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The Federal Reserve has admitted that regulators lack the tools to monitor risks associated with traders such as Bill Hwang and his Archegos Capital, which collapsed earlier this year leaving banks exposed to losses of more than $10bn.
In its semi-annual report on financial stability, the US central bank warned that existing measures of hedge fund leverage “may not be capturing important risks”, pointing to the Archegos failure as an example of hidden vulnerabilities in the global financial system.
Hwang’s high-wire act was hard to monitor because family offices face limited disclosure requirements and because he used derivatives known as equity total return swaps.
Compounding the frustrations of US regulators is that the biggest losses in the Archegos affair were suffered by banking desks directly supervised by officials in other countries, like Nomura of Japan and Credit Suisse in Switzerland.
Gary Gensler, new chair of the Securities and Exchange Commission, told the House financial services committee on Thursday that he had directed his staff to consider new disclosure requirements for the total return swaps employed by Archegos.
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Citi weighs launching crypto services Citigroup, one of the world’s largest currency trading banks, is considering taking its first steps into cryptocurrency markets after a surge in interest from clients.
Cheney rival backs Trump election claims Elise Stefanik, a lawmaker from New York who is challenging Liz Cheney for a party leadership role, repeated Donald Trump’s false claims that the 2020 election remains in doubt. Stefanik is jockeying to be elected the next Republican conference chair in the House of Representatives as Cheney faces calls for her removal.
Peloton treadmill recall to cost $165m Peloton said it expected its voluntary recall of up to 125,000 treadmills to cost $165m. It has ceased taking orders, cancelled deliveries, is issuing full refunds and is waiving three months of subscription fees to anyone who keeps their machines which have been reported to cause injuries and one death.
Beyond Meat shares slide as competition hots up Shares in Beyond Meat fell more than 6 per cent in US after-hours trading on Thursday after results showed the impact of tougher competition and disappointing progress getting its plant-based meat substitute on to restaurant menus.
Australia’s Macquarie announces plan to exit coal by 2024 The Sydney-based investment bank said on Friday that it expected its lending exposure to coal to “run off” within three years as it outlined a climate policy to align its financing activities with global commitments to achieve net-zero emissions by 2050.
Qatar finance minister arrested in rare crackdown Qatar’s finance minister has been arrested for questioning over allegations of abuse of power and the misuse of public funds. The public prosecutor has opened an investigation into allegations of embezzlement by Ali Sharif al-Emadi, according to a statement carried by the state news agency.
Yale endowment chief dies aged 67 David Swensen, the head of Yale University’s endowment, who helped reshape how institutions manage their money, has died from cancer aged 67.
US labour data Data out today is expected to confirm the US economy added another million jobs last month, thanks to widespread coronavirus vaccinations and hefty fiscal stimulus.
EU Social Summit The EU’s national leaders meet in the Portuguese city of Porto today to agree targets in three areas: employment, skills and training, and poverty reduction.
Has America had enough of war? As well as the heavy impact on the military, the war in Afghanistan has shaken something deep in America’s sense of itself. A shift seen across the political spectrum during two decades of fighting has begun to probe the global role of the US and even the idea of American exceptionalism, a notion that the country is a unique force for good in the world.
Northern Ireland’s uneasy centenary This month’s commemoration of Northern Ireland’s centenary — public statements on both sides of the border try to avoid the term “celebration” — is being marked with considerable sensitivity to the region’s contested nature. That is progress.
Millennial philanthropy may forever change finance Millennials appear to have subtly different attitudes towards money from their elders. Those distinctions could have important implications for future finance, even as the system sits in the hands of Gen X and boomers, writes Gillian Tett.
Bring back the business lunch As HR teams plan the return to the office, what workers really need is to gather in small groups to bond quickly, deeply and efficiently. Presentations are much better done online. What we really need is to chat, flirt, exchange inconsequential gossip, laugh, share stories and maybe get a little messy, writes Tim Hayward.
New Yorkers prop up the bar again The easing this week of restrictions on bars is another sign that New York City’s once fitful reopening from the Covid shutdown has broken into a headlong gallop. Johnny’s in Greenwich Village is a neighbourhood bar that has survived gentrification, September 11, the financial crisis, a fitness boom and is now emerging from the pandemic.
Why sustainable ETFs are on the rise ESG-focused exchange traded funds are grabbing market share, says ETF news editor Emma Boyde. But why are investors moving to sustainable ETFs — and what are the pitfalls? For the latest news and analysis on ESG and responsible business, subscribe to our Moral Money newsletter, delivered every Wednesday and Friday.