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The Basel Committee on Banking Supervision, a global forum for banking regulators, has revised its rulebook to better address risks from climate change, the rise of non-banks, and digitalization of finance. The new standard emphasizes the responsibility of a bank's board in ensuring sustainability and introduces a new definition of climate-related financial risks. The committee will also issue new guidelines for banks on managing risks from clients and other counterparties. Regulators are focusing on the rapidly growing non-bank financial sector, calling for better data on risks and links to lenders. The committee will publish a report on the digitalization of finance and its implications for regulation. "The revised standard reflects changes to promote operational resilience, reinforce corporate governance and risk management practices, and address new and emerging risks," said the committee.

 

Reuters

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A global insurance coalition, the Net Zero Insurance Alliance (NZIA), has been disbanded and replaced by the Forum for Insurance Transition to Net Zero (FIT) in response to companies leaving over allegations of collusion by Republican politicians in the United States. The move comes as Republican-led attacks on environmental initiatives dilute efforts to tackle climate change. The FIT will focus on sustainable insurance practices and engagement with companies in different sectors. The NZIA lost over half its members, including AXA and Lloyd's of London, after Republican officials sought information about insurers' membership. The FIT is launching with 46 organizations, including Aviva and Generali, and will be supported by a legal team. Regulators from various countries are also involved. Other UN-backed financial coalitions are also trying to prevent member departures.

 

Insurance Journal

Reuters

A U.S. bank regulator has decided not to impose stricter oversight on asset managers with significant investments in banks. The Federal Deposit Insurance Corporation (FDIC) postponed votes on two competing proposals that would have allowed for more scrutiny on asset managers, as neither proposal had majority backing. However, officials plan to refine the proposals and continue discussions on oversight of asset managers with large bank stakes. "The matter merited more attention," said agency officials.

 

Reuters

U.S. issuers and other firms anticipate that the Securities and Exchange Commission (SEC) will reject their applications to launch exchange-traded funds (ETFs) tied to the price of ether. Recent meetings between issuers and the SEC have reportedly been one-sided, with agency staff not discussing substantive details about the proposed products, indicating that the filings will likely be denied. This would be a setback for the crypto industry, which had hoped that spot bitcoin ETFs would pave the way for other cryptocurrencies.

 

Cointelegraph

Yahoo Finance

DHL Express has agreed to pay $8.7m to settle a race discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC). The lawsuit accused DHL's U.S. arm of assigning undesirable delivery routes and heavier lifting to Black employees. The settlement also requires DHL to review and revamp its work assignment policies and internal worker complaint procedures. The EEOC alleged that white drivers who objected to routes in high-crime neighborhoods were often replaced by Black employees, who were more likely to witness crimes. Additionally, Black workers were reportedly given more physically demanding tasks compared to their white counterparts. The settlement, the largest announced by the EEOC since March 2022, will benefit 83 Black workers who participated in the lawsuit. DHL denied any wrongdoing and stated that it does not tolerate discrimination. As part of the settlement, DHL will undergo monitoring by former EEOC commissioner Leslie Silverman for four years.

 

Reuters

TikTok is preparing for a legal fight against a U.S. law that would require the social media platform to sever ties with its China-based parent company or face a ban. The law, signed by President Joe Biden, has raised tensions between the U.S. and China, with both countries vowing to protect their interests. TikTok, with 170 million American users, plans to challenge the law, arguing that it infringes on the free speech rights of its users. Chinese authorities are unlikely to allow a sale of TikTok, as it could be seen as surrendering to Washington. The legislation could also pave the way for the U.S. to target other China-related apps. If TikTok does not prevail in the legal challenge, the Chinese leadership will have to decide whether to permit or prohibit the sale. Any process of selling TikTok's U.S. business would be expected to be challenging and messy, with uncertainty surrounding the fate of the TikTok algorithm. Experts believe that Chinese authorities would block any sale of the algorithm under export regulations.

 

U.S. News

The Federal Trade Commission (FTC) alleges that top Amazon executives, including founder Jeff Bezos and chief executive Andy Jassy, erased text messages that the agency could have used in its antitrust case against the retail giant. Between April 2019 and May 2022, Mr Bezos, Mr Jassy and others communicated using the encrypted communications platform Signal, the FTC said Thursday in a court filing, and used a feature so that messages weren’t retained. Executives used the encrypted communications app after Bezos disclosed in 2019 that his phone had been hacked and alleged the National Enquirer tabloid sought to publish his intimate photos and texts. The court filing seeks information about what Amazon executives conveyed to employees about when to communicate via Signal and its instructions on retaining messages.

 

Bloomberg

Crypto firm Consensys has filed a lawsuit against the Securities and Exchange Commission (SEC) regarding the regulation of the Ethereum blockchain. Consensys alleges that the regulation is unfair and is hindering innovation in the crypto industry. The company is seeking to challenge the SEC's authority over the Ethereum blockchain and establish a more favorable regulatory framework. A Consensys spokesperson said: "We believe that the SEC's actions are not only detrimental to Consensys, but also to the entire crypto industry."

 

Bloomberg

Reuters

The U.S. has imposed sanctions on more than a dozen Iranian ships, people, and companies associated with the country's drone program. This move comes as a response to Iran's attack on Israel and its support for proxy militant groups in the Middle East. The Treasury Department has targeted Sahara Thunder, a front company for Iran's military that helps procure drones and other materials. The group is also active in Russia, where it assisted in establishing a drone factory. The U.S. is also sanctioning UAE-based Safe Seas Management FZE, which is part of Sahara Thunder's global shipping network. Additionally, a vessel called La Pearl, involved in a ship-to-ship transfer of Iranian commodities, is also being sanctioned. The U.K. and Canada are also imposing sanctions on Iran's drone program. Treasury Undersecretary Brian Nelson stated that Iran has been using its drones to destabilize the region and the world. The EU is also considering sanctions on Russian shadow fleet vessels.

 

Bloomberg

U.S. health conglomerate Kaiser is notifying millions of its members of a data breach that occurred earlier this month. The Kaiser Foundation Health Plan confirmed that 13.4m residents had their information taken in the breach.

 

Reuters

The fourth annual U.S. Bank CFO Insights Report has found that U.S. corporate finance leaders are increasing their focus on cutting costs to prepare for potential economic and geopolitical uncertainty. The top priorities identified in the survey of over 2,000 senior finance leaders nationwide are cutting costs within the finance function and across the entire business. Driving revenue growth is a lower priority. The report also highlights the increasing importance of improving risk identification and mitigation. Geopolitical tension has jumped in ranking as a top risk, while high inflation is cited less often. Finance leaders are prioritizing technology investments and AI to achieve cost cuts and efficiencies. Despite the challenging operating environment, a significant percentage of finance leaders remain optimistic about their business's financial outlook. The report emphasizes the challenges faced by CFOs in the current circumstances and their focus on cost cuts and risk management while not neglecting investment priorities.

 

ABL Advisor

The U.S. economy continued growing in the first quarter, albeit at a slower pace, but persistently high inflation continues to confound investors’ hopes that the Federal Reserve will begin slashing interest rates in the coming months.  The Commerce Department said Thursday that GDP expanded at a 1.6% seasonally- and inflation-adjusted annual rate, some way below the 2.5% gain projected by economists in a Bloomberg survey. Consumer spending increased 2.5% in the period, down from a 3.3% gain in the fourth quarter and below the 3% Wall Street estimate. Fixed investment and government spending at the state and local level helped keep GDP positive on the quarter, while a decline in private inventory investment and an increase in imports subtracted. Net exports subtracted 0.86 percentage points from the growth rate. The personal consumption expenditures price index, a key inflation variable for the Federal Reserve, rose at a 3.4% annualized pace for the quarter, its biggest gain in a year. “This was a worst of both worlds report – slower than expected growth, higher than expected inflation,” said David Donabedian, chief investment officer of CIBC Private Wealth U.S. “We are not far from all rate cuts being backed out of investor expectations. It forces [Fed Chair Jerome] Powell into a hawkish tone for next week’s [Federal Open Market Committee] meeting.”

 

USA Today

CNBC

Washington Examiner

Wall Street Journal

The Commerce Department says the U.S. trade deficit in goods widened 1.7% in March to $91.8bn, the largest gap since last April. Imports fell $4.6bn in $261bn, while exports dropped $6,1bn to $169.2bn. Wholesale inventories fell 0.4% in March after a 0.4% gain in the prior month. Non-auto retail inventories fell 0.1% after a 0.3% rise in February.

 

Market Watch

As bird flu continues to spread among dairy cows in the United States, the U.S. Department of Agriculture (USDA) will now require testing of the animals if they are moved across state lines. The USDA has identified the spread of bird flu between cows within the same herd, from cows to poultry, between dairies associated with cattle movements, and cows without clinical signs. The new order mandates that lactating cows must test negative for influenza A viruses, including bird flu, before being transported to another state. The goal is to limit the spread of the virus and gain a better understanding of the disease. The outbreak has spread to 33 herds in nine states. There has been one human infection reported in a dairy worker in Texas.

 

U.S. News

The number of births in the United States fell by 2% in 2023, according to a report from the CDC. The decline was driven by a decrease in birth rates among older teenagers and women aged 20-24. The total number of births dropped to 3,591,328 in 2023 from 3,667,758 the previous year. This decline brings the U.S. back in line with the 2% decrease seen between 2015 and 2020. Birth rates among women aged 25-34 fell by about 2.5%, while births among women aged 20-24 fell by 4% to a record low. Teen birth rates also reached a record low, with a 3% decline for teenagers aged 18-19. Births declined for all races except Native Hawaiian and Pacific Islander women. Cesarean section deliveries increased, likely due to the rising average age of mothers. The rate of cesarean section deliveries rose to 32.4%, the highest since 2013. The report highlights the challenges faced by older women during delivery.

 

Reuters

U.K. banks may face significant losses due to nature-related risks such as water scarcity and pollution, according to a study by the Green Finance Institute. The study warns that failure to address these risks could result in a 5% decline in the value of U.K. bank portfolios and a broader 12% economic decline by 2030. Nicola Ranger, director for greening finance at the University of Oxford, stated that these risks are material to both the economy and the financial system. The U.K., which is struggling with ecosystem degradation, is one of the most nature-depleted countries in the world, analysis suggests. The financial consequences of ignoring these risks could surpass those of the 2008 financial crisis and rival the economic setback caused by the Covid-19 pandemic, according to the study, which identifies agriculture, utilities and manufacturing as the sectors most exposed to nature-related risks in the U.K.

 

Bloomberg

A study by the National Foundation for American Policy (NFAP) suggests that highly skilled foreign nationals, including international students, are choosing Canada over the U.S. due to difficulties in obtaining H-1B visas and permanent residence in the U.S. Canada's more favorable immigration policies and easier pathways to permanent residence make it an attractive option for international students, the study says. It is noted that the rise in Indian students attending Canadian universities has fueled the growth of Indian immigrants to Canada, with a quadrupling in numbers since 2013.

 

The Times of India

Microsoft's $94m win at California's Office of Tax Appeals (OTA) should be declared a precedent for how the state taxes any company with income repatriated from abroad, according to major business interests. The opinion, posted by the OTA as non-precedential, is being challenged by the California Taxpayers Association and other groups who want it to apply to similar situations. Many multinationals have been making similar arguments in their disputes with the state.

 

Bloomberg Tax

Chipotle Mexican Grill has rescinded a policy introduced last week stopping its own employees from including chicken in their own meals. The directive aimed to preserve the company's chicken supplies to meet customer clamor for its chicken al pastor dish. “Due to the high demand for chicken in our restaurants and sustained success of our chicken al pastor, last week we asked all our corporate and in-restaurant employees to temporarily select another protein option for their meals to preserve our supply,” chief corporate affairs and food safety officer Laurie Schalow said. “We’ve since informed employees they can return to ordering chicken in their meals as normal.”

 

US News and World Report