exporter to the United States, produced 91,900 tonnes in the January-March period, down 1 percent from a year ago, government data says.
To Viet Tien, 61, has been raising shrimp since 1982 and has never seen it so bad. “It’s been too hot toward the bottom of the pond and shrimp can’t stand it,” he said. “On this (salty) soil, it’s impossible to switch to another crop,” Tien said.
HOSTAGE TO HYDROPOWER Mekong Delta farmers are beholden to those managing the river beyond Vietnam’s borders. Up to 70 percent of the water irrigating their crops comes from the river.
Pianporn Deetes of International Rivers, a U.S.-based advocacy group, said China has “absolute control” of the Mekong: “The region is being held hostage by hydropower development.”
Environmental groups have waged campaigns for years to stop the dam construction to no avail.
Thailand, Cambodia and Laos have 11 new dams planned between them, potentially affecting 82 percent of Mekong river’s water. Laos is building its economy around hydropower production to become the “Battery of Southeast Asia”.
The big dams not only reduce water volume, but also retain alluvial soil, needed to consolidate subsidence in the sinking Mekong Delta.
“The dams are killing the Mekong Delta,” said Duong Van Ni, a lecturer at Can Tho university. “A shortage of fertile soil is the unavoidable death.”
China will continue to release more water from its Jinghong dam in Yunnan province until the “low water period” is over, foreign ministry spokesman Lu Kang said on Tuesday.
The action was hailed as a goodwill gesture in the region, but also underlined the power China maintains over one of the world’s great river basins.
Additional reporting by Prak Chan Thul in PHNOM PENH, Amy Lefevre in BANGKOK, Marcy Nicholson in NEW YORK and David Brough in LONDON; Editing by Bill TarrantOur Standards: The Thomson Reuters Trust Principles.
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f1b479f9dbf6a4ee73c3156b38b572e6 | https://www.reuters.com/article/us-dubai-aerospace-m-a-exclusive/exclusive-dubai-aerospace-drops-plans-for-big-aircraft-order-targets-ma-deal-idUSKBN1WF0QM | Exclusive: Dubai Aerospace drops plans for big aircraft order, targets M&A deal | Exclusive: Dubai Aerospace drops plans for big aircraft order, targets M&A deal
By Alexander Cornwell4 Min Read
DUBAI (Reuters) - Dubai Aerospace Enterprise favors expanding its fleet via a takeover of a rival after the group was unable to agree on a major order from Airbus AIR.PA and Boeing BA.N, its chief executive said.
FILE PHOTO: The Airbus logo is pictured at Blagnac near Toulouse, France, March 20, 2019. REUTERS/Regis Duvignau
DAE, which joined the top tier of aircraft lessors with the 2017 acquisition of Dublin-based AWAS, was interested in a near-record purchase of 400 jets from Airbus and Boeing.
“It is hard to see how DAE is able to find a way to accept the price and terms and conditions the OEMs (original equipment manufacturer) are offering,” CEO Firoz Tarapore told Reuters.
A pricing disagreement had been an issue when Tarapore told Reuters in May 2018 DAE was interested in the order. This has led to DAE pursuing other options to increase its portfolio.
Boeing declined to comment on customer discussions. Airbus could not be immediately reached for comment.
The order for 400 single-aisle aircraft would have been worth more than $40 billion at list prices, though discounts of at least 50 percent are common on large orders.
This would have given DAE a pipeline of jets ordered directly from manufacturers on par with its rivals, though the world's biggest planemakers are mostly sold out of their workhorse single-aisle jets until 2024. reut.rs/2nC29HQ
The long wait is not a concern for the Dubai state fund company which wants to double its portfolio to 800 jets within the next six to eight years.
But Tarapore said the difference between the order price and the rental available in the leasing market was “so large that it doesn’t make any sense to have any hope that the gap narrows in the near future.”
“If you are sold out for four years what is your incentive to sell the first unit of the fifth year at any price other than the absolute highest price you can charge for it?” Tarapore said.
DAE could revisit a direct order in two years time as manufacturers clear their backlog of deliveries, though for now terms were “completely mispriced,” Tarapore said.
Instead, the Dubai-headquartered firm will look at expanding through organic growth, including sale and leaseback deals with airlines, as well as a potential takeover of a large rival.
“I think that our DNA is more aligned with doing a large, inorganic transaction and to supplement an inorganic transaction with organic growth,” Tarapore said.
Tarapore said an ideal takeover target would have around 100 to 200 jets in its fleet and none on order, but there are few of these.
“Whatever we end up buying has to advance our strategic objectives. As long as it does that, the price for that can be easily contextualised. That does not mean we are going to pay an insane price. It just means that for the right asset we would be willing to pay the market price.”
DAE was set up in 2006 with the aim of becoming one of the world’s biggest aircraft lessors, but started cancelling orders in 2010 as funds dried up following Dubai’s debt crisis.
The 2017 acquisition of AWAS, the industry’s 10th-biggest firm at the time, tripled DAE’s portfolio to about 400 owned, managed and committed aircraft worth over $14 billion.
Last week, it announced it had received a mandate from a fund manager to source and manage a $1.4 billion portfolio of jets.
That mandate will focus on Airbus A320ceo and Boeing 737NG jets, sourced from outside DAE’s existing portfolio.
The company also plans to raise more than $500 million once it obtains credit ratings from agencies S&P and Moodys. DAE has an investment grade credit rating of BBB-(minus) by Fitch.
Part of this money will be used to cover a $500 million debt maturity in August 2020, Tarapore said.
Reporting by Alexander Cornwell. Editing by Jane MerrimanOur Standards: The Thomson Reuters Trust Principles.
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c3ac210277cf3c556cf133b68f599e2e | https://www.reuters.com/article/us-dubsmash-m-a-reddit/reddit-to-buy-tiktok-rival-dubsmash-idUKKBN28O0B7?edition-redirect=uk | Reddit to buy TikTok rival Dubsmash | Reddit to buy TikTok rival Dubsmash
By Reuters Staff2 Min Read
FILE PHOTO: Reddit mascots are displayed at the company's headquarters in San Francisco, California April 15, 2014. REUTERS/Robert Galbraith/File Photo
(Reuters) -Social network firm Reddit said on Sunday it would buy short-video platform Dubsmash, becoming the latest company to expand in a space dominated by Chinese-owned TikTok.
The financial terms of the deal were not disclosed, but a spokeswoman for Reddit said the acquisition was based on a combination of cash and stock.
The success of ByteDance’s TikTok has prompted many social media companies to add short-video services to their platforms, with Snapchat Inc rolling out “Spotlight” in November and Facebook Inc launching “Instagram Reels” earlier this year.
Both Facebook and Snap had approached Dubsmash about a deal earlier this year and talks had progressed far enough to include discussions of a price tag in "the hundreds of millions of dollars," the Information reported here in August.
Reddit said in a blog post here that the deal would give its users, who can already upload and stream videos, access to Dubsmash's editing and short-video creation tools.
Founded in 2013, Dubsmash became popular as a platform that let its users create short-form lip-sync videos to popular movie dialogues or sound bites and share them with other users.
Dubsmash’s mobile app has been downloaded 196.8 million times globally since its launch, according to analytics firm Sensor Tower. For comparison, TikTok’s mobile app has been downloaded just under 2.6 billion times globally since its launch, the data showed.
San Francisco-based Reddit added that Dubsmash would maintain its own platform and brand.
Dubsmash’s entire team, including co-founders Suchit Dash, Jonas Drüppel and Tim Specht, will join Reddit.
Reporting by Kartik Mehindru, Shubham Kalia and Ayanti Bera in Bengaluru; Editing by Aditya Soni and Amy Caren DanielOur Standards: The Thomson Reuters Trust Principles.
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1b9cc46c0a7f7c4a8faa4e3f5839a94f | https://www.reuters.com/article/us-duke-dominion-atlantic-coast-pipeline/dominion-duke-exit-pipeline-project-after-years-of-delays-idUSKBN2460W5 | Dominion, Duke exit pipeline project after years of delays | Dominion, Duke exit pipeline project after years of delays
By Reuters Staff3 Min Read
(Reuters) - Dominion Energy Inc and Duke Energy Corp said on Sunday they decided to abandon the $8 billion Atlantic Coast Pipeline project after a long delay to clear legal roadblocks almost doubled its estimated cost.
Despite a favorable ruling by the United States Supreme Court in June, the two companies said it was not enough to justify the project’s economic viability given the increased legal uncertainty and anticipated delays.
The court ruling, which granted the federal government authority to allow the natural gas pipeline to cross under the popular Appalachian Trail in rural Virginia, was a solution to only one of several hurdles facing the project.
“This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States,” the statement added, quoting Dominion Chief Executive Thomas Farrell and Duke CEO Lynn Good.
According to Dominion and Duke, the cost for the ACP project increased to $8 billion from the original estimate of $4.5 to $5.0 billion.
Last year, the Trump administration’s move to speed up major energy projects had backfired amid challenges by environmentalists and others who opposed three of the biggest U.S. pipelines, one of which was ACP.
Over the years, judges had halted construction on these projects, ruling that the administration granted permits without conducting adequate studies or providing enough alternatives to protect endangered species or national forests.
“VICTORY,” environmental group Southern Environmental Law Center (SELC) said. “SELC is relieved to see Duke and Dominion make the right decision to walk away from it,” said Greg Buppert, a senior attorney at SELC.
Michael Brune, executive director of the Sierra Club said that Duke and Dominion did not decide to cancel the project but that people and frontline organizations that led this fight for years “forced” them to walk away.
Sierra Club and SELC were two of the environmental groups that sued to stop the pipeline after the U.S. Forest Service gave the green light for the project to run through the George Washington National Forest.
“The well-funded, obstructionist environmental lobby has successfully killed the Atlantic Coast Pipeline,” U.S. Secretary of Energy Dan Brouillette said in a statement. The project would have lowered energy costs for consumers in North Carolina and Virginia, he said.
ACP was first announced in 2014 to tackle lack of energy supply across North Carolina and Virginia. Dominion expected to complete it in early 2022.
In a separate announcement on Sunday, Richmond-based Dominion said it agreed to sell its natural gas transmission and storage network for $4 billion to Berkshire Hathaway Inc’s energy unit.
Reporting by Maria Ponnezhath in Bengaluru; editing by Diane CraftOur Standards: The Thomson Reuters Trust Principles.
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b2ac72849075cb6f9cdb0eb11c5cff68 | https://www.reuters.com/article/us-duke-energy-m-a-nextera-energy/nextera-energy-made-takeover-approach-to-duke-wsj-idUKKBN26L03D?edition-redirect=uk | NextEra Energy made takeover approach to Duke: WSJ | NextEra Energy made takeover approach to Duke: WSJ
By Reuters Staff1 Min Read
FILE PHOTO: A Duke Energy wind farm is pictured in Notrees, Texas, U.S. April 5, 2018. REUTERS/Joe White/File Photo
(Reuters) - Power producer NextEra Energy Inc NEE.N recently made a takeover approach to peer Duke Energy Corp DUK.N, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
NextEra is still interested in pursuing the combination even after Duke, with a market value of more than $60 billion, rebuffed its approach, the report said on.wsj.com/30m16w1.
The report, however, added there is no guarantee that NextEra would pursue a deal or whether its approach would culminate in one.
NextEra, worth about $139 billion, did not immediately respond to a Reuters request for comment, while Duke said it does not comment on market rumors or speculation.
Shares of Duke rose about 7% in extended trading.
Earlier in the day, a NextEra unit said it had entered into definitive agreements with affiliates of Blackstone to acquire electric transmission firm GridLiance for about $660 million, including debt.
Reporting by Praveen Paramasivam in Bengaluru, Editing by Sherry Jacob-PhillipsOur Standards: The Thomson Reuters Trust Principles.
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6b16d4fc95c0f803524637bff5701f6a | https://www.reuters.com/article/us-dutch-scientist-fraud-idUSTRE7A12PL20111102 | Dutch psychologist admits he made up research data | Dutch psychologist admits he made up research data
By Kate Kelland3 Min Read
LONDON (Reuters) - A Dutch psychologist has admitted making up data and faking research over many years in studies which were then published in peer-reviewed scientific journals.
Diederik Stapel, a psychologist working at Tilburg University in the Netherlands, said he had “failed as a scientist” and was ashamed of what he had done, but had been driven to falsifying research by constant pressure to perform.
The respected journal Science, which published some of Diederik Stapel’s work earlier this year, issued an “expression of concern” editorial in which it said it now had serious concerns about the validity of Stapel’s findings.
Stapel was suspended from his position at Tilburg University in the Netherlands in September when an investigation was launched by the university into his work.
“The official report ... indicates that the extent of the fraud by Stapel is substantial,” Science’s editor-in-chief Bruce Alberts wrote in the journal’s online edition Science Express. The editorial was posted online late on November 1.
In a statement posted on the internet via the Dutch newspaper Brabants Dagblad this week, Stapel admitted to falsifying data and apologized for his actions.
“I have failed as a scientist, as a researcher,” he said. “I have adjusted research data and faked research. Not just once, but many several times, and not just briefly, but over a long period of time.
“I am ashamed of this and I am deeply sorry.”
PRESSURE
Science published a study by Stapel and colleague Siegwart Lindenberg in April which found that people are more likely to discriminate against others when their surroundings are disordered and messy.
Alberts said he now wanted to alert readers “that serious concerns have been raised about the validity of the findings in this report.”
The process of peer review, in which other scientists are asked to critique and analyze a paper before it is accepted for publication in a journal, is designed to minimize the risk that false data will get through, but it is not infallible.
British doctor Andrew Wakefield was exposed as a fraud and struck off the medical register in Britain in 2010 after his paper on links between autism and the childhood measles, mumps and rubella (MMR) vaccine was discredited and withdrawn by The Lancet, which originally published the research in 1998.
Stapel said in his statement the pressure to succeed had been too great.
“I was not able to withstand the pressure to score points, to publish, to always have to be better,” he said in his statement. “I wanted too much, too fast. And in a system where there is little control, where people often work alone, I took the wrong path.”
Additional reporting by Douwe Miedema; editing by Ben Hirschler and Andrew RocheOur Standards: The Thomson Reuters Trust Principles.
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a20d68c00b976a9c853839291386328f | https://www.reuters.com/article/us-dvb-capital-increase-idUSKBN1342T3 | German shipping bank DVB plans capital increase: sources | German shipping bank DVB plans capital increase: sources
By Reuters Staff2 Min Read
FRANKFURT (Reuters) - German shipping bank DVB DVBG.F is preparing a capital increase due to losses taken on bad loans, two sources familiar with the matter said on Wednesday.
An announcement by DVB, which is owned by DZ Bank [DETGNY.UL], that it will issue new shares could come on Monday when it reports third-quarter results, one of the sources said.
The size of the capital increase has yet to be decided.
DVB and DZ Bank, both based in Frankfurt, declined to comment on a potential capital increase, news of which was reported earlier by Boersen-Zeitung.
German shipping banks like DVB, already struggling to recoup tens of billions of dollars of loans due to a global shipping industry slump, have also been hit by slowing growth in China and sluggish global trade.
In September, DVB warned investors it expects a consolidated net loss for 2016 in the double-digit million euro range.
The problems in DVB’s shipping portfolio have only worsened since then, said one of the sources, with charter rates coming under further pressure in the areas in which DVB is most active.
Reporting by Andreas Kroener; Writing by Joshua Franklin; Editing by Alexander SmithOur Standards: The Thomson Reuters Trust Principles.
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43473d9038fef5cec2853a2a0f8e22d6 | https://www.reuters.com/article/us-e-on-britain-solar-idUSKBN17L1NN | E.ON offers UK households solar panels with battery storage | E.ON offers UK households solar panels with battery storage
By Reuters Staff2 Min Read
A hot air balloon with the logo of German energy giant E.ON flies at dawn in Ronda, southern Spain, July 21, 2016. REUTERS/Jon Nazca/File Photo
LONDON (Reuters) - German utility E.ON launched a combined solar panel and battery storage product for British customers which could cut rising electricity bills by 50 percent, it said on Wednesday.
Britain’s energy providers are under pressure from the government to help customers find ways to reduce bills after five of the country’s big six suppliers, including E.ON significantly increased their prices this year.
E.ON’s customers in central England will be the first to be offered the new package and they will be able to input their details online to work out how much the solar panels and battery unit will cost depending on their home size.
E.ON said customers with south facing gardens, using solar panels on a shade free roof combined with the battery storage units, could save around 300 pounds ($385) a year, or 50 percent on their electricity bills.
The savings could rise to 560 pounds a year if customers sign up to the government’s feed-in-tariff incentive scheme for renewable electricity producers, E.ON said.
A spokeswoman for E.ON said the company is working with a number of battery and solar panel manufacturers and that the company plans to roll out the products to more of its customers later in the year.
The solar panel system, installed on the roof, converts sunlight into electricity when the sun is shining which can then be used straight away or stored in the battery unit to be used later.
($1 = 0.7794 pounds)
Reporting By Susanna Twidale; Editing by Elaine HardcastleOur Standards: The Thomson Reuters Trust Principles.
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10860f15131400e8368433e629f5741c | https://www.reuters.com/article/us-earthquake-study/government-warns-of-catastrophic-u-s-quake-idUSTRE4AJ9EV20081120 | Government warns of "catastrophic" U.S. quake | Government warns of "catastrophic" U.S. quake
By Carey Gillam2 Min Read
KANSAS CITY, Missouri (Reuters) - People in a vast seismic zone in the southern and midwestern United States would face catastrophic damage if a major earthquake struck there and should ensure that builders keep that risk in mind, a government report said on Thursday.
The Federal Emergency Management Agency said if earthquakes strike in what geologists define as the New Madrid Seismic Zone, they would cause “the highest economic losses due to a natural disaster in the United States.”
FEMA predicted a large earthquake would cause “widespread and catastrophic physical damage” across Alabama, Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee -- home to some 44 million people.
Tennessee is likely to be hardest hit, according to the study that sought to gauge the impact of a 7.7 magnitude earthquake in order to guide the government’s response.
In Tennessee alone, it forecast hundreds of collapsed bridges, tens of thousands of severely damaged buildings and a half a million households without water.
Transportation systems and hospitals would be wrecked, and police and fire departments impaired, the study said.
The zone, named for the town of New Madrid in Missouri’s southeast corner, is subject to frequent mild earthquakes.
Experts have long tried to predict the likelihood of a major quake like those that struck in 1811 and 1812. These shifted the course of the Mississippi River and rang church bells on the East Coast but caused few deaths amid a sparse population.
“People who live in these areas and the people who build in these areas certainly need to take into better account that at some time there is ... expected to be a catastrophic earthquake in that area, and they’d better be prepared for it,” said FEMA spokesperson Mary Margaret Walker.
Editing by Andrew Stern and Xavier BriandOur Standards: The Thomson Reuters Trust Principles.
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723309c2466d17c1f5a8f320e3a4f18e | https://www.reuters.com/article/us-easteurope-economy-automotive-analysi/auto-industry-set-to-put-brakes-on-central-europes-covid-19-recovery-idUKKCN24V0QT?edition-redirect=uk | Auto industry set to put brakes on central Europe's COVID-19 recovery | Auto industry set to put brakes on central Europe's COVID-19 recovery
By Krisztina Than, Jason Hovet5 Min Read
BUDAPEST/PRAGUE (Reuters) - The auto industry, long a driver of economic growth in central Europe, is likely to be one of the main drags on the region’s efforts this year to recover from the impact of COVID-19.
FILE PHOTO: Employees work on an assembly line as the Volkswagen construction plant reopens after shutting down due to the coronavirus disease (COVID-19) outbreak in Bratislava, Slovakia April 28, 2020. REUTERS/Radovan Stoklasa/File Photo
After communist rule ended in central Europe three decades ago, foreign carmakers invested heavily in a region that had a cheap and efficient workforce. The auto sector became an important source of foreign investment, employment and growth.
But with car production hit by factories idling during coronavirus lockdowns, and many still not back at full throttle, the industry is expected to be worse hit by COVID-19 than many others in central Europe.
That is bad news for the Czech Republic, Hungary and Slovakia, which are particularly reliant on the auto industry.
“Proportionally this sector is expected to suffer the biggest drop in the manufacturing sector in the region. This is where the recovery will be the slowest so it could be one of the main drags on GDP,” said Peter Virovacz, an economist at ING in Budapest.
Writing to other European Union states and EU institutions in April, the heads of the Czech, Polish, Hungarian and Slovak auto industry associations said their four countries employed 1.3 million people directly or indirectly in the auto sector and accounted for nearly a fifth of EU vehicle production.
The sector generates 4-6% of Hungary’s gross domestic product and a tenth of the Czech Republic’s GDP. In Slovakia, it accounts for 13% of GDP and half of industrial production.
But some car producers in central Europe expect output to drop 20-25% this year, reflecting a global production slump, and GDP is likely to be dented.
The EU executive, the European Commission, has forecast a 7.0% decline in GDP this year in Hungary, a 7.8% fall in the Czech Republic and a 9.0% drop in Slovakia. Poland’s GDP, which is less dependent on the auto sector, was seen declining 4.6%.
Related CoverageFactbox: Central Europe's car makers hit by COVID-19 pandemic
STEPPING PRODUCTION
Carmakers have largely avoided mass layoffs in the region and are bringing back staff, gradually increasing the number of shifts - and output - while observing social distancing rules.
Germany's Daimler DAIGn.DE said its Hungarian plant was working in two shifts and would reintroduce a third from the first week of August.
Kia Motors Slovakia, part of South Korea’s Kia Motors Co., is aiming to reintroduce a third shift from September.
“In the second half of 2020, we hope for more orders and an improvement in the situation on the automotive market so we can fully use production capacity,” a company spokesman said. Kia’s Slovak production dropped 27% in the first half of the year.
Groupe PSA Slovakia, owned by Peugeot maker PSA, has said it has enough orders until the autumn.
In Hungary, Suzuki 7269.T expects a 20% drop in output this year compared to its original forecast. It returned to two shifts in mid-July.
The Czech Automotive Industry Association forecasts car production in the country to drop by a fifth in 2020, and auto sector revenue to fall by at least 215 billion crowns ($9.6 billion).
Slideshow ( 3 images )
In their April letter, the four national auto industry associations asked the EU for the swift re-establishment of supply chains, financial support and a review of regulatory requirements.
Peter Erdelyi, chairman of the Hungarian Car Importers’ Association, said there had been no response yet.
A European Commission spokesperson told Reuters by email that any regulatory flexibility should not involve a delay or rollback of EU environmental ambitions.
“Strict environmental legislation is the best way to promote competitiveness and innovation,” the spokesperson said.
NO BUYERS, NO ORDERS
Thousands of component suppliers, employing tens of thousands in central Europe, have also been hit hard.
Koyo Bearings Czech Republic, part of Japan’s JTEKT Corporation, is running at 70% of levels before the pandemic.
“We expect demand will continue to gradually grow,” Koyo’s director, Petr Novak, said. “But we will not reach the levels of the pre-pandemic situation until maybe the middle of 2021. This is our best, optimistic scenario.”
Novak said Europe, which accounts for 80% of the factory’s sales, was not recovering as quickly as hoped and there were concerns about a second coronavirus wave.
The firm is planning week-to-week, with many of the 470 staff at home on government schemes to help businesses through the pandemic, he said.
Plastic molding company FAMU Kft, near Budapest, is planning only weeks ahead.
“Our survival strategy has been that we managed to win new markets and business in electronics and other segments,” said Jozsef Nyiro, who runs the company.
Nyiro, who is chairman of the Hungarian Automotive Suppliers’ Association, said the next few months would be critical for suppliers.
“A task for the government is to regenerate buyers’ demand ... because if there are buyers then we get orders,” he said.
Writing by Krisztina Than, additional reporting by Jan Strupczewski in Brussels, Editing by Timothy HeritageOur Standards: The Thomson Reuters Trust Principles.
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4fe04f5f4e4e6ee943d82a8247bcfccf | https://www.reuters.com/article/us-easteurope-markets/romanian-shares-equal-worst-day-on-record-after-bank-tax-surprise-idUKKCN1OI1P1?edition-redirect=uk | Romanian shares equal worst day on record after bank tax surprise | Romanian shares equal worst day on record after bank tax surprise
By Luiza Ilie, Sandor Peto4 Min Read
BUCHAREST/BUDAPEST (Reuters) - Romania’s stock market plunged 12 percent toward its worst day on record on Wednesday after the country’s government announced shock plans to tax banking assets and cap gas prices.
A man walks in front of Bucharest Stock Exchange headquarters in downtown Bucharest August 9, 2011. REUTERS/Bogdan Cristel
The move instantly wiped out what had been one of Europe's best market performances of the year and caused trouble as far afield as Austria where banks such as Erste ERST.VI and Raiffeisen RBIV.VI that operate in Romania fell heavily.
The trigger was an announcement late on Tuesday by Romania’s finance minister for a “tax on greed” that will cap money market lending rates to 1.5 percent.
There was also a plan to limit gas prices, enforce a turnover tax for energy and telecoms firms and enable Romanians to pull out of mandatory private pension funds after contributing for five years.
Bucharest's bluechip BETI bourse .BETI fell 12.2 percent, with lenders Banca Transylvania ROTLV.BX and French Societe Generale unit BRD Group shedding 18 percent and 10.3 percent, respectively.
Romania’s centrist President Klaus Iohannis and investors slammed the measures, saying they would hit consumers and banks and urged the government to scrap the plans.
“This avalanche of fiscal measures ... is unacceptable and the symptom of a fracture between the government and economic agents,” said the Coalition for Romania’s Development, which groups the country’s largest investors’ associations.
The American Chamber of Commerce called them “irresponsible and reckless,” and said they were “throwing the market into complete chaos”.
The 12.2 percent slump saw the BETI match it worst day on record which was back in January 2009 and made an already bad year look worse for Central European markets, where only Bucharest had notched up any visible gains before its plummet.
So far this year Prague's benchmark .PX has shed 7 percent while Warsaw's WIG20 .WIG20 has slid almost 6 percent as funds flowed into the rallying dollar from emerging market assets.
Bucharest’s government went back and forth on its tax intentions last year, provoking more uncertainty among investors and the leu currency having already enforced consumption-friendly wage and pension hikes at the expense of infrastructure investment.
Morgan Stanley said the banking tax implied a reduction of overall profits of more than 50 percent.
While other Central and Eastern European states have enforced new banking taxes in recent years, none had been tied to interbank rates.
“Linking a bank tax on ROBOR developments is also unprecedented and it could impair the central bank’s control over its monetary policy,” BCR said.
In Austria, Erste Bank, which gets 8.4 percent of its revenues from Romania’s biggest bank Banca Comerciala Romana, saw its shares tumble as much as 10 percent, and remained the day’s worst STOXX 600 faller despite recouping some losses.
Raiffeisen Bank, which has around 6 percent of its assets in Romania according to figures published last month, was last trading down 3.8 percent.
Romania’s measures deepened Prague’s losses as well.
The Prague bourse's main index fell 2.2 percent to its lowest level since July 2017 on Wednesday, driven by an 8 percent fall Erste's Czech-listed shares. ERST.PR.
Budapest's BUX also dipped .BUX though Warsaw .WIG20 bucked the regional trend with a slight gain.
In the currency markets, Romania's leu EURRON= shed 0.4 percent against the euro to trade at 4.6525, the zloty EURPLN= firmed 0.1 percent and the forint EURHUF= was steady as focus also turned to the U.S. Federal Reserve's final meeting of the year.
Signals that U.S. rate rises will slow next year could make emerging market assets look relatively more attractive. The recent steep drop in oil prices has helped corset inflation in Central Europe, reducing pressure on central banks to raise their interest rates.
Additional reporting by Alicja Ptak in Warsaw; writing by Marc Jones in London; editing by Louise Heavens and Jon BoyleOur Standards: The Thomson Reuters Trust Principles.
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9c6b5c1e9675c76f0e9e5221fbc103fd | https://www.reuters.com/article/us-easyjet-outlook-ceo/easyjet-ceo-sees-flying-restarting-with-empty-middle-seats-idUKKCN21Y0OA?edition-redirect=uk | EasyJet CEO sees flying restarting with empty middle seats | EasyJet CEO sees flying restarting with empty middle seats
By Reuters Staff1 Min Read
FILE PHOTO: Johan Lundgren CEO of easyJet, attends the Europe Aviation Summit in Brussels, Belgium March 3, 2020. REUTERS/Johanna Geron/File Photo
LONDON (Reuters) - The chief executive of easyJet EZJ.L said when flying restarts after the coronavirus crisis recedes planes are likely to operate with the middle seat empty due to social distancing regulations.
He also told reporters on a call on Thursday that the airline would stay cash positive in the event that its fleet was forced to stay grounded for nine months, and should the grounding last longer, it would be able to seek additional funding.
Reporting by Sarah Young; editing by James DaveyOur Standards: The Thomson Reuters Trust Principles.
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89aed0d86dcba09d2c5a1569e1585682 | https://www.reuters.com/article/us-easyjet-results-emissions/easyjet-seeks-to-do-the-right-thing-offsetting-emissions-critics-say-fly-less-idINKBN1XT23E | EasyJet seeks to 'do the right thing' offsetting emissions, critics say fly less | EasyJet seeks to 'do the right thing' offsetting emissions, critics say fly less
By Alistair Smout3 Min Read
LONDON (Reuters) - EasyJet’s pledge to offset its carbon emissions isn’t the end of its efforts to clean up its act, the budget airline’s chief executive said, adding it will look into hybrid and electric planes amid criticism the aviation sector isn’t doing enough.
FILE PHOTO: EasyJet airplanes are pictured at Tegel airport in Berlin, Germany, November 14, 2019. REUTERS/Fabrizio Bensch -/File Photo
On Tuesday, easyJet said it would become the first major airline to achieve net-zero carbon emissions across its whole network through offsetting of its flights.
Critics of such schemes say that paying to carry on flying is no solution to ending emissions in an industry that has been a polluter for decades.
The aviation industry accounts for over 2% of global greenhouse gas emissions, and if left unchecked emissions are expected to rise as passenger and flight numbers increase.
EasyJet boss Johan Lundgren said the plan to spend 25 million pounds ($32.35 million) a year offsetting emissions was the “right thing to do” and such measures were being increasingly demanded by investors and customers alike.
But he said that partnerships with Airbus and Wright Electric to develop hybrid and electric planes, as well as looking at operational efficiencies, showed that the airline was not complacent in thinking that the battle had been won.
“We’re not claiming here that we have the perfect endgame solution to what we do. But there’s a choice: whether you are going to do something, or you are not going to do something,” he said at a news conference in London.
“It’s down to somebody to really make a stand on this and we are actually encouraging every airline to follow suit.”
EasyJet said that it would undertake the offsetting through accredited schemes, including projects to do with forest conservation and renewable energy.
Lundgren said he had encountered the “flygskam” - or “flight shame” - movement in his native Sweden, which has shone the spotlight on the emissions that the industry produces and encourages people not to fly.
International airlines have signed up to the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) to cap CO2 emissions at 2020 levels through offsetting. British Airways owner IAG has pledged to offset its domestic flights.
EasyJet’s plan is more ambitious than both of those schemes but faced criticism from environmental campaigners.
“Airlines paying others so that they can go on polluting is not a solution to aviation’s climate problem,” said Andrew Murphy, aviation manager at environment group Transport and Environment.
“Decades of airlines’ unchecked emissions growth shows governments need to step up and regulate aviation’s climate impact by ending the sector’s tax privileges and mandating clean fuels.”
Reporting by Alistair Smout; Additional reporting by Susanna Twidale; Editing by Josephine Mason and Alexandra HudsonOur Standards: The Thomson Reuters Trust Principles.
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9bdceb1e4b4063f97349bca93c413167 | https://www.reuters.com/article/us-easyjet-strategy/easyjet-muscles-in-on-long-haul-passengers-with-new-connecting-service-idUSKCN1BO0K1 | EasyJet muscles in on long-haul passengers with new connecting service | EasyJet muscles in on long-haul passengers with new connecting service
By Alistair Smout, Victoria Bryan4 Min Read
LONDON (Reuters) - British budget airline easyJet EZJ.L launched a new booking platform on Wednesday to allow customers to more easily connect onto long-haul flights with other airlines, moving ahead of its rivals in a potentially lucrative market.
Passengers disembark from an EasyJet flight after arriving at Gibraltar airport in Gibraltar, April 19, 2017. REUTERS/Phil Noble
Both easyJet and Ryanair RYA.I have for some time been looking at so-called feeder flights to attract more customers, and have often said traditional carriers should use low cost rivals to bring passengers to their hubs.
The move is an attempt to muscle into the market for connections at international hub airports currently dominated by the big global airline alliances - Oneworld, SkyTeam and Star Alliance.
EasyJet passengers will be able to buy other airlines' flights on easyJet.com and will also initially be able to connect onto long-haul flights provided by Norwegian Air Shuttle NWC.OL and WestJet WJA.TO at London Gatwick using the airport's Gatwick Connect scheme.
Peter Duffy, chief commercial officer at easyJet, said 70 million passengers currently begin journeys at easyJet airports, and make a stop before traveling across continents, and that easyJet wanted a slice of that market.
“This will open up lots of new competition for long-haul travel and will drive prices down,” Duffy told reporters.
The Gatwick Connect scheme allows passengers to pick up their bags and drop them off at a transfer desk before going through security for their next flight. Passengers will have a minimum 2-1/2 hour connection time.
The move also increases pressure on British Airways ICAG.L at Gatwick, RBC analyst Damian Brewer said, where it lacks the short-haul feed for its intercontinental routes.
In January, Ryanair said it hoped to start offering connections to long-haul flights from Norwegian and Aer Lingus from May, but later said that would more likely be from September. It said technical issues were causing delays.
Norwegian’s chief commercial officer Thomas Ramdahl told Reuters it was still talking to Ryanair.
“We have a solution that works for two parties within the low-cost model, so we can easily bring this solution onto Ryanair if they are willing to join us,” Ramdahl said, adding easyJet had greater flight numbers to Gatwick, which is home to Norwegian’s biggest long-haul network.
Ramdahl said Norwegian was looking at similar arrangements in the United States and Asia, and had talked to Qantas-owned Jetstar QAN.AX about a connecting partnership for Norwegian's flights to Singapore.
At 1430 GMT, shares in Norwegian were up 2.6 percent, while easyJet's rose 1.6 percent, the biggest increase on Britain's FTSE 100 .FTSE.
Aviation consultant John Strickland said easyJet’s platform would make customers’ lives easier, but as the airline already operated very full planes, it was more a case of topping up business where available.
“Importantly for easyJet it won’t pick up the tab for any missed connections or baggage disruptions,” he added.
EasyJet said it did not expect any additional costs as a result of the new service. It also said it was in talks with carriers in the Middle East and Asia about joining the scheme, which would expand into other airports in Europe.
Additional reporting by Conor Humphries in Dublin and Joachim Dagenborg in Oslo; Editing by Mark PotterOur Standards: The Thomson Reuters Trust Principles.
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4feed0c798719330ac3531269bb9e8e0 | https://www.reuters.com/article/us-eating-idUKTRE75S84320110629?edition-redirect=uk | Study finds Americans are eating more - and more often | Study finds Americans are eating more - and more often
By Ned Barnett3 Min Read
RALEIGH, North Carolina (Reuters) - Americans may be cutting back on super-sized meals, but waistlines continue to expand from more frequent eating, according to a study released on Wednesday.
People line up to buy food at a fast food restaurant in Harlem in New York December 16, 2009. REUTERS/Finbarr O'Reilly
The number of daily meals and snacks consumed by U.S. adults rose to 4.8 in 2006 from 3.8 in 1977, according to University of North Carolina at Chapel Hill researchers who examined surveys of daily eating habits over a 30-year period.
In the top 10 percent of those surveyed, the number of daily meals and snacks rose to seven from five.
The analysis also found that although the size of meal portions has stabilized in recent years, but the number of total calories consumed is rising.
By 2006, the end of the period studied, Americans were consuming 570 more calories per day than they did in the late 1970s.
A chief culprit behind the calorie gain: Americans now consume 220 more calories daily from sugar-sweetened soft drinks than they did in the 1960s, the study found.
The study is thought to be the first to examine the combined contribution of changes in portion sizes, the caloric level of foods, and eating frequency on people’s total calorie consumption.
The study was funded by the National Institutes of Health, and the findings appear in the June 2011 issue of the journal PLoS Medicine.
Kiyah Duffey, a postdoctoral fellow at the UNC Interdisciplinary Obesity Center and one of the study’s authors, said large portion sizes drove the rise in calories during the early part of the study period.
“Around the time people became aware of the portion sizes, we see a decline in the portion sizes they are consuming,” Duffey told Reuters.
“It really seems that in the last couple of decades, it is the number of eating occasions that is driving this change.”
A proliferation of food availability and a decline in regular mealtimes may be fueling the pattern, Duffey said.
“People aren’t sitting down to three meals anymore,” she said. “We sort of think about eating all through the day.”
Some sources of dieting and health advice say frequent eating in small doses revs up the metabolism and controls hunger, and is a healthier way of eating than three big meals.
Duffey said what matters is what and how much you eat over the course of the day rather than how often you eat.
“Don’t eat seven times a day if what you’re eating is a salty snack or a pizza,” she said. “If you’re going to do that, reach for an apple instead.”
Edited by Colleen Jenkins and Peter BohanOur Standards: The Thomson Reuters Trust Principles.
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885cf90c22ad20ac33d6e7fdea42a1af | https://www.reuters.com/article/us-ebanx-strategy/brazilian-fintech-ebanx-launches-digital-wallets-for-consumers-idUSKBN1ZE0RU | Brazilian fintech Ebanx launches digital wallets for consumers | Brazilian fintech Ebanx launches digital wallets for consumers
By Reuters Staff2 Min Read
FILE PHOTO: EBANX, a South and Central American payment processor, displays on the exhibit hall floor during the Money 20/20 conference in Las Vegas, Nevada, U.S. on October 24, 2017. REUTERS/Steve Marcus
SAO PAULO (Reuters) - Payments startup Ebanx, one of Brazil’s latest fintechs to achieve “unicorn” status, on Wednesday began offering its digital wallets to 10,000 consumers on a test basis, expanding its product portfolio beyond services to e-commerce platforms.
Founded in 2012, Ebanx initially focused on processing payments from Brazilian clients of global websites like Alibaba Group Holdings’ AliExpress retail service, homesharing site Airbnb and music-streaming service Spotify Technology. More recently it started to offer payments processing services to Brazilian e-commerce platforms as well.
Initially, the Ebanx account will offer a card to individuals and will give clients rebates equal to 5% of their purchases as well as payments features, joining a wave of apps challenging Brazil’s traditional banks.
Co-founder Wagner Ruiz said the company may eventually offer savings accounts and other services and potentially expand them to more countries in Latin America. Besides Brazil, Ebanx operates in Mexico, Colombia, Argentina, Chile, Peru, Ecuador e Bolivia.
“In 18 months, I see Ebanx wallet reaching 1 million clients,” he said.
More than 100 Brazilian companies offer digital wallet accounts, products that have lured some 50 million customers so far.
Ebanx became last year a so-called unicorn, as privately held startups valued at $1 billion or more are known, after a second-round investment by investment firm FTV Capital.
Reporting by Carolina Mandl; Editing by Cynthia OstermanOur Standards: The Thomson Reuters Trust Principles.
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2e6610bac0ebcb0013899a269b9bdbba | https://www.reuters.com/article/us-ebay-password/u-s-states-probe-ebay-cyber-attack-as-customers-complain-idUSBREA4K0B420140522 | U.S. states probe eBay cyber attack as customers complain | U.S. states probe eBay cyber attack as customers complain
By Jim Finkle, Karen Freifeld5 Min Read
BOSTON/NEW YORK (Reuters) - EBay Inc came under pressure on Thursday over a massive hacking of customer data as three U.S. states began investigating the e-commerce company’s security practices.
Connecticut, Florida and Illinois said they are jointly investigating the matter. New York Attorney General Eric Schneiderman requested eBay provide free credit monitoring for everyone affected.
Details about what happened are still unclear because eBay has provided few details about the attack. It is also unclear what legal authority states have over eBay’s handling of the matter.
The states’ quick move shows that authorities are serious about holding companies accountable for securing data following high-profile breaches at other companies, including retailers Target Corp, Neiman Marcus and Michaels and credit monitoring bureau Experian Plc.
Congress and the Federal Trade Commission are investigating the Target breach, which resulted in the firing of the company’s chief executive and its chief information officer.
“There is definitely a climate shift,” said Jamie Court, president of the advocacy group Consumer Watchdog. “The departure of the Target CEO over the problem signals inside the board room and in the halls of government that these are betrayals of customers and that they won’t be tolerated.”
EBay shares fell 0.7 on Nasdaq, compared with a 0.6 increase in the Nasdaq Composite Index.
The investigation by the states will focus on eBay’s measures for securing data, circumstances that led to the breach and the company’s response, said Jaclyn Falkowski, a spokeswoman for Connecticut Attorney General George Jepsen.
EBay spokeswoman Amanda Miller declined to comment on the states’ actions, but said the company was working with authorities around the globe.
Related CoverageEBay says client information stolen in hacking attackEBay hack leaves many questions unanswered
“We have relationships with and proactively contacted a number of state, federal and international regulators and law enforcement agencies,” she said. “We are fully cooperating with them on all aspects of this incident.”
COMPLAINTS
Some customers complained on eBay Community forums that they had not received much information about the breach from eBay and have yet to get notifications by email, which the company has promised to do.
“This is all over the news - Nothing from EBay,” sfbay111 said in one post on an eBay forum.
Several security experts said the best practices would be to have a message pop up when users log in, telling them about the breach and forcing password changes.
As of Thursday afternoon, eBay did not have information on the attack visible on its market home page, www.ebay.com.
“That’s really poor incident response,” said David Kennedy, a cyber forensics expert who is CEO of TrustedSEC LLC. “EBay should be held to a higher standard.”
Kathryn Higa, a Honolulu-based entrepreneur and longtime eBay user, said she was “disappointed” with eBay’s response to the breach.
John Donahoe, chief executive of eBay, speaks at the Reuters Global Technology Summit in San Francisco, June 17, 2013. REUTERS/Stephen Lam
She would like the company to post notices on its marketplace, www.ebay.com. They are currently on its corporate site, www.ebayinc.com.
“They have not exercised all the vehicles available to them to protect their customers,” she told Reuters via telephone.
The company addressed delays in notification in a Tweet on Thursday afternoon: “Just to let everyone know, it will take some time for every eBay user to get our reset email. You can still go to eBay to change password.”
INVESTIGATION
A spokesman for the FBI’s San Francisco office said multiple agents were working on the case, but declined to comment on the likelihood of apprehending the culprits.
Even though the criminals have yet to surface, that has not prevented others from trying to profit from their work.
Someone posted a batch of emails, scrambled passwords, phone numbers and addresses of more than 12,000 people on the Internet, saying it was a sample of data stolen from eBay and offering to sell the full batch for 1.453 bitcoin, or a little more than $750.
EBay’s Miller said the information was not authentic.
Reuters spoke to six people whose phone numbers were included in that batch. While only four said they had eBay accounts, all of them said the data was correct, which suggests they may have been victims of another data breach.
Additional reporting by Mark Hosenball in Washington, Soham Chatterjee, Supantha Mukherjee and Subrat Patnaik in Bangalore, Joseph Menn in San Francisco; Editing by Dan GreblerOur Standards: The Thomson Reuters Trust Principles.
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fa5a375da85096c97f198dd9e7c7558e | https://www.reuters.com/article/us-ebay-tiffany-idUSTRE68C4PQ20100913 | eBay defeats Tiffany in counterfeit jewelry suit | eBay defeats Tiffany in counterfeit jewelry suit
By Jonathan Stempel3 Min Read
NEW YORK (Reuters) - EBay Inc on Monday won dismissal of a Tiffany & Co lawsuit accusing the auctioneer of deceiving customers by allowing the sale of counterfeit Tiffany jewelry on its website.
U.S. District Judge Richard Sullivan in Manhattan rejected Tiffany’s allegation that eBay engaged in false advertising, the last remaining claim after a federal appeals court on April 1 dismissed the rest of Tiffany’s trademark infringement case.
The case has been viewed as a challenge in the United States to Internet companies such as eBay, Google Inc and others that host services that other people provide, and do not responsible for users’ trademark violations.
“Tiffany failed to establish that eBay intentionally set out to deceive the public, much less that eBay’s conduct was of an egregious nature sufficient to create a presumption that consumers were being deceived,” the judge wrote.
Mark Aaron, a Tiffany spokesman, declined to comment. Michelle Fang, eBay’s associate general counsel, called the ruling “an unequivocal validation of eBay’s business practices.”
About $3.99 billion, or 46 percent, of eBay’s 2009 revenue came from the United States, a regulatory filing shows.
Tiffany accused eBay of advertising the sale of its goods through ads on its website, and through sponsored links on search engines, which would sometimes link to its own website and exhort readers to “Find Tiffany items at low prices.”
Sullivan agreed with Tiffany that eBay knew “a portion” of the goods being sold were fake.
But he said Tiffany failed to show that eBay’s advertisements misled customers or necessarily implied that all Tiffany products sold on its website were genuine.
“Tiffany has failed to present evidence that rises to the high level of egregious misconduct required to demonstrate that eBay had an intent to deceive customers,” he wrote.
Sullivan also pointed to eBay efforts to fight fraud, which the company has said costs up to $20 million a year.
In its April 1 ruling, the U.S. Second Circuit Court of Appeals had upheld Sullivan’s July 2008 dismissal of most of Tiffany’s lawsuit, saying that “eBay did not itself sell counterfeit Tiffany goods; only the fraudulent vendors did.”
Tiffany is based in New York and eBay in San Jose, California.
The case is Tiffany (NJ) Inc et al v. eBay Inc, U.S. District Court, Southern District of New York, No. 04-04607.
Reporting by Jonathan Stempel in New York. Additional reporting by Dhanya Skariachan in New York and Alexandria Sage in San Francisco. Editing by Derek Caney, Phil Berlowitz, Carol Bishopric and Robert MacMillanOur Standards: The Thomson Reuters Trust Principles.
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b437605234a98ed2fde78c9c33d8f984 | https://www.reuters.com/article/us-ebitda-loans/adjusted-ebitda-masks-higher-leverage-on-buyout-loans-idUSKBN1JW2HU | Adjusted Ebitda masks higher leverage on buyout loans | Adjusted Ebitda masks higher leverage on buyout loans
By Max Bower, David Brooke, LPC5 Min Read
LONDON (LPC) - Investors in European leveraged loans are increasingly concerned that private equity firms are making overly-aggressive adjustments to portfolio companies’ earnings to support higher debt loads.
Ebitda is a benchmark cashflow figure used by bankers to calculate a company’s leverage and market deals to investors, and adjustments reflect assumptions about companies’ future earnings potential.
Investors are worried that these adjustments and projections may not be achievable and are masking the true amount of leverage and debt that private equity firms are using, as well as the risk inherent in transactions.
“Going into the financial crisis you saw the same things happening. Private equity firms have always pushed the boundaries on what Ebitda they will get lenders to buy into,“ a fund manager said.
Higher Ebitda figures allow companies to borrow more and make overall leverage levels appear lower. Without adjustments, leverage ratios would be far higher, which could make deals difficult to sell to investors and raise red flags with regulators.
The European Central Bank followed US regulators in capping leverage ratios at six times Ebitda, but this is a guideline, and even adjusted leverage levels are often higher.
A recent €880m equivalent euro and sterling buyout loan backing pharmaceuticals manufacturer Zentiva's ROSCD.BX acquisition by Advent had leverage of 7.1 times based on adjusted 2017 Ebitda.
Private equity firms cite lower average Ebitda levels as the sign of a healthy market and routinely use them to differentiate between current market conditions and the peak of the market before 2008’s financial crisis.
But as resistance to aggressive loan documents grows, many investors are criticizing the scale of current Ebitda adjustments and demanding changes.
Finnish private healthcare company Mehilainen’s €760m Term Loan B priced wide of guidance this week and required a raft of changes to clear the market, including reducing the adjustments made in the Ebitda definition. The deal funded CVC’s acquisition of the company.
Adjustments linked to the synergies expected from mergers and acquisitions have the best chance of being achieved, ratings agency Moody’s said in a June report.
“We’ve worked with one company where the M&A-related adjustments have been very high but the market accepted them as they have a track record of delivering,” a co-head of leveraged finance said.
One-off “add-backs”, where companies claim a non-recurring cost saving, are a bigger problem. Only 45% of these adjustments were achieved on average and nearly 20% of issuers achieved none of their projected adjustments, Moody’s said.
These unusual adjustments are rising, driving the increase in issuer Ebitda adjustments to an average of 14% last year from 9.6% in 2016, according to the ratings agency.
“We are getting more questions about Ebitda adjustments. As an investor it is not always easy to make a judgment given the poor level of detail often available,” a London-based analyst said.
INTO MIDDLE MARKET
Around 77% of the global leveraged loan market is covenant-lite, according to S&P. More middle-market loans have covenants, but aggressive Ebitda definitions are undermining limited protection for lenders.
“What is the value of covenants with this level of Ebitda adjustment? With this headroom there has to be such a deterioration in the business before it bites,” a lawyer said.
The direct lending market is also not immune to Ebitda adjustments. Core Equity Holdings recently acquired a stake in UK-based Portman Dental Care with around £100m in debt financing provided by Alcentra, based on an Ebitda figure of £20m, which had been adjusted up from £9m.
Portman has expanded rapidly in the last few years, almost tripling the number of practices since 2014, but many lenders balked at the adjustment, which more than doubled Ebitda.
“It’s a whopping multiple,” a second fund manager said.
Discipline on documentation is stronger in the private debt market compared with larger deals due to the riskier nature of the companies.
In the US, where the private debt market is deeper, 35% of middle-market loans had Ebitda adjustments, according to Covenant Review. Adjustments linked to synergies are capped at around 10%-15% in the middle market, based on projections for the next 12 or even 18 months.
But the list of exceptional items, including uncapped non-recurring payments, also leave lenders exposed to restricted payments and further debt issuance by sponsors, which can weaken investors’ position.
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eb0279cd33492ea05059e180de317dca | https://www.reuters.com/article/us-ecb-banks-lending-idUKKCN11I1SX?edition-redirect=uk | ECB's light touch lets banks offload bad loans at own speed | ECB's light touch lets banks offload bad loans at own speed
By Francesco Canepa, Balazs Koranyi5 Min Read
FRANKFURT (Reuters) - Euro zone banks will get to set their own targets for cutting the 900 billion euros of bad loans left over from the financial crisis, facing sanctions only if they fall way short of the mark, new guidance by the European Central Bank showed on Monday.
The headquarters of the European Central Bank (ECB) are pictured in Frankfurt, Germany September 8, 2016. REUTERS/Ralph Orlowski
Banks in weak economies such as Greece, Portugal and Italy are still struggling under the burden of unpaid loans extended before the crisis, which reduce their ability to lend and undermine investor confidence. To see a graphic: tmsnrt.rs/2clwaCX
The ECB, as the euro zone’s top bank supervisor, is trying to get banks to manage down that mountain of soured credit. But it cannot push them too hard if it doesn’t want them to incur hefty losses, which would also strangle lending.
Under new guidance disclosed on Monday, banks will be asked to set numerical targets for the levels of non-performing loans they aim to reach in one and three years, and follow a number of other guidelines.
Failure to comply may lead to so-called ‘supervisory measures’ by the ECB, such as higher capital requirements.
But the ECB said the new guidelines would be non-binding and only “significant” deviations from them may trigger action, while solving the problem would take longer than three years in many cases.
This confirms an earlier Reuters report and suggests the ECB is raising the pressure on banks, rather than forcing their hands, to avoid hitting their profits too hard, which would eat into their capital.
“Part of the engagement is the assessment of whether the banks are close to compliance with the guidance or whether they have very significant gap,” said Sharon Donnery, the Irish deputy governor who chaired the ECB’s working group on bad loans.
“If there were significant gaps, then obviously we would be discussing with the bank how they would move close toward compliance with the guidance, particularly the time frame over which that was going to happen.”
As the euro zone’s central bank, the ECB has been trying to revive economic growth and inflation by stimulating lending via ultra-low interest rates and aggressive money printing.
That leaves the ECB walking a thin line between its duties as supervisor and its main objective of bringing inflation, currently near zero, to almost two percent.
“Magic wands don’t exist in finance and it is not in the interest of financial stability to create a fire sale,” said Marco Troiano, a director at Scope Ratings. “That would create a capital hole at banks.”
NO FIRE SALE
When the ECB disclosed plans to work on new guidelines for non-performing loans in January, some banks worried that it would force a fire sale of those assets. That would push down their selling price and hurt bank profits.
However, the guidelines showed banks will be given three years or, in many cases, longer.
“We chose a three-year target because most banks have a three-year projection in their business plans ... for a number of banks, this will not be the end of the story, it will likely take longer,” Donnery said.
That is likely to disappoint investors who were hoping for a clear-out that would remove the overhang of bad debt for good and allow them to buy those loans cheaply.
“This guidance gives banks a green light to manage NPLs internally, so this perpetuates the impasse,” said Gennaro Pucci, chief investment officer at PVE Capital, a fund that has been buying Italian bad loans.
“If you leave banks with this huge pile of non-performing loans, they won’t lend. So it’s just kicking the can down the road.”
Around 7 percent of all loans on the books of the 129 large banks supervised by the ECB were non-performing at the end of last year, meaning they hadn’t been repaid for at least three months, the ECB said in its report.
That ratio rises to 12 percent in Italy, 15 percent in Portugal and 47 percent in Greece. Greek banks and Italy's Monte Paschi BMPS.MI have already been handed ambitious targets for reducing their own bad debt.
The guidelines will now be subject to a public consultation, due to end on Nov. 15.
Graphic by Gustavo Cabrera; editing by Larry KingOur Standards: The Thomson Reuters Trust Principles.
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e8a1eec8f1ab417fead18c7a242b001a | https://www.reuters.com/article/us-ecb-basel/ecbs-villeroy-all-basel-iii-rules-should-be-implemented-everywhere-including-u-s-idUSKCN1TE1GE | ECB's Villeroy: all Basel III rules should be implemented everywhere, including U.S. | ECB's Villeroy: all Basel III rules should be implemented everywhere, including U.S.
By Reuters Staff2 Min Read
FILE PHOTO: European Central Bank policymaker Francois Villeroy de Galhau, who is also governor of the French central bank, attends the Paris Europlace International Financial Forum in Tokyo, Japan, November 19, 2018. REUTERS/Toru Hanai
PARIS (Reuters) - European Central Bank policymaker Francois Villeroy de Galhau on Thursday raised concerns about the implementation of the latest international ‘Basel III’ bank capital rules, saying they should be written into law everywhere, including the United States.
Villeroy said the compound of rules for banks on capital requirements, stress-testing and market liquidity risks agreed upon in the Basel agreement were crucial to protect countries’ economies against the devastating effects of a financial crisis such as the one that struck the world around a decade ago.
“We should resist the temptation of short memory and we should resist the temptation to forget,” Villeroy said at an event held in Paris by the European Banking Authority, which relocated to the French capital from London earlier this week.
The implementation of the Basel III rules has been delayed several times in several countries, and banks and governments have pushed for more delays as these intended regulations will result in additional costs for banks.
Reporting by Inti Landauro; Editing by Gareth JonesOur Standards: The Thomson Reuters Trust Principles.
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c39f8b316aa5af6dfb2062fb3a706cc0 | https://www.reuters.com/article/us-ecb-bitcoin-eu-idUSKCN12I1HC | ECB urges EU to curb virtual money on fear of losing control | ECB urges EU to curb virtual money on fear of losing control
By Francesco Canepa2 Min Read
The headquarters of the European Central Bank (ECB) are illuminated with a giant euro sign at the start of the "Luminale, light and building" event in Frankfurt, Germany, March 12, 2016. REUTERS/Kai Pfaffenbach/File Photo
FRANKFURT (Reuters) - The European Central Bank wants EU lawmakers to tighten proposed new rules on digital currencies such as bitcoin, fearing they might one day weaken its own control over money supply in the euro zone.
The European Commission’s draft rules, aimed at fighting terrorism, require currency exchange platforms to increase checks on the identities of people exchanging virtual currencies for real ones and report suspicious transactions.
In a legal opinion published on Tuesday, the ECB said EU institutions should not promote the use of digital currencies and should make clear they lack the legal status of currency or money.
“The reliance of economic actors on virtual currency units, if substantially increased in the future, could in principle affect the central banks’ control over the supply of money ... although under current practice this risk is limited,” the ECB said in the opinion for the European Parliament and Council.
“Thus (EU legislative bodies) should not seek in this particular context to promote a wider use of virtual currencies.”
The ECB argues the Commission’s proposal does not go far enough as it does not cover the use of virtual money to buy goods and services.
“Such transactions would not be covered by any of the control measures provided for in the proposal and could provide a means of financing illegal activities.”
Reporting by Francesco Canepa; Editing by Tom HeneghanOur Standards: The Thomson Reuters Trust Principles.
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544bb0251b522cfffb50bfcf03ebec8f | https://www.reuters.com/article/us-ecb-draghi-plan/special-report-inside-mario-draghis-euro-rescue-plan-idUSBRE88O09A20120926?edition-redirect=uk | Special Report: Inside Mario Draghi's euro rescue plan | Special Report: Inside Mario Draghi's euro rescue plan
By Paul Carrel, Noah Barkin, Annika Breidthardt16 Min Read
FRANKFURT/BERLIN (Reuters) - On a warm summer day on the eve of the Olympic Games, European Central Bank President Mario Draghi stood up at a business conference in London and dropped a bombshell.
“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” Draghi told the audience in Lancaster House, a grand building in central London, then paused for effect. “And believe me, it will be enough.”
Global markets, full of talk of a euro zone break-up, rallied sharply on Draghi’s unexpected message. Just as shocked were the ECB boss’s aides and his colleagues on the bank’s policymaking Governing Council, none of whom knew Draghi would make such a sweeping promise.
“Nobody knew this was going to happen. Nobody,” one senior ECB official said of the speech.
The truth was, the speech was just the beginning. Draghi was in no position to guarantee “whatever it takes.” His words were a gamble that set off weeks of frenzied backroom diplomacy and public sparring that would severely test the relationships of the main protagonists in the euro zone crisis.
Through conversations with senior ECB officials and leading political actors in the euro drama, most of them on condition of anonymity, Reuters has pieced together a detailed picture of the negotiations that led from Draghi’s late-July speech to his September 6 announcement that the ECB stood ready to buy “unlimited” amounts of bonds issued by the most stricken euro members.
Key to Draghi’s gambit was peeling off enough members of the ECB’s Governing Council. One of them, Jens Weidmann, head of the powerful Bundesbank, has become a vocal critic of Draghi’s plan. He and his hawkish German colleagues believe it will compromise the ECB’s sacred independence and stoke inflation, a taboo in Germany since hyper-inflation in the 1920s gave rise to the Nazis.
Yet getting Germany on board was essential. Europe’s biggest economy, it has served as the bloc’s paymaster during the crisis. If Draghi’s policies ran up against a German wall, they would surely fail.
In the end, Draghi won over everyone on the council but Weidmann, and crucially secured the backing of Europe’s dominant leader, German Chancellor Angela Merkel.
“Mario is someone who, when he is convinced he’s right, is not worried about going ahead and saying he’s right,” said Francesco Giavazzi, an Italian economics professor who has often worked with Draghi since they studied together at the Massachusetts Institute of Technology (MIT) in the 1970s.
This is the story of how Draghi got his way.
PRUSSIAN HELMET
Within hours of the London speech, the ECB president’s surprised colleagues had recognized its significance and leapt into action.
Joerg Asmussen, a 45-year-old former deputy finance minister who had joined the ECB in January, alerted Merkel.
Asmussen would emerge as a key player in the hectic weeks to come. A pragmatic German with strong European leanings, he had close ties to all the main players - Draghi, Merkel and Weidmann - giving him leverage and putting him in a unique position to help forge consensus.
While Asmussen informed his Berlin contacts, his French colleague on the ECB board Benoit Coeure sent word to Paris. Within 24 hours of Draghi’s speech, Merkel and French President Francois Hollande had spoken by phone and issued a statement echoing Draghi’s promise.
It was a first sign that the Italian’s risky, and still murky, plan might fly.
But the maneuvering had only just begun. On the other side of Frankfurt, in the 70s-era cement colossus that houses the Bundesbank, officials were seething at Draghi’s London speech and demanding he come clean about his intentions.
Early last year, the head of the German central bank Axel Weber had resigned abruptly in protest at the crisis-fighting policies of Draghi’s predecessor, Jean-Claude Trichet. The Frenchman had embarked on the ECB’S first-ever round of sovereign bond buying to drive down the borrowing costs of heavily indebted countries like Greece, Portugal, Spain and Italy. Weber, who had been in line to replace Trichet at the top of the ECB, denounced this as dangerous money printing to finance profligate states.
When Weber bolted, it opened the door to both Draghi and Weidmann, a former student of Weber’s who had served as Merkel’s top economic adviser in Berlin.
The youngest Bundesbank president ever, Weidmann was now in the same difficult position as his mentor had been. The ECB was on the verge of what looked like a new and ambitious bond-purchase program.
Slideshow ( 5 images )
Draghi needed to ensure Weidmann did not flee as Weber had. If he did, it might set off a backlash in Germany that would kill his plan even before it got off the ground.
The two met for coffee in Draghi’s office on the 35th floor of the Eurotower on July 30, four days after the speech.
Displayed on a shelf behind Draghi’s conference table was a black-and-gold spiked Prussian helmet from 1871, a gift from Germany’s Bild newspaper to symbolize its confidence that the Italian ECB boss would adhere to German-style discipline.
The conversation was civil and professional, sources familiar with the meeting told Reuters. But Weidmann made clear he would oppose any revival of bond-buying.
The two most powerful central bankers in Europe were at odds. Within days, Draghi was due to chair the first meeting of the ECB’s policy-setting council since his speech. Markets were expecting him to unveil concrete steps. But he had yet to flesh out his plan, and was still unsure how many of his colleagues shared Weidmann’s doubts.
A dinner in the Eurotower on the eve of the council meeting went well for Draghi. Sitting around a large table in a conference room down the hall from his office, four members of the ECB’s board - Asmussen was on vacation in France - and national central bank governors from the 17 euro member states exchanged ideas over baked goat’s cheese, roast beef and caramel mousse.
Draghi and Coeure presented the outlines of a bond-buying proposal put together by the board. Some, including Dutch central banker Klaas Knot and Finn Erkki Liikanen, had reservations. Only Weidmann was dead-set against it. The council agreed that ECB experts would be given several weeks to hone the plan.
On August 2, as the council put the finishing touches on the statement Draghi would deliver at an afternoon news conference, Weidmann made a special request. He wanted the ECB president to make clear to reporters that support for bond-buying had not been unanimous. Draghi agreed.
A few hours later, Draghi told reporters in Frankfurt and investors watching screens around the globe that the ECB could soon begin buying bonds to reduce borrowing costs in countries like Spain and Italy. But his lack of specifics disappointed markets. And he made one crucial mistake. Instead of sticking to past practice and remaining vague about who had dissented, he named Weidmann as the lone rebel, infuriating officials at the Bundesbank and on the ECB council who sympathized with the German, according to several sources.
“It wasn’t right for him to single out Weidmann,” the senior ECB official said.
In the following weeks, a stung Bundesbank would work overtime to undermine Draghi and his plans through a combination of public statements and aggressive leaks. Calling Draghi “soft,” Bild threatened to reclaim its Prussian helmet.
The debate reverberated in Berlin, unsettling Europe’s most powerful leader.
TIGHTROPE
Angela Merkel has been walking a tightrope since the euro crisis erupted in late 2009, using tough rhetoric to appease an electorate deeply skeptical about supporting crisis-hit euro members like Greece, while nudging bailout deals through parliament to keep the single currency intact.
Draghi’s plan presented the cautious 58-year-old chancellor with a dilemma. Her former adviser Weidmann and many in the conservative German establishment opposed it.
Yet for Merkel it was a godsend. With European leaders at odds over plans to integrate their fiscal policies and banking systems, the ECB was the only body capable of calming markets and keeping the euro zone stable.
Merkel, facing a re-election battle in 2013, was loath to see the euro zone explode on her watch. “Super Mario” had offered her a lifeline.
In private, sources say, the German leader complained to aides that Draghi was being unfairly attacked in Germany because he was Italian. In public she kept studiously quiet for weeks.
Then, in mid-August on a trip to Canada, Merkel backed the ECB chief unequivocally for the first time, describing his policies as “completely in line” with hers and other European leaders.
Back home in Germany, though, a backlash was building.
Slideshow ( 5 images )
On August 26, influential weekly Der Spiegel published an interview with Weidmann in which he likened Draghi’s bond plan to a dangerously addictive drug. Days later, Alexander Dobrindt, a top politician from Merkel’s Bavarian sister party, slammed Draghi as a “Falschmuenzer,” or forger.
Even Draghi’s allies seemed to be abandoning him. Asmussen had pulled overnighters with Weidmann in Berlin during the height of the global financial crisis and had studied with him at Bonn University.
The two were very different. Weidmann, reserved and serious, had refused to move his family from staid Frankfurt when he came to the German capital to advise Merkel. Asmussen, his partner and two daughters, couldn’t imagine uprooting from trendy Prenzlauer Berg in Berlin when he joined the ECB.
Born a year and a half apart, they are not close friends but call each other on birthdays and sometimes give each other a heads-up on the content of their newspaper interviews. Both were outraged when Bild, without talking to either of them, ran a story on August 27 saying they had turned against each other.
Asmussen was bothered by Weidmann’s isolation and began pushing back against Draghi, giving interviews and speeches in which he attached tough conditions - such as IMF involvement - to his boss’s bond-buying program. The Italian’s wiggle-room was shrinking by the day.
Then on August 30, Bild reported that Weidmann had considered resigning, just as Weber had. It wasn’t true - the youthful Bundesbank chief never seriously thought about stepping down, according to sources at the German central bank.
But the report heaped new pressure on Draghi. As August drew to a close, the ECB president canceled plans to attend a central bankers’ conference in Jackson Hole, Wyoming. He had a week to forge consensus on his bond-buying plan, yet virtually all the details still needed to be hammered out.
A PLAN COMES TOGETHER
Draghi scrambled over the weekend of September 1-2, and on his 65th birthday a day later, to stitch together his plan.
A reserved man, he had a breadth of experience most central bankers would envy. After earning an economics doctorate from MIT, he worked at the World Bank in Washington, headed the Italian Treasury, did a stint at Goldman Sachs, ran the Italian central bank and the Financial Stability Board (FSB), a global regulation body.
In contrast to his micro-managing predecessor Trichet, Draghi likes to delegate so that he can focus on the big strategic issues. He has earned a reputation for taking his time and listening carefully before making decisions. Once he does commit, people close to him say, he doesn’t look back.
Top secret papers had been circulating at the ECB since June exploring new alternatives for bond market intervention and the conditions that might be attached to it. Draghi needed to narrow down the options and clinch agreement - fast.
By insisting that any ECB bond buying be tied to an aid program involving the notoriously tough IMF, Asmussen had staked out a position that could discourage countries from asking for help in the first place.
His hard bargaining aimed to ensure ECB action did not lead countries to soft-pedal reforms. This was a concern borne of experience. In 2011, the ECB had bought Italian bonds only for Italy’s then-prime minister, Silvio Berlusconi, to drop reform promises days later. The half-dozen or so members of the policy council who sympathized with Weidmann were particularly worried about being taken in again.
Riled by some of the public debate about the ECB’s plans, Draghi argued that the risks facing the euro zone meant the ECB had to act. After a period of intense negotiations, he won out. At the September 6 policy meeting, all members of the Governing Council bar Weidmann backed the plan to buy sovereign bonds on secondary markets.
But Weidmann’s stance and the maneuvering of others sympathetic to his cause ensured any ECB intervention would come with a strong dose of “conditionality”.
Countries who wanted the ECB to intervene must first sign up to a formal aid program. IMF involvement would be sought and bond purchases restricted to maturities of up to 3 years. The ECB could choose to sell as well as buy bonds - a veiled warning to countries that it might pull the plug if they failed to deliver on their promises.
The new initiative just needed a name. Initially dubbed “Outright Open Market Operations” or (OOMO), the ECB board ditched that for “Monetary Outright Transactions” (MOT), before settling on the more grammatical “Outright Monetary Transactions” (OMT) shortly before the program was unveiled.
Beginning his news conference with a wry smile, Draghi announced: “Under appropriate conditions, we will have a fully effective backstop to prevent potentially destructive scenarios.”
He then made clear the volume of bond purchases would be unlimited. Euro zone blue chip stocks soared to levels not seen since March and the euro extended its upward march. A week later, Germany’s Constitutional Court gave a green light for Europe’s new bailout fund and Dutch voters handed pro-European parties a sweeping election victory.
After three years of seemingly constant crisis, Europe could breathe again.
PROOF IN THE PUDDING
It is far too early to hail Draghi’s plan as a solution to the crisis.
The central bank has bought no bonds yet and its members are already sending conflicting signals over how the plan will be implemented.
Many questions remain. Will countries need to sign up to tough new reforms on top of those already being implemented before the ECB jumps to their aid? If they do, will it dissuade governments in Rome and Madrid from seeking aid at all?
And are Draghi and his colleagues really prepared to put their money where their mouth is and buy an unlimited amount of bonds? A hesitant approach, inhibited by German doubts, doomed Trichet’s Securities Markets Programme (SMP) to failure.
“It will work if the expectation of unlimited support is not altered or compromised in some way,” said Domenico Lombardi, a senior fellow at the Brookings Institution and former IMF executive board member, who knows Draghi.
“The key word is unlimited,” he added. “It has been said in words, but the actions that follow will have to be consistent.”
Perhaps a bigger question is the longer-term impact of Draghi’s plan on sentiment in Germany. At the single currency’s birth, the ECB was sold to skeptical Germans as a euro-wide carbon-copy of the Bundesbank. Combating inflation was to be its sole objective and its independence sacred.
Now many Germans feel betrayed, some convinced the ECB has been taken over by a cabal of dovish southerners. A poll released the day Draghi announced his plan showed nearly one in two Germans had little or no confidence in him.
Still, Draghi has bought Europe time, and given politicians more space to sort out the mess. The currency’s fate hinges on whether those politicians grab the opportunity Draghi promised them on that warm summer day in London.
Paul Carrel reported from Frankfurt, and Noah Barkin and Annika Breidthardt from Berlin; Edited by Simon Robinson and Sara LedwithOur Standards: The Thomson Reuters Trust Principles.
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6a91b3ea10180d405ed2422728c43f36 | https://www.reuters.com/article/us-ecb-greece/ecb-to-swap-greek-bonds-to-avoid-forced-losses-sources-idUSTRE81F1EK20120216 | ECB to swap Greek bonds to avoid forced losses -sources | ECB to swap Greek bonds to avoid forced losses -sources
By Reuters Staff2 Min Read
FRANKFURT (Reuters) - The national central banks in the euro zone are set to exchange their holdings of Greek bonds into new bonds in the run up to a private sector debt deal to avoid taking any forced losses, euro zone sources said on Thursday.
The euro zone is putting the finishing touches to a second bailout deal for Greece for finance ministers’ approval on Monday, paving the way for a debt swap with its private creditors needed to avoid a ruinous default in March.
The deal, which aims to halve in nominal terms what Greece owes to investors, slashing its debts by 100 billion euros, is set to include a legal requirement for bondholders to accept losses. This would have put the ECB in a tricky position, leaving it open to claims it was financing governments.
Two euro zone sources said that to avoid the problem, the ECB would swap its bonds for new ones ahead of the private sector debt swap, which would allow it to stay out of the debt deal.
Sources said the process could start over the weekend, with one adding that the move was a technicality and that the new bonds would have the same terms as the original ones.
The ECB declined to comment.
According to euro zone sources, the ECB owns roughly 50 billion euros ($65 billion) worth of Greek bonds as a result of a controversial emergency support program started in May 2010.
It bought the bonds at a discount, however, paying just under 40 billion euros. This means it is sitting on a paper profit of 10-15 billion euros, money which it has made clear could be directed back to Greece. ($1 = 0.7668 euros)
Reporting By Frankfurt Newsroom; Editing by Ruth PitchfordOur Standards: The Thomson Reuters Trust Principles.
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09ddb0dba9079cdad5b1c2ae5e4aa48c | https://www.reuters.com/article/us-ecb-nowotny-idUSKCN0XK0AN | ECB's Nowotny says negative rates necessary to avoid deflation | ECB's Nowotny says negative rates necessary to avoid deflation
By Reuters Staff2 Min Read
European Central Bank Governing Council member Ewald Nowotny addresses a news conference in Vienna, Austria, January 22, 2016. REUTERS/Heinz-Peter Bader
VIENNA (Reuters) - The euro zone needs negative interest rates to avoid sliding into deflation, European Central Bank Governing Council member Ewald Nowotny said in an Austrian newspaper interview, defending the policy against widespread criticism in Germany.
The ECB kept the cost of borrowing for banks at zero on Thursday and will continue to charge them 0.4 percent for parking money at the central bank.
A slew of German politicians have complained in recent weeks that low interest rates are hurting savers.
But Nowotny defended the policy.
“You have to discuss negative rates in a broad context,” the head of the Austrian central bank was quoted as saying by the newspaper Der Standard on Saturday.
They are part of the central bank’s efforts to stabilize Europe’s economic situation after a severe crisis, he said. “Now it is all about preventing Europe from dropping into deflation.”
He said that he would welcome it if interest rates could be raised again “the sooner the better”, but that the conditions must be right.
“This will happen as soon as the economy is doing better, business activity picks up and inflation gets higher.”
Countering the criticism of low interest rates, Draghi himself said on Thursday that some of it could be seen as endangering its independence, which could delay investment and hence prolong its current policies.
Reporting by Kirsti Knolle; Editing by Hugh LawsonOur Standards: The Thomson Reuters Trust Principles.
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8dba2c85ba8b663dca403183fb7a8935 | https://www.reuters.com/article/us-ecb-policy-bundesbank/ecb-faces-hurdles-on-long-road-to-normal-policy-weidmann-idUSKCN1M01W1 | ECB faces hurdles on long road to normal policy: Weidmann | ECB faces hurdles on long road to normal policy: Weidmann
By Reuters Staff2 Min Read
FRANKFURT (Reuters) - The European Central Bank faces hurdles on the way to normalizing its monetary policy after years of extraordinary stimulus, ECB policy maker Jens Weidmann said in an interview published on Thursday.
FILE PHOTO: Germany's Bundesbank President Jens Weidmann speaks in Berlin, Germany, August 23, 2018. REUTERS/Hannibal Hanschke -/File Photo
The ECB is due to end its money-printing program at the end of this year after pumping 2.6 trillion euro ($3.06 trillion)on the bond market and has hinted at a rate hike late next year if inflation in the euro zone extends its gentle acceleration.
But clouds are already forming on the horizon, with emerging economies feeling the squeeze of higher U.S. interest rates and trade frictions between the United States and China weighing on growth.
Even Weidmann, the head of Germany’s central bank and a prominent hawk on the ECB’s policy-making body, struck a cautious tone.
“(Policy normalization) is a long road which hides big challenges and whose end-point has yet to be determined,” he told financial newspaper Handelsblatt.
Long-considered the front-runner to succeed Mario Draghi as ECB President next year, Weidmann will need the support of German Chancellor Angela Merkel to secure the job at the helm of the euro zone’s most powerful institution.
Echoing Merkel, Weidmann poured cold water on the notion of creating a parallel European payment system to shield companies from the United States’ policy choices, such as recent sanctions against Iran.
“Many companies and banks are linked to the United States anyway,” Weidmann said.
The Bundesbank’s President also said the idea of boosting the role of the euro in international commerce, put forward by the head of the European Commission Jean-Claude Juncker, was “not a monetary policy goal” for the ECB.
($1 = 0.8501 euros)
Reporting By Francesco Canepa; Editing by Toby ChopraOur Standards: The Thomson Reuters Trust Principles.
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3391c8f522242e7325dfd1c6ab881524 | https://www.reuters.com/article/us-ecb-policy-decos/ecbs-de-cos-says-foreign-exchange-moves-between-u-s-dollar-and-euro-is-worrying-idUSKBN27W1RM | ECB's De Cos says foreign exchange moves between U.S. Dollar and euro is worrying | ECB's De Cos says foreign exchange moves between U.S. Dollar and euro is worrying
By Reuters Staff1 Min Read
FILE PHOTO: George Washington is seen with printed medical masks on a U.S. dollar near Euro banknotes in this illustration taken, March 31, 2020. REUTERS/Dado Ruvic/Illustration/File Photo
MADRID (Reuters) - Foreign exchanges moves between the U.S. dollar and the euro are something to worry about and we will keep monitoring it, ECB policymaker Pablo Hernandez de Cos said on Monday.
“Obviously, this was and is a reason for concern, not because the ECB has an FX exchange objective, but simply because this is an important variable in determining the financial conditions of the area,” De Cos told a financial event.
Reporting by Jesús Aguado and Emma PinedoOur Standards: The Thomson Reuters Trust Principles.
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1a81e6f5a9b0880303e63c955af62368 | https://www.reuters.com/article/us-ecb-policy-deguindos/ecbs-de-guindos-says-euro-zone-economy-has-already-bottomed-out-idUKKBN22P2KA?edition-redirect=uk | ECB's de Guindos says euro zone economy has already bottomed out | ECB's de Guindos says euro zone economy has already bottomed out
By Reuters Staff1 Min Read
FILE PHOTO: European Central Bank (ECB) Vice-President Luis de Guindos attends an European Union finance ministers meeting in Brussels, Belgium January 21, 2020. REUTERS/Johanna Geron/File Photo
MADRID (Reuters) - The euro zone has already left the worst behind in terms of the economic impact from the current coronavirus pandemic although it will take the bloc two years to fully recover, European Central Bank Vice President Luis de Guindos said on Wednesday.
“In 2021, though there is still a high level of uncertainty, we could reach a growth rate of around 6 % in the euro zone,” De Guindos said.
The euro zone economy is facing a deep recession amid the coronavirus pandemic and greater cooperation is needed in fiscal policy to support the recovery, he said.
Reporting By Jesús Aguado and Emma Pinedo; editing by Andrei KhalipOur Standards: The Thomson Reuters Trust Principles.
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641948417d6985b038e64c0f739107aa | https://www.reuters.com/article/us-ecb-policy-forecasts/ecb-tweaks-economic-projections-idUSKBN1YG1NY?il=0 | ECB tweaks economic projections | ECB tweaks economic projections
By Reuters Staff1 Min Read
FILE PHOTO: European Central Bank (ECB) President Christine Lagarde gives a signature which will be implemented on the newly printed euro banknotes at the bank's headquarters in Frankfurt, Germany November 27, 2019. REUTERS/Ralph Orlowski
FRANKFURT (Reuters) - The European Central Bank tweaked its inflation and growth projections on Thursday, making only small changes and continuing to predict a slow but steady recovery in the coming years.
With a global trade war still weighing on confidence, Europe’s vast industrial sector has struggled throughout the year. But recent data suggested that growth has bottomed out and Germany, the bloc’s biggest economy, avoided a widely predicted recession.
Risks to the outlook nevertheless remain skewed to the downside, ECB President Christine Lagarde told a news conference, pointing to geopolitical uncertainty, protectionism and vulnerabilities in emerging markets as key risks.
The following are the ECB staff’s new projections for inflation and GDP growth, with September forecasts in brackets. The ECB also made its initial projections for 2022.
The ECB updates projections once a quarter.
Reporting by Balazs Koranyi; Editing by Catherine EvansOur Standards: The Thomson Reuters Trust Principles.
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380795742fb26a7e3f5531b67192b11a | https://www.reuters.com/article/us-ecb-policy-germany-eu/eu-could-open-legal-case-again-germany-over-ecb-bond-purchases-ruling-commission-idUKKBN22M0KN?edition-redirect=uk | EU could open legal case against Germany over ECB bond-purchases ruling: Commission | EU could open legal case against Germany over ECB bond-purchases ruling: Commission
By Reuters Staff2 Min Read
Slideshow ( 2 images )
BRUSSELS (Reuters) - The European Commission could open a legal case against Germany over a ruling by the country’s constitutional court that the European Central Bank had overstepped its mandate with bond purchases, the EU executive arm said on Sunday.
The German court in Karlsruhe last Tuesday gave the ECB three months to justify its flagship euro zone stimulus scheme or said the Bundesbank might have to quit it.
In response, the European Union’s top court - which had previously gave its green light to the ECB scheme - and the European Commission have said that EU law holds precedence over national regulations. They added that the European Court of Justice’s rulings were binding for courts in the 27 member states of the bloc.
On Sunday, Commission President Ursula von der Leyen went a step further, saying the EU executive might end up opening a legal case against Berlin.
“The recent ruling of the German Constitutional Court put under the spotlight two issues of the European Union: the euro system and the European legal system,” she said in a statement.
“We are now analysing the ruling of the German Constitutional Court in detail. And we will look into possible next steps, which may include the option of infringement proceedings,” she said.
Infringements are legal cases the Commission can bring before the Luxembourg-based Court of Justice of the EU, if the Brussels-based executive deems a member state is violating EU law. The court can order a nation to make amends, or face hefty fines.
Reporting by Gabriela Baczynska; Editing by Pravin CharOur Standards: The Thomson Reuters Trust Principles.
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115542a6fa8e37004c906a06d0efd362 | https://www.reuters.com/article/us-ecb-policy-hansson/ecbs-hansson-calls-for-changing-in-policy-message-because-growth-is-strong-idUSKBN1ED0YK?il=0 | ECB's Hansson calls for changing in policy message because growth is strong | ECB's Hansson calls for changing in policy message because growth is strong
By Reuters Staff1 Min Read
FILE PHOTO - Estonian bank governor Ardo Hansson listens during a news conference following the Governing Council meeting in Tallinn, Estonia, June 8, 2017. REUTERS/Ints Kalnins
TALLINN (Reuters) - The European Central Bank should consider changing its policy message, which includes a pledge to buy bonds until inflation recovers, as the outlook for inflation is improving, ECB rate setter Ardo Hansson said on Tuesday.
“The fact that the growth is so strong gives us a lot confidence that (price) pressure will build up over time,” Hansson, also Estonia’s central bank governor, told reporters.
“Moving to a communication which draws attention to the multi-faceted elements of monetary policy including interest rates is probably something that we should consider over the coming months.”
Reporting By David Mardiste, Writing by Francesco Canepa in Frankfurt Editing by Jeremy GauntOur Standards: The Thomson Reuters Trust Principles.
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a464676aa0531ceaefd1995f7b5ad2e2 | https://www.reuters.com/article/us-ecb-policy-highlights/lagarde-comments-at-ecb-press-conference-idUSKBN261247?il=0 | Lagarde comments at ECB press conference | Lagarde comments at ECB press conference
By Reuters Staff3 Min Read
FRANKFURT (Reuters) - The European Central Bank left policy unchanged on Thursday but with the economic recovery losing momentum and a strong euro dampening inflation expectations, ECB President Christine Lagarde was expected to set the stage for more stimulus later.
Following are highlights of Lagarde’s comments at a post-policy meeting press conference.
DOWNSIDE RISKS
“Overall, the balance of risks to the euro area growth outlook is seen to remain on the downside. This assessment, largely reflects the still uncertain, economic and financial implications of the pandemic.”
ELEVATED UNCETAINTY
“Elevated uncertainty about the economic outlook continues to weigh on consumer spending and business investment.”
WEAK PRICE PRESSURES
“Headline inflation is being dampened by low energy prices and weak price pressures in the context of subdued demand and significant labour market slack.”
AMPLE STIMULUS NEEDED
“Ample monetary stimulus remains necessary to support the economic recovery and to safeguard medium-term price stability.”
SLOWING SERVICES
“While activity in the manfacturing sector has continued to improve, momentum in the sevices sector has slowed somehwhat recently.”
REINVESTING IN FULL
“We intend to continue reinvesting in full. The principal payments from maturing securities purchased under the APP for an extended period of time, past the date when we start raising the key ECB interest rates. And in any case, for as long as necessary to maintain favourable liquidity conditions, and an ample degree of monetary accommodation.”
EXCHANGE RATE
“In the current environment of elevated uncertainty, the Governing Council will carefully assess incoming information, including developments in the exchange rate, with regard to its implications for the medium term inflation outlook.”
SIGNIFICANT UNCERTAINTY
“The strength of the recovery remains surrounded by signifcant uncertainty as it contunues to be highly dependent on the future evolution of the pandemic and the success of caontainemtn polices.”
STRONG REBOUND
“The incoming (data) since our last monetary policy meeting in July suggests a strong rebound in activity broadly in line with previous expectations.”
Global News DeskOur Standards: The Thomson Reuters Trust Principles.
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8e5a4cd8190b8d6c1a69c8e014abeef7 | https://www.reuters.com/article/us-ecb-policy-highlights/lagarde-comments-at-ecb-press-conference-idUSKCN24H240 | Lagarde comments at ECB press conference | Lagarde comments at ECB press conference
By Reuters Staff4 Min Read
FRANKFURT (Reuters) - The European Central Bank left policy unchanged on Thursday, as expected, scrutinising instead the effectiveness and any unwanted side-effects of its crisis-fighting measures.
Following are highlights of ECB President Christine Lagarde’s comments at a post-policy meeting press conference.
ACTIVITY RESUMES
Incoming information ... signals a resumption of euro area economic activity, although the level of activity remains well below the levels prevailing before the coronavirus pandemic, and the outlook remains highly uncertain.
UNEVEN, PARTIAL RECOVERY
Both high-frequency and survey indicators bottomed out in April and showed a significant, though uneven and partial, recovery in May and June alongside the ongoing containment of the virus and the associated easing of the lockdown measures.
JOB LOSSES WEIGH
Actual and expected job and income losses and the exceptionally elevated uncertainty about the evolution of the pandemic and the economic outlook continue to weigh on consumer spending and on business investment.
PRICE PRESSURE VERY SUBDUED
Headline inflation is being dampened by lower energy prices and price pressures are expected to remain very subdued on account of the sharp decline in real GDP growth and the associated significant increase in economic slack.
UNCERTAIN OUTLOOK
Uncertainty over the scale of the rebound remains high ... The balance of risks remain on the downside.
AMPLE STIMULUS
Ample monetary stimulus remains necessary to support the economic recovery and to safeguard medium-term price stability.
SLOWER PACE
We have slowed down a little bit the pace of purchases. Unless there were significant upside surprise (to economic outlook), our baseline remains we will use the entire envelope of PEPP.
NEXT GENERATION
We strongly welcome the European Commission’s EU next generation proposal. It will need to be firmly rooted in sound structural policies.
FRONTLOADED PEPP
We have front-loaded (PEPP) purchases - just to remind you, we have purchased over 360 billion euros in the first couple of months and that was at the end of June, effectively.
PEPP PLANS
It is effective, it is adequate and it is working. We have not discussed that (altering PEPP programme) ... We do not see a need to revisit.
GOOD PLACE
During this meeting of the Governing Council, we really spent a good deal of time looking at the economic circumstances ... And really, seeing the developments in the economy, we really felt that we were in a good place at the moment.
We have taken into account the risk of a second wave.
IMPROVED SENTIMENT
Financial market sentiment has improved.
Compared with the time of the PEPP announcement, euro investment-grade corporate spreads declined by more than 80 basis points while high-yield spreads declined by more than 250 basis points, so we see significant improvements. But having said that we are not exactly back to where were before the pandemic started.
For example, government bond yields are still higher in most jurisdictions than they were before the pandemic and this is highly relevant from a monetary policy stance.
PHASE OUT GRADUALLY
Hopefully, fiscal authorities - governments - will take it to heart to phase out gradually as the recovery takes root, because clearly we are in a timing dilemma where you really want to sustain the economy and support it and at the same time encourage its pick-up and hopefully the furlough schemes, the unemployment schemes, the part-time schemes that have been put in place will not stop short of the recovery, of the recovery already taking hold. That would be ideal.
Reporting by Larry KingOur Standards: The Thomson Reuters Trust Principles.
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171dc3d374f9bb6209acaa3b635184a5 | https://www.reuters.com/article/us-ecb-policy-lagarde-greece/lagarde-confident-ecb-will-eventually-buy-greek-debt-idUSKBN20012C | Lagarde confident ECB will eventually buy Greek debt | Lagarde confident ECB will eventually buy Greek debt
By Reuters Staff1 Min Read
FILE PHOTO: European Central Bank President Christine Lagarde testifies before the European Parliament's Economic and Monetary Affairs Committee in Brussels, Belgium February 6, 2020. REUTERS/Francois Lenoir/File Photo
FRANKFURT (Reuters) - The Greek economy continues to improve and chances are rising that the European Central Bank will eventually buy its debt under its asset purchase scheme, ECB President Christine Lagarde said on Thursday.
“If the situation continues to improve and based on the criteria that we apply to all those purchases, I’m fairly confident that Greek bonds will become eligible as well,” Lagarde told the European Parliament’s committee on economic affairs.
Greek bonds are currently ineligible for purchases as they are rated ‘junk’ by all major rating agencies, failing a key ECB criteria.
Reporting by Balazs Koranyi; Editing by Toby ChopraOur Standards: The Thomson Reuters Trust Principles.
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3409f19cc967e2945616fb2b7a4404d9 | https://www.reuters.com/article/us-ecb-policy-lagarde-inisght/no-phones-no-leaks-how-lagarde-is-making-her-mark-on-ecb-idUSKBN2040NO | No phones, no leaks: How Lagarde is making her mark on ECB | No phones, no leaks: How Lagarde is making her mark on ECB
By Balazs Koranyi, Francesco Canepa, Frank Siebelt6 Min Read
FRANKFURT (Reuters) - Gathered in a German mountain castle last November for an evening retreat that ended with a whiskey-tasting, rebel European Central Bank policymakers and Christine Lagarde, their newly confirmed president, made a pact.
Lagarde pledged to spend more time listening, and not to front-run decisions before policymakers had weighed in, as her predecessor Mario Draghi was often accused of doing.
In return, she asked for discipline from the Governing Council, the ECB’s top policymaking body, which comprises national central bank chiefs from the 19 euro zone countries and six Executive Board members, including Lagarde herself.
Governors had to stop trashing policy decisions once taken and keep internal disputes out of the media, presenting a common external front, 11 sources -- both critics and supporters of the ECB’s last, controversial stimulus package -- told Reuters.
A look at her first three months in office suggests Lagarde is using the entente of Schlosshotel Kronberg to make subtle but significant changes at Europe’s most powerful institution.
“The change is cultural but quite profound,” one of the sources, who asked not to be named, told Reuters. “Culture drives how we make decisions so it impacts policy.”
A greater emphasis on consensus has boosted the Governing Council’s role and given more voice to critics like Germany whose support may be vital whenever the next downturn comes, most of the sources, all with direct knowledge of the inner workings of the ECB, said.
But Lagarde has also made clear that Draghi’s disputed September stimulus package will not be revisited, and has kept on his key aides, architects of the plan.
In Europe, the role of ECB president is uniquely powerful: backed by the Governing Council, she or he is the face and voice of the institution, carrying its message to businesses and households and to world leaders.
Slideshow ( 4 images )
The ECB and Lagarde declined to comment. Draghi did not respond to a request for comment.
DISSENTERS
Meetings now start several hours earlier, leaving more time for deliberation and giving policymakers time to speak. Lagarde mostly presides over the debate, many of sources said, talking relatively little herself and keeping her own views quiet to foster open debate.
“When governors talk, she listens. That doesn’t sound like a big deal but Mario was often on his phone or iPad,” a second source said. “Madame Lagarde tells people to put their phones away.”
Meeting proposals are now handed to governors up to a week in advance, some of the sources added, not just hours before for fear of leaks.
These changes have shifted power away from the close circle of advisers that Draghi relied on and given Governing Council members more capacity to shape the debate, reducing the need to bring disagreements into the open.
All of the sources said they consider Draghi -- known as ‘the man who saved the euro’ -- a superb central banker. But his willingness to forego consensus -- as in September, when he pushed through the new stimulus package despite strong opposition -- annoyed some policymakers, prompting open dissent.
In another sign the peace is holding, Governing Council members have largely accepted Lagarde’s request not to publicly discuss the substance of the ECB’s wide-ranging policy review.
Slideshow ( 4 images )
Colleagues said Lagarde’s charm and approachability contrasted with the more aloof Draghi. She takes the staff elevators inside the ECB tower, asks people’s names and happily chats to colleagues.
But the former French finance minister is a ruthless timekeeper, keeping meetings on schedule and often reminding people to keep their messages short and to the point.
“In one (European Systemic Risk Board) meeting, when a speaker ran out of time and pleaded for leniency, she said sorry, we need to move on, and that was it,” a third source said.
POLITICALLY SAVVY
What didn’t change is also significant.
ECB Chief Economist Philip Lane continues to lead policy discussions, given the necessary space by Lagarde, a former International Monetary Fund chief and a lawyer by training who lacks the monetary policy expertise of her predecessors.
“Christine knows her limitations on monetary policy and knows that she needs to preside over the debate and not dominate it,” a fourth source said. “She is more presidential.”
Former colleagues at the IMF describe her as a tough negotiator whose strength was consensus-building.
Regarded as more politically adept than Draghi, Lagarde is said to be on cordial terms with European Commission chief Ursula von der Leyen and German Chancellor Angela Merkel. Their support could be vital as the ECB’s depleted policy arsenal puts the onus on governments to drive growth.
In her first speech in charge, Lagarde praised German ex-finance minister Wolfgang Schaeuble, a stern ECB critic.
“They listened to Draghi during the crisis but not so much when things were going well,” a fifth source said. “She’s on friendly terms with von der Leyen and essentially has an open line to her. Mario never had this with (former Commission chiefs) Barosso or Juncker.”
“The number of phone calls did not suddenly increase” between Lagarde and Merkel, a separate source in Berlin said, although the two have known each other for over a decade and have their conservative politics in common.
The strategic review Lagarde launched last month could be transformational for the ECB, bringing tweaks to the “below but close to 2%” inflation target and more tolerance for deviation, although at the risk of irritating the hawkish Germans.
But her desire for the ECB to take a bigger role in fighting climate change could bring early challenges to Lagarde, who joked in a meeting last year that Draghi “left big shoes to fill ... but I have high heels”.
Additional reporting by Andreas Rinke in Berlin and David Lawder in Washington; Editing by Catherine EvansOur Standards: The Thomson Reuters Trust Principles.
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b7e6c490f61b96c6ca191f78492fba53 | https://www.reuters.com/article/us-ecb-policy-libra/europe-should-ignore-treacherous-promises-of-facebooks-libra-currency-ecbs-mersch-idUSKCN1VN0H0 | Europe should ignore 'treacherous promises' of Facebook's Libra currency: ECB's Mersch | Europe should ignore 'treacherous promises' of Facebook's Libra currency: ECB's Mersch
By Reuters Staff2 Min Read
Slideshow ( 2 images )
FRANKFURT (Reuters) - Facebook's FB.O proposed Libra currency could undermine the European Central Bank's ability to set monetary policy and Europe should ignore its siren call of "treacherous promises" ECB board member Yves Mersch said on Monday.
Facebook announced Libra — a new digital coin backed by four official currencies and available to billions of social network users around the world — earlier this year, saying it hoped to launch next year.
“Depending on Libra’s level of acceptance and on the referencing of the euro in its reserve basket, it could reduce the ECB’s control over the euro, impair the monetary policy transmission mechanism by affecting the liquidity position of euro area banks, and undermine the single currency’s international role,” Mersch added.
Like regular currencies, Libra would be highly centralized, an “extremely concerning” setup since it is not backed by a lender of last resort and it is ultimately accountable to shareholders, who are not seen as repositories of public trust, Mersch added.
“It is scheduled for release in the first half of 2020 by the very same people who had to explain themselves in front of legislators in the United States and the European Union on the threats to our democracies resulting from their handling of personal data on their social media platform,” Mersch added.
Given these challenges, European regulatory and supervisory authorities need to assert jurisdiction over Libra and also need global cooperation to mitigate its risks.
“I sincerely hope that the people of Europe will not be tempted to leave behind the safety and soundness of established payment solutions and channels in favor of the beguiling but treacherous promises of Facebook’s siren call,” Mersch added.
Reporting by Balazs Koranyi; Editing by Peter Graff and Louise HeavensOur Standards: The Thomson Reuters Trust Principles.
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1cb1002520bf34cd6d6dc5c5edb7f75a | https://www.reuters.com/article/us-ecb-policy-loans/banks-borrow-record-1-31-trillion-euros-from-ecb-idUKKBN23P1JZ?edition-redirect=uk | Banks borrow record 1.31 trillion euros from ECB | Banks borrow record 1.31 trillion euros from ECB
By Reuters Staff2 Min Read
FILE PHOTO: The headquarter of the European Central Bank (ECB) is photographed during sunset, as the spread of the coronavirus disease (COVID-19) continues in Frankfurt, Germany, April 28, 2020. REUTERS/Kai Pfaffenbach/File Photo
FRANKFURT (Reuters) - Euro zone banks borrowed a record 1.31 trillion euros ($1.47 trillion) from the European Central Bank on Thursday, taking advantage of negative interest rates to meet growing demand for credit from companies hit by the deepest recession in living memory.
Launched six years ago, the ECB’s targeted-longer term refinancing operations (TLTROs) were redesigned earlier this year to help the economy cope with the coronavirus crisis and banks will get the cash for a rate as low as minus 1%.
At 1.31 trillion euros, take up is above expectations with most analysts predicting a figure just over 1 trillion euros for the three-year loans. Forecasts were generally in the 900 billion to 1.4 trillion euro range.
Although borrowing was more than twice as big as in any previous ECB facility, the net take is smaller as banks likely rolled over around 750 billion euros worth of earlier ECB funding to take advantage of record low rates.
The negative interest rate means banks that tapped the auction will earn 0.50% for one year with no strings attached and 1% if they simply refrain from shrinking their loan book.
The interest rates for the remainder of the loan’s duration will be as low as the ECB’s deposit facility, currently minus 0.5%.
The take-up increases the ECB’s balance sheet and bolsters its hopes that banks will continue to lend even as the economy shrinks by almost a tenth, helping firms survive until Europe is ready to fully reopen after the crisis.
Companies drew down their credit lines at the start of the pandemic. This is in sharp contrast with the bloc’s financial and debt crises a decade ago, when banks withheld credit to protect their balance sheets, exacerbating the downturn.
The ECB, which also supervises the bloc’s biggest banks, has now allowed lenders to run down their buffers without penalties, also in the hope they inducing lending.
Reporting by Balazs Koranyi; Editing by Francesco CanepaOur Standards: The Thomson Reuters Trust Principles.
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c8db3449850e9dc8041c5d4f3e3daf81 | https://www.reuters.com/article/us-ecb-policy-nowotny-idUSKBN17Y0MD | ECB should talk in June about 2018, eventual QE exit: Nowotny | ECB should talk in June about 2018, eventual QE exit: Nowotny
By Reuters Staff2 Min Read
European Central Bank (ECB) Governing Council member Ewald Nowotny addresses a news conference in Vienna, Austria, March 30, 2017. REUTERS/Heinz-Peter Bader
VIENNA (Reuters) - The European Central Bank will have to hold a discussion next month about its strategy for 2018 and the eventual exit from its ultra easy monetary policy, ECB Governing Council member Ewald Nowotny said in comments published on Tuesday.
The ECB last week said that prospects for the euro zone economy have improved but the time to withdraw support has not yet come, resisting pressure from countries like Germany to start winding down its 2.3 trillion euro asset-purchase program.
“At the (ECB) meeting in June we will have to discuss the future strategy, the strategy for the beginning of 2018,” Nowotny, who heads the Austrian National Bank, told newspaper Die Presse.
“It is clear that the (asset-purchasing) program has been and is a success. But on the other hand it is also clear that it must not become a permanent facility... That is the challenge we face,” he added. “The longer such a program continues, the more one must think about its consequences.”
The ECB’s next meeting is on June 8 and most analysts expect a change in the bank’s guidance and possibly the elimination of its bias for more policy easing. But no decision on actual policy steps is likely until September, at the earliest.
Reporting by Francois Murphy and Shadia Nasralla; Editing by Balazs KoranyiOur Standards: The Thomson Reuters Trust Principles.
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8e5e2fd136882ca34eaddb914da17457 | https://www.reuters.com/article/us-ecb-policy-outlook-idINKBN29C13Q?edition-redirect=in | Euro zone data point to fourth quarter GDP drop: ECB | Euro zone data point to fourth quarter GDP drop: ECB
By Reuters Staff1 Min Read
FILE PHOTO: The headquarters of the European Central Bank (ECB) are pictured in Frankfurt, Germany, July 8, 2020. REUTERS/Ralph Orlowski
FRANKFURT (Reuters) - Euro zone economic indicators point to an economic contraction in the final quarter of 2020, the European Central Bank said in a regular economic bulletin on Thursday.
“High-frequency indicators and the latest survey results are consistent with a fall in GDP in the final quarter of 2020,” the ECB said. “Survey indicators point to a renewed contraction in activity primarily affecting the services sector.”
The ECB said that the stat of vaccinations supports expectations for a rapid recovery but it will “take time” before widespread immunity is reached and the economy can return to normal.
Reporting by Balazs Koranyi; Editing by Francesco CanepaOur Standards: The Thomson Reuters Trust Principles.
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fd7b10bbd283f59d0c3452a7c1c174cb | https://www.reuters.com/article/us-ecb-policy-praet-idUSKCN0XQ05N?edition-redirect=uk | ECB's Praet: rate cut not expected in near future - paper | ECB's Praet: rate cut not expected in near future - paper
By Reuters Staff1 Min Read
European Central Bank Executive Board member Peter Praet gives a speech during a meeting organised by the Grand Conferences Catholiques in Brussels January 14, 2013. REUTERS/Eric Vidal
FRANKFURT (Reuters) - The European Central Bank would need the inflation outlook to worsen significantly for another rate cut, but pushing rates deeper into negative territory remains an option, Peter Praet, the bank’s chief economist told a Spanish newspaper.
“Deploying negative rates again in the future would require a distinct worsening of the inflation outlook,” Praet told Expansión in an interview. “I don’t think we’re going to see these conditions materializing in the near future.”
“Since negative rates were introduced in 2014, they have been very effective,” said Praet, who also sits on the ECB’s executive board. “So far, the positive effect of an improvement in financial conditions outweighs any negative effects that may be associated with banks’ earnings capacity or other financial stability risks.”
Struggling with ultra low inflation, the ECB cut its deposit rate to -0.4 percent in March to force cash parked with the bank into the real economy to generate growth and inflation.
Reporting by Balazs KoranyiOur Standards: The Thomson Reuters Trust Principles.
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c1463999812598b4f88db7c1106eb6b4 | https://www.reuters.com/article/us-ecb-policy-projections/ecb-sees-smaller-pandemic-recession-slow-inflation-recovery-idUSKBN26124V?il=0 | ECB sees smaller pandemic recession, slow inflation recovery | ECB sees smaller pandemic recession, slow inflation recovery
By Reuters Staff2 Min Read
FILE PHOTO: European Central Bank (ECB) President Christine Lagarde gestures as she addresses a news conference on the outcome of the meeting of the Governing Council, in Frankfurt, Germany, March 12, 2020. REUTERS/Kai Pfaffenbach
FRANKFURT (Reuters) - The European Central Bank expects the euro zone to suffer a smaller recession this year than earlier feared but inflation is still likely to undershoot its target for years to come, its updated economic projections showed on Thursday.
In what it describes as the baseline scenario, the ECB expects GDP to shrink by 8.0 percent this year, an improvement on the 8.7% contraction it expected in June, ECB President Christine Lagarde said.
But the recovery is also likely to be slower, with 2021 growth now seen at 5.0%, slightly below the 5.2% projected three months earlier.
The balance of risk to the economy remains skewed to the downside following the coronavirus pandemic, Lagarde said.
The ECB left its inflation projections almost unchanged, with an increase of 0.3% seen this year, rising to 1.0% in 2021 -- slightly more than it foresaw in June -- and 1.3% in 2022.
The following are the ECB’s quarterly growth and inflation projections through 2022. Figures in brackets are the ECB’s previous forecast from June.
Reporting by Balazs Koranyi; Editing by Catherine EvansOur Standards: The Thomson Reuters Trust Principles.
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c316699af53e21c325653a86a980dcfa | https://www.reuters.com/article/us-ecb-policy-vasiliauskas/ecb-has-room-to-move-away-from-bond-buys-vasiliauskas-idUSKBN1HW0WW | ECB has room to move away from bond buys: Vasiliauskas | ECB has room to move away from bond buys: Vasiliauskas
By Reuters Staff1 Min Read
FILE PHOTO - Lithuania's central bank governor Vitas Vasiliauskas speaks during the Euro Conference in Vilnius September 25, 2014. REUTERS/Ints Kalnins/File Photo
FRANKFURT (Reuters) - Solid growth provides room for the European Central Bank to transition away from bond purchases but normalization should be gradual and policy moves should be well telegraphed, Lithuanian policymaker Vitas Vasiliauskas said in a magazine article.
“The (bond) purchases will be ended gradually rather than abruptly, ensuring a smooth transition of sufficient length,” Vasiliauskas said in the Eurofi magazine.
“Any further policy steps will be well-discussed, data-based and gradual, providing sufficient time for markets to adjust,” he said. “We should be ready for an increase in market volatility, which has been exhibiting unnaturally low levels.”
Vasiliauskas said that the ECB Governing Council has already built an agenda for its next several steps, spanning an extended period of time.
Reporting by Balazs Koranyi; Editing by Francesco CanepaOur Standards: The Thomson Reuters Trust Principles.
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8d3778ecfbaa035ca930d7c414aa2784 | https://www.reuters.com/article/us-ecb-policy-villeroy/ecb-committed-to-keeping-interested-rates-low-villeroy-idUSKCN1PJ0LR | As dismal data flows, ECB policymakers promise caution | As dismal data flows, ECB policymakers promise caution
By Leigh Thomas, Balazs Koranyi3 Min Read
PARIS/FRANKFURT (Reuters) - European Central Bank policymakers promised on Friday to tread carefully in removing stimulus any further, just as two fresh surveys pointed to an even bigger-than-projected slowdown in the euro zone’s growth.
FILE PHOTO: European Central Bank policymaker Francois Villeroy de Galhau, who is also governor of the French central bank, attends the Paris Europlace International Financial Forum in Tokyo, Japan, November 19, 2018. REUTERS/Toru Hanai
ECB President Mario Draghi warned on Thursday that a dip in the 19-member euro zone’s economy could be deeper and longer than thought even a few weeks ago, comments widely seen as signaling a delay in the bank’s first interest rate hike.
Indeed, a key German business morale indicator fell for the fifth straight month in January, while the ECB’s own survey of professional forecasters pointed to sharply lower growth and inflation.
“We remain committed to maintaining interest rates very low, which is good for the economy,” French central bank chief Francois Villeroy de Galhau told France 2 television on Friday.
“Progressively we are withdrawing monetary stimulus ... but it is very progressive and depends on improvement in the economy. We’ll take the time it takes,” said Villeroy, widely seen as a leading candidate to take over from Draghi when his mandate expires in November.
The ECB ended its 2.6 trillion euro ($3 trillion) crisis-era asset purchase scheme last month and said it would keep rates at a record low ‘through’ the summer, signaling a rate hike late in the year.
SLOWDOWN
But markets have long given up on such a move, pricing a rise only for mid-2020 as the euro zone economy is suffering its biggest slowdown in more than half a decade, with no recovery in sight.
“The slowdown has surprised us ... we have to be very careful to monitor the data,” ECB board member Benoit Coeure told Bloomberg television, arguing that the jury was still out on whether this growth dip is temporary.
The ECB’s quarterly survey, a key element of Thursday’s policy deliberations, put growth at 1.5 percent this year, well below a previous projection of 1.8 percent.
Inflation, the ECB’s primary mandate, is now seen dipping to 1.5 percent and only rising to 1.8 percent in the ‘longer’ term, suggesting that confidence in the central bank’s ability to reach its target of almost 2 percent is dipping.
Germany, France and Italy, the euro zone’s biggest economies, barely grew last quarter and the Ifo warned that 2019 also started on a weak note.
“Disquiet is growing among German businesses,” Ifo President Clemens Fuest said in a statement. “The German economy is experiencing a downturn.”
Economists now widely expect the ECB to push out the timing of the first rate hike by adjusting its interest rate guidance, perhaps as soon as March.
It is also seen providing banks with more long-term loans to roll over previous facilities and shore up confidence in the financial sector.
“We could consider the provision liquidity and credit to banks, it’s part of our toolbox,” Villeroy said later in an interview with Bloomberg TV.
Additional reporting by Joseph Nasr in Berlin; editing by Richard LoughOur Standards: The Thomson Reuters Trust Principles.
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3716ab8eae1d0c3f03d67984e3e70feb | https://www.reuters.com/article/us-ecb-policy-villeroy/no-risk-of-overheating-in-euro-zone-ecbs-villeroy-de-galhau-idUSKBN2AM2BI?edition-redirect=uk | No risk of overheating in euro zone - ECB's Villeroy de Galhau | No risk of overheating in euro zone - ECB's Villeroy de Galhau
By Reuters Staff1 Min Read
FILE PHOTO: Bank of France Governor Francois Villeroy de Galhau arrives for the G20 meeting during the IMF and World Bank's 2019 Annual Fall Meetings of finance ministers and bank governors, in Washington, October 18, 2019. REUTERS/Mike Theiler
PARIS (Reuters) - There is no risk of overheating in the euro zone economy and no risk of a lasting pick up of inflation, European Central Bank policymaker François Villeroy de Galhau said on Monday.
Villeroy, who is also the Bank of France governor, told BFM Business TV the ECB was “monitoring” borrowing costs, echoing earlier comments from ECB chief Christine Lagarde.
“Financing conditions remain very favorable (...) we’ll see to it that stays that way”, Villeroy said.
Reporting by Benoit Van Overstraeten and Jean-Stephane Brosse; Editing by Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.
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c0b8115c118faed9f459f121b1ee1071 | https://www.reuters.com/article/us-ecb-policy/ecb-keeps-generous-stimulus-unchanged-in-lagardes-first-meeting-idUSKBN1YF2TQ?il=0 | 'Wise owl' Lagarde outlines broad ECB review, pledges new style | 'Wise owl' Lagarde outlines broad ECB review, pledges new style
By Balazs Koranyi, Francesco Canepa5 Min Read
FRANKFURT (Reuters) - Christine Lagarde struck a more upbeat tone on the economy in her first news conference as head of the European Central Bank on Thursday and promised a new style of leadership as she outlined a sweeping one-year review of the bank’s workings.
With the euro zone economy barely expanding, the former IMF chief firmly embraced the ECB’s easy money policy but suggested that the worst of the bloc’s slowdown may now over and an often-discussed but elusive recovery could now begin.
Lagarde also tackled head-on the keen anticipation in markets and media about how she would follow on from predecessor Mario Draghi, a technocrat who was hailed as one of the world’s best communicators with a deep understanding of monetary policy.
“I will have my own style. Don’t over-interpret, don’t second-guess, don’t cross-reference. I am going to be myself and therefore probably different,” she told reporters in what she billed as a short preamble before taking questions.
Rejecting the traditional labels of the central banking world, Lagarde said she was neither a policy hawk nor a dove, but rather an owl, who will use her wisdom to create the broadest possible consensus to heal a recent rift in the Governing Council.
“Lagarde’s clear desire to seek consensus could be a sign that the hawks will be able to affect policy decisions somewhat more than during Draghi’s tenure,” Kjersti Haugland, an economist at DNB said.
Related CoverageECB keeps policy unchanged with door still open to more stimulusIMF fully supports ECB's decision to maintain strong monetary accommodationSee more stories
REVIEW
The planned review of how the ECB does business would start in January and aim to conclude by the end of the year, drawing from a wide range of voices, including those from civil society and academia.
“It will aim not just preaching the gospel we think we master but also listening ... There is no preconceived landing zone at this point in time,” she added of the exercise, which mirrors a similar endeavor under way in the United States.
U.S. Federal Reserve chief Jerome Powell has also struck a much more consumer-friendly tone since taking over last year although markets only expect a minor change in how it defines its own inflation target.
While the ECB’s own review will also center on the definition of the target, Lagarde said it would also weigh fundamental issues including how technology and climate change affect policy, and how to address rising inequalities in developed economies.
The ECB targets inflation at just below 2% but has undershot this mark since 2013 and some argue that fundamental factors that guide inflation have changed, keeping a permanent lid on prices.
To take pressure off the bank, some have argued for more flexibility around the target, giving the ECB leeway since it has already exhausted conventional policy instruments and relies of untested tools such as bond purchases and ultra cheap loans to banks.
Slideshow ( 3 images )
NOT THE AIM
Financial analysts see the ECB on hold throughout next year, a view that was strengthened by the Fed signaling on Wednesday that it was unlikely to touch U.S. interest rates in 2020.
Lagarde’s first policy decision and the bank’s new staff projections did nothing to dispel those expectations.
Slideshow ( 3 images )
The ECB held its deposit rate at a record low minus 0.5% while keeping the option of another rate cut firmly on the table. It also promised low interest rates for an extended period and kept the pace of bond purchases, aimed at lowering borrowing costs, steady at 20 billion euros a month.
The biggest change was arguably a tweak to the ECB’s guidance on growth, suggesting that risks were less pronounced, mostly as trade tensions appear to be easing and the UK election could bring clarity on Brexit.
The new staff projections were also little changed, even if initial 2022 figures showed that inflation would still undershoot the ECB’s target.
Still, both inflation and growth were expected to trend upward, indicating that the direction was good even if the absolute levels were not.
For 2022 inflation was seen 1.6%, with price growth hitting 1.7% in the final quarter of the year.
“It is certainly directionally good. But is it the aim that we pursue? No.”
Reporting by Balazs Koranyi; Writing by Mark John; Editing by Catherine Evans and Toby ChopraOur Standards: The Thomson Reuters Trust Principles.
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cd0a517add78e8ae487d66bcd04a0ed6 | https://www.reuters.com/article/us-ecb-policy/ecb-pledges-more-easing-and-ponders-inflation-goal-review-idUSKCN1UJ33E?il=0 | ECB pledges more easing and ponders inflation goal review | ECB pledges more easing and ponders inflation goal review
By Francesco Canepa, Balazs Koranyi4 Min Read
FRANKFURT (Reuters) - European Central Bank President Mario Draghi all but pledged to ease policy further as the growth outlook deteriorates and even hinted on Thursday at a reinterpretation of the ECB’s inflation target, the cornerstone of its entire policy framework.
Officials told Reuters after the meeting that an interest rate cut in September appeared certain, while government bond purchases and a revamped policy message were also likely.
Euro zone inflation has undershot the ECB’s target for the past six years -- most of Draghi’s eight-year term -- and he said the outlook looked bleak as a global trade war hit Europe’s export-focused manufacturing sector.
That threatened to infect a so-far resilient domestic economy that had not yet fully recovered from the bloc’s debt crisis.
“This outlook is getting worse and worse, and it is getting worse and worse in manufacturing and getting worse and worse in countries where manufacturing is very important,” Draghi, who will step down on Oct. 31, told a news conference.
The ECB has targeted an inflation rate of ‘close to but below’ 2% for 16 years but Draghi said that, after the prolonged shortfall, the target was considered to be symmetric - or to extend on both sides of 2% - and there would be no cap at 2%.
“WE DON’T LIKE WHAT WE SEE”
Related CoverageECB policymakers see rate cut as done deal in September package: sourcesDraghi comments at ECB press conference
He said some policymakers were even advocating a wholesale change to the inflation target for the first time since 2003.
“We don’t like what we see on the inflation front and symmetry means basically there is no 2% cap,” Draghi said.
A source said policymakers had attended a policy seminar this month where they were presented with the option of targeting an average inflation rate over time.
Allowing inflation to run above 2% for some time to compensate for missing the target could be seen as a de facto increase to the target, a move some policymakers warned against at June’s ECB meeting, according to published minutes.
After the bank kept rates unchanged on Thursday, Draghi said it was devising a stimulus package, possibly for September.
In a precursor to a rate cut, the ECB said it saw rates at present or lower levels through mid-2020, a subtle change to its previous pledge to keep rates unchanged through next June.
Slideshow ( 9 images )
Draghi added that the ECB could also compensate banks for even lower rates by offering a multi-tier deposit rate. That would shield them from what is effectively a charge imposed on excess reserves they hold securely at the ECB.
Of those tools, a cut in the ECB’s deposit rate had the broadest consensus, while a tiering system still left some governors unconvinced, according to sources who spoke on condition of anonymity.
Slideshow ( 9 images )
SLOWDOWN OR RECESSION?
They added that a resumption of the ECB’s 2.6 trillion euro ($2.90 trillion) bond-buying program was also a possible option, with more government bonds the first item on the shopping list.
The case for ECB stimulus is supported by weak economic data, particularly in foreign trade and manufacturing, the engine of the euro zone economy’s recent growth run.
“There is far and wide nothing to be seen of the second-half recovery hoped for in many places,” Commerzbank economist Joerg Kraemer said. “Germany is in a grey area between a marked growth slowdown and a recession.”
But whichever measures the ECB opts for will come with complications and have only limited potency, since the bank has already exhausted much of its firepower in the wake of the euro zone debt crisis that peaked in 2012.
While policymakers say they have leeway to adjust their rules, critics of the bank’s asset purchases, who have already launched several legal challenges, would be almost certain to take the ECB back to court.
“It is doubtful that this will succeed in bringing the inflation rate in the euro zone close to 2%,” said Isabel Schnabel, a member of the German government’s economic advisory council. “At the same time, the risks to financial stability continue to rise.”
Additional reporting by Michelle Martin and Frank Siebelt; Writing by Mark John; Editing by Catherine Evans and Kevin LiffeyOur Standards: The Thomson Reuters Trust Principles.
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276a2d91acabce38e4e778ead4b8cc58 | https://www.reuters.com/article/us-ecb-policy/ecb-promises-stimulus-buys-as-long-as-necessary-idUSKCN1VW2SN | Draghi ties Lagarde's hands with promise of indefinite stimulus | Draghi ties Lagarde's hands with promise of indefinite stimulus
By Balazs Koranyi, Francesco Canepa6 Min Read
FRANKFURT (Reuters) - European Central Bank chief Mario Draghi pledged indefinite stimulus on Thursday to revive an ailing euro zone economy, tying the hands of his successor for years to come and sparking an immediate conflict with U.S. President Donald Trump.
As Draghi’s eight-year mandate nears its close, the ECB cut rates deeper into negative territory and promised bond purchases with no end-date to push borrowing costs even lower, hoping to kick-start activity nearly a decade after the bloc’s debt crisis.
The bigger-than-expected stimulus will increase pressure on the U.S. Federal Reserve and Bank of Japan to ease policy next week to support a world economy increasingly characterized by low growth and protectionist threats to free trade.
“You remember me saying that all instruments were on the table, ready to be used. Well, today we did it,” Draghi told a news conference.
Yet there were doubts, even within the ECB itself, as to whether the latest measures -- most of the few remaining tools in its monetary policy arsenal -- would be enough to stoke a euro zone recovery in the face of a U.S.-China trade war and possible disruption from Brexit.
Draghi faced faced pushback from the representatives of Germany and France as well as at least one of his own board members when he pushed for resuming the ECB’s bond-buying program, three sources told Reuters.
Thursday’s moves also infuriated Trump, who just this week called on the U.S. Fed to adopt a negative-rate policy.
Related CoverageECB action, hit by Trump as 'hurting U.S. exports,' ups pressure on FedECB's tiered rate is cold comfort for euro zone banksSee more stories
“They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.... And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!” Trump tweeted.
LAGARDE CONSTRAINED
A 10 basis point cut in the ECB’s deposit rate to -0.5% was fully expected but the revived bond purchases exceeded many expectations because they are set to run until “shortly before” the ECB raises interest rates.
Given that markets do not expect rates to rise for nearly a decade, such a formulation suggests that purchases could go on for years, possibly through most of Christine Lagarde’s term leading the bank.
“Today’s decisions have anchored and enshrined the Draghi legacy in future ECB decisions,” ING economist Carsten Brzeski said.
“Whatever it takes has just been extended by as long as it takes,” Brzeski said, referring to the 2012 speech in which Draghi promised to do “whatever it takes” to save the euro, a bold move credited with holding the crisis-hit bloc together.
European Central Bank (ECB) President Mario Draghi attends a news conference on the outcome of the meeting of the Governing Council, in Frankfurt, Germany, September 12, 2019. REUTERS/Ralph Orlowski
While conservative ECB policymakers had spoken out against more bond purchases in recent weeks, the decision suggests some of them eventually agreed, giving Draghi a majority for what is probably his last major policy move.
Underlining the need for action, the ECB cut its growth projections for this year and next, predicting growth at just above 1%, below what is considered its natural potential.
The ECB’s decision triggered a rally in euro zone bonds that will cut the cost of borrowing across the 19 countries that use the euro. The single currency itself firmed a touch after wild price swings during Draghi’s news conference.
EFFECTIVE?
A simple rate cut would have increased the cost to commercial banks of parking their more than 1 trillion euros worth of excess reserves safely at the ECB, a dangerous move since banks transmit the bulk of its policy to the real economy.
To offset that burden, the ECB promised even cheaper long-term funding and said it would introduce a multi-tier deposit rate to shield them from some of the charge. That could leave lenders about 2 billions of euros a year better off than previously, according to some estimates.
Yet the size and design of the scheme underwhelmed bankers whose own loans are being offered at rock-bottom rates.
“Even if the tiered interest rate introduced today provides some relief, European banks will continue to have to pay billions to the ECB every year as some sort of penalty charge tax,” Hans-Walter Peters, president of the German banking association, said.
Euro zone stocks were little changed on Thursday, however, highlighting investors’ doubts about the effectiveness of ECB policy, which can only prop up domestic confidence, not deliver a U.S.-China trade deal or seal a Brexit agreement.
Indeed, Draghi stepped up his rhetoric in calling for governments to spend their way out of a slowdown, singling out Germany, which is obsessed with running a balanced budget.
“Now it is high time for the fiscal policy to take charge,” Draghi said. “There was unanimity, namely that fiscal policy should become the main instrument.”
Draghi has called for years for governments to do more to stimulate growth.
With the ECB’s balance sheet already bloated and rates at record lows, analysts also questioned the effectiveness of more stimulus and suggested it could even work against the ECB.
“The key risk is that rate cuts could even backfire. Deeply negative interest rates could push up saving rates -- see the surge in German savings, for instance,” Shweta Singh, a managing director at TS Lombard, said.
“Crucially, there may be much less scope this time for the euro to edge lower and thus boost inflation expectations.”
Additional reporting by Michelle Martin and Tom Sims; Writing by Mark John; Editing by Catherine EvansOur Standards: The Thomson Reuters Trust Principles.
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d46fd7c4d8ad01bfaa8a4c58d815aad7 | https://www.reuters.com/article/us-ecb-policy/ecb-sees-intensifying-risk-from-tariffs-protectionism-idUSKBN1KU0V4 | ECB sees intensifying risk from tariffs, protectionism | ECB sees intensifying risk from tariffs, protectionism
By Reuters Staff2 Min Read
FILE PHOTO: European Union flags flutter outside the European Central Bank headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
FRANKFURT (Reuters) - Risks to global growth are growing as the risk of protectionism and the threat of higher U.S. tariffs sap confidence, the European Central Bank said in a regular economic bulletin on Thursday.
“Downside risks to the global economy have intensified amid actions and threats regarding trade tariff increases by the United States and possible retaliation by the affected countries,” the ECB said in an assessment, which is largely consistent with its view in its July 26 policy statement.
The ECB added that if all the threatened measures were to be implemented, the average U.S. tariff rate would rise to levels not seen in the last 50 years.
At its meeting two weeks ago, the ECB kept policy unchanged, staying on course to end a 2.6 trillion-euro ($3.01 trillion)bond purchase scheme by the close of the year and to raise rates for the first time since the euro zone debt crisis in the autumn of 2019.
It added that even as external risks are mounting, domestic growth appears to be robust and near-term indicators point to a solid and broad-based expansion.
Reporting by Balazs Koranyi, editing by Larry KingOur Standards: The Thomson Reuters Trust Principles.
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caef241f075d4236ace4b407eb549f35 | https://www.reuters.com/article/us-ecb-policy/ecb-takes-more-upbeat-view-in-december-meetings-accounts-idUSKBN1ZF1L4 | ECB takes more upbeat view in December meetings: accounts | ECB takes more upbeat view in December meetings: accounts
By Reuters Staff3 Min Read
FRANKFURT (Reuters) - European Central Bank policymakers took a more upbeat view on economic developments in their December 12 meeting but continued to see an abundance of risk that warrant ultra-easy policies, the accounts of the meeting showed on Thursday.
FILE PHOTO: A man walks towards the European Central Bank (ECB) headquarters in Frankfurt, Germany, July 25, 2019. REUTERS/Ralph Orlowski
The bank left policy unchanged in Christine Lagarde’s first meeting as the bank’s president but noted that political risk may be ebbing, inflation pressures seem to be building and the bloc’s vast manufacturing sector was showing signs of bottoming out, all suggesting that the worst of the recent slowdown by be over.
The ECB has kept money taps wide open for years, trying to boost growth and inflation as the bloc is still working to overcome the lingering effects of a debt crisis that started nearly a decade ago and came close to tearing apart the currency union.
“Incoming data since the last monetary policy meeting pointed to continued weak but stabilizing euro area growth dynamics,” the accounts of the meeting quoted ECB chief economist Philip Lane as saying. “Measures of underlying inflation remain generally subdued, although there were some indications of a mild increase.”
The 13 page document however made only a brief mention of the ECB’s upcoming policy review, a one-year deep dive that is likely to set course for the bank over much of the next decade and dominates investors’ interest.
“It was also suggested that some broad guidance be communicated about the forthcoming strategy review, including the likely timeline, although it was generally seen as advisable to refrain from public discussion on the strategy prior to the envisaged launch of the review,” the ECB said.
The review, which is expected to provide clearer definition of the inflation target and the ECB’s tolerance for any deviation from it has been in the focus since Lagarde took over Nov 1 and is expected to dominate ECB-related newsflow.
Batting back lenders complaints that negative rates are hurting the bank sectors, policymakers argued that the net effect of ECB policies remained positive.
While negative rates were compressing net margins, lending volumes were higher and stronger economic growth kept provisioning levels down.
The ECB added that while interest rates on much of banks’ deposit funding could not go below zero, an increasing number of corporate deposits were remunerated at negative rates, also helping margins.
The ECB will next meet on Jan 23, when it is expected to kick off the policy review.
With stimulus already provided through bond buys, negative rates and ultra cheap bank loans, the ECB is expected to keep policy unchanged for most of this year, especially since any big change during a policy review is likely to be controversial.
Reporting by Balazs Koranyi; Editing by Francesco CanepaOur Standards: The Thomson Reuters Trust Principles.
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ca90014c7baaeb0242e09b5ea2cd0fff | https://www.reuters.com/article/us-ecb-policy/ecbs-de-guindos-says-british-election-results-eliminate-uncertainty-idUSKBN1YH0TG | British election results are positive in short-term, ECB's De Guindos says | British election results are positive in short-term, ECB's De Guindos says
By Jesús Aguado, Clara-Laeila Laudette2 Min Read
European Central Bank (ECB) Vice-President Luis de Guindos attends a news conference on the outcome of the meeting of the Governing Council, in Frankfurt, Germany, October 24, 2019. REUTERS/Ralph Orlowski
MADRID (Reuters) - The results of British elections are positive in the short term as they eliminate uncertainty regarding Britain’s exit process from the European Union, the European Central Bank’s Vice-president Luis de Guindos said on Friday.
De Guindos made the comments after Prime Minister Boris Johnson´s resounding election victory on Thursday which will allow him to end three years of political paralysis and take Britain out of the European Union within weeks.
“The results of the elections in Great Britain are positive because they eliminate uncertainty in the short term,” De Guindos said at a financial event in the Spanish capital.
On Friday, shares already trading at record highs piled on the gains and the pound soared as a last-gasp Sino-U.S. trade deal and a thumping election win by Britain’s Conservative Party cleared two of the darkest clouds on the global investment horizon.
“We know perfectly well that on the 31st January the United Kingdom will leave the union - this is good in terms of uncertainty, but also hails a new period, one which will not be easy.”
“It will not be easy because commerce rules will have to be renegotiated,” De Guindos said.
Guindos also said the slowdown in the euro area had bottomed out amid signs of stabilization in the EU’s economy as the scenario of a disorderly Brexit or a trade war between China and the United States had not materialized.
De Guindos made those comments a day after Christine Lagarde struck a more upbeat tone on the economy in her first news conference as head of the ECB.
Reporting By Jesús Aguado and Clara-Laeila Laudette; Editing by Angus MacSwanOur Standards: The Thomson Reuters Trust Principles.
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66a2f22c190ed2a691a627d8a649e12c | https://www.reuters.com/article/us-ecb-policy/ecbs-draghi-denied-grand-finale-as-economy-weakens-and-dissent-grows-idUSKBN1X22Q5 | 'Never give up!' Draghi tells Lagarde as he leaves ECB | 'Never give up!' Draghi tells Lagarde as he leaves ECB
By Francesco Canepa, Balazs Koranyi4 Min Read
FRANKFURT (Reuters) - European Central Bank President Mario Draghi told his successor on Thursday to “never give up” on propping up the euro zone economy in the face of a worsening outlook and little help from governments.
At the last press conference of his eight-year tenure, the man credited with saving the euro from collapsing kept the door open to even more easy money, days before he hands the reins over to Christine Lagarde on Oct 31.
With inflation languishing at less than half the ECB’s target and an unprecedented revolt against his brand of monetary stimulus, it was hardly a grand finale for Draghi, whose 2012 pledge to do “whatever it takes” to save the euro quashed speculation against the bloc’s most heavily indebted countries.
Draghi refused to give specific advice to Lagarde but said his legacy was defined by a single-minded quest to boost price growth in an ailing and divided currency bloc.
“This is part of our legacy: never give up!” Draghi said.
Under him, the ECB abandoned its roots in German monetary orthodoxy, pushing the interest on bank deposits well below zero and buying 2.6 trillion euro worth of assets, mostly government bonds.
Draghi has credited this policy with averting deflation in the euro zone and helping create 11 million jobs in the bloc.
Related CoverageECB's Draghi welcomes German nominee SchnabelHighlights: Draghi comments at ECB press conference
But more than a third of the ECB’s Governing Council opposed a decision to resume bond purchases at the September meeting, and policymakers from the Netherlands, France and Germany took the unusual step of making their disagreement public.
And it’s not just a few prominent hawks who question the wisdom of even more bond buys.
Some 95% of respondents in a Reuters poll of analysts said the stimulus package would not significantly help in bringing inflation back to the ECB’s target of just under 2%.
The ECB made no new policy moves on Thursday, having decided in September to restart bond purchases at a pace of 20 billion euros per month while also cutting its deposit rate to -0.5% and keeping the door open to further reductions.
Despite weak growth across the euro zone, Draghi insisted the benefits of loose money policy far outweighed the risks and rejected the suggestion that the public spat had tainted his legacy.
“Every jurisdiction has disagreements when monetary policy decisions come to be discussed,” Draghi said.
Slideshow ( 9 images )
He added dissenters seemed to bury the hatchet at Thursday’s meeting, with one calling for unity and another saying that “bygones are bygones”.
A source at the meeting said the climate was more consensual than in September, with dissenters refraining from bringing up their concerns again when the policy proposal was made.
Slideshow ( 9 images )
TURMOIL WILL CONTINUE
Yet turmoil within the ECB was likely to persist, and Lagarde will have to deal with objections that the ultra-easy policy hurts savers, squeezes banks and pension funds and inflates financial bubbles while doing little for inflation.
This was just 0.8% in September, a far cry from the ECB’s target of below but close to 2%.
This goal may change under Lagarde, who has pledged to review the ECB’s strategy, following in the footsteps of the U.S. Federal Reserve.
“She may wait until a review of the ECB’s monetary policy has been conducted in order to decide if Draghi’s motto remains valid,” said Rene Albrecht, an analyst at DZ Bank.
The problem for the ECB is that some of the major factors depressing prices are outside its control.
These range from demographic and technological changes to the euro zone’s reliance on exports, in particular by German manufacturers, which leaves it bearing the brunt of a global trade war.
With the ECB’s firepower now largely spent, Draghi and his successor are likely to continue urging governments that are running surpluses, such as Germany and the Netherlands, to invest more to generate economic growth at home.
But the latest budget figures showing only a modest expansion suggest these calls are likely to go unheard for now, leaving the burden on the ECB.
“Monetary policy will continue to do its job,” Draghi said.
Writing by Mark John; Editing by Catherine Evans and Hugh LawsonOur Standards: The Thomson Reuters Trust Principles.
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4f3e87383de2bfff9a97c239115f6928 | https://www.reuters.com/article/us-ecb-policy/ecbs-makuch-board-discussions-moving-to-rates-from-asset-buying-idUSKBN1ED1IT | ECB policymakers talk life after QE as economy expands | ECB policymakers talk life after QE as economy expands
By Reuters Staff3 Min Read
BRATISLAVA/TALLINN (Reuters) - European Central Bank policymakers are beginning to think of how to support the euro zone economy after their 2.55 trillion euro quantitative easing (QE) scheme comes to an end and as strong growth reduces the need for aggressive stimulus.
The European Central Bank (ECB) headquarters are pictured in Frankfurt, Germany December 14, 2017. REUTERS/Ralph Orlowski
The ECB has pledged to continue buying bonds at least until September. But with economic growth in the euro zone on its best run in a decade and inflation comfortably above 1 percent, it is widely expected to wind down the programme thereafter.
Cementing such expectations, the central bank governors of Estonia, Slovakia and Germany all discussed on Tuesday the need to shift the debate from bond purchases to other tools such as interest rates.
“Discussions are more and more shifting from asset purchases to possible future use of interest rates to regulate the economy,” Slovakia’s representative on the ECB’s Governing Council, Jozef Makuch, said in Bratislava.
The ECB has kept its deposit rate below zero since 2014, effectively charging banks on their idle cash to spur them to lend more.
It has also pledged to keep rates at their present level “well past” the end of its net bond buying and reinvest the proceeds of debt that matures “for an extended period of time”.
This so-called “forward guidance” has been credited with capping medium-term borrowing costs for euro zone governments, companies and households and is one of the policy tools the ECB can use after QE ends.
“Moving to a communication which draws attention to the multi-faceted elements of monetary policy including interest rates is probably something that we should consider over the coming months,” Estonia’s central bank governor Ardo Hansson said in Tallinn.
In remarks published on Tuesday, the head of Germany’s Bundesbank, Jens Weidmann, reiterated his view that the ECB should have set a clear end date for QE and that its policy would remain easy even after that in view of the huge stock of bonds it already owns.
So far such voices have been given short shrift during the ECB’s policy deliberations, with sources telling Reuters that policymakers calling for a change in the message were outnumbered at last Thursday’s meeting.
Reporting by Tatiana Jancarikova and David Mardiste; Writing by Francesco Canepa in Frankfurt and Robert Muller in Prague; Editing by John Stonestreet and Hugh LawsonOur Standards: The Thomson Reuters Trust Principles.
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