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Credit Suisse says it shut Ai Weiwei account due to missing paperwork

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November 6, 2021

ZURICH (Reuters) – Credit Suisse closed a bank account of dissident Chinese artist Ai Weiwei because of missing paperwork, it said on Saturday, responding to his accusation that the Swiss bank had shut him out as part of a strategy to win business in China.

“The bank’s decision was made in spring 2021 because Mr Weiwei did not provide legally required information despite repeated requests from the bank,” the bank said in a statement to Reuters.

“The termination of the client relationship was justified by business reasons,” it added, confirming an earlier report in Swiss newspaper Tages-Anzeiger.

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Ai wrote in September on website artnet.com that the bank had told him it was shutting his account because he had a criminal record, though he said he had never been charged with a crime despite spending 81 days in detention in China in 2011.

“So why was Credit Suisse using my ‘crime’ as its reason to terminate my bank account? Not long ago the institution announced that it was accelerating its recruitment of employees in China,” he wrote.

“At the same time, it would be seeking to take majority control of its joint ventures in the securities market and to apply for a license that would allow it to expand its business in both personal and investment banking.”

He later told Reuters: “Even if they do reverse this decision, I am not willing to be associated with a bank which has such a strange relationship with China.”

Ai, 64, is one of China’s most high profile artists and political activists, and helped design the 2008 Beijing Olympics’ famed Bird’s Nest stadium before falling out with the Chinese authorities. He now lives in Portugal. Reuters sought comment from him on Saturday.

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(Reporting by John Revill; Editing by Peter Graff)

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Exclusive-KNDS readies 650 million euro binding bid for Leonardo units – sources

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December 2, 2021

By Angelo Amante, Francesca Landini and Elisa Anzolin

ROME (Reuters) – KMW+Nexter Defence Systems (KNDS) is close to making a 650 million euro ($736 million) binding bid for Leonardo’s OTO Melara and Wass units, three sources said on Thursday, in a move that could strengthen its position in the land defence sector.

The Franco-German consortium is conducting due diligence on the two units that Italian defence group Leonardo has put on the block and could submit its offer by the end of the year or early 2022, the sources familiar with the matter said.

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KNDS is pitted against Italian shipbuilder Fincantieri, which expressed an interest in the units but has not started formal due diligence and has put forward a less generous proposal so far, the sources said.

The Italian government, which controls both Leonardo and Fincantieri, is determined to have the final say on the deal.

As Europe pushes for closer cooperation on defence, Rome wants to keep open the door for cooperation between domestic and foreign groups, political sources have said, but also wants to protect jobs and growth at home.

As part of its proposal, KNDS has offered to include Italy in the Main Ground Combat System (MGCS) tank project, an option that would give Leonardo the possibility of offering its sensors and electronics for the new tank.

OTO Melara, which makes naval and terrestrial cannons, would also fit into KNDS’s portfolio and strengthen its hand in a 2.2 billion euro contract that the Italian army is due to launch in the near future.

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OTO Melara is currently a tank supplier to the Italian army together with Iveco Defence Vehicles, while Wass produces torpedoes.

Fincantieri, which started informal talks with Leonardo over OTO Melara and Wass before KNDS’ approach, could decide to join forces with other groups, the sources said.

($1 = 0.8836 euros)

(Additional reporting by Christina Amann in Berlin Writing by Francesca Landini; Editing by Mark Potter)

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Fed’s Quarles says regulatory overkill could stifle stablecoin innovation

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December 2, 2021

By Pete Schroeder

WASHINGTON (Reuters) -Randal Quarles, the former regulatory chief of the Federal Reserve, said on Thursday that U.S. regulators may “unnecessarily” hamper innovation around so-called stablecoins if they pursue recent recommendations put forward by a Biden administration working group.

Quarles, who will leave the Fed’s Board of Governors at the end of the month, said regulators must show “reasoned constraint” on monitoring stablecoins, which are digital currencies whose value are pegged to traditional assets like the dollar. He added that banks should be allowed to engage with them once certain concerns around transparency, stability and consumer protection are met.

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“It is clear that there is a strong demand for these assets among bank customers, and well-regulated banks should be allowed to engage in activities regarding these assets,” he said in a virtual appearance at an American Enterprise Institute event in Washington.

Quarles specifically cited a recommendation that any stablecoin issuers or “wallet providers” have limited access to other commercial entities, calling it needlessly stricter than rules for nondigital assets.

The President’s Working Group on Financial Markets published a report in November calling on Congress to pass a new law to apply bank-like scrutiny to stablecoin providers.

In his final speech at the Fed, Quarles laid out a series of recommendations for the central bank following his exit. President Joe Biden has yet to nominate his replacement.

For example, Quarles also said the Fed should consider easing its “globally systemic” capital surcharge for the nation’s largest banks, particularly as regulators move to finalize added global capital restrictions known as “Basel III.”

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He said the Fed’s plan to finalize those new rules would come after his exit from the U.S. central bank, and said there will be “little justification” for keeping the G-SIB surcharge at its current high level once it’s done.

He also argued the Fed should consider averaging the results of its annual stress test of bank finances over several years to result in a more consistent capital level, and that the central bank needs to address “perverse implications” of current leverage requirements that could discourage banks from holding safe assets in times of stress.

(Reporting by Pete SchroederEditing by Paul Simao)

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S&P 500, Dow climb on boost from financials, Boeing

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December 2, 2021

By Devik Jain and Anisha Sircar

(Reuters) – The Dow and the S&P 500 rebounded on Thursday, boosted by financials shares and Boeing as rising cases of the new Omicron variant globally continued to drive volatility across markets.

Boeing Co jumped 3.5% after China’s aviation authority issued an airworthiness directive on the 737 MAX jets that will help pave the way for the model’s return to service in China.

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Kroger Co surged 9.9% to top the S&P 500 after the retailer raised full-year sales and profit forecasts, boosted by sustained demand for groceries.

Travel and leisure stocks bounced back, with S&P 1500 Airlines and the S&P 1500 Hotels, Restaurant and Leisure indexes rising 4.5% and 2.8%, respectively.

All of the 11 major S&P sectors advanced in early trading, with eight of them surging more than 1% each. Financials led the pack, up 2.3%.

Wall Street’s main indexes closed below key technical levels on Wednesday, with the Dow breaching its 200-day moving average for the first time since July 2020 on growing angst about the latest coronavirus variant and the Federal Reserve’s hawkish comments.

“It is a bit of a ‘buy the dip’ environment … uncertainty will persist over the next week or so as scientists do more studies over the new variant,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

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“I still think investors want to focus on equities, they just need to be given a reason to do so.”

Wall Street whipsawed this week as investors scrambled for bargains after every drawdown. Still, the three indexes are tracking sharp weekly losses, with the Dow on pace for its fourth straight fall.

The United States and Germany joined countries around the globe planning stricter COVID-19 restrictions as the Omicron variant rattled markets, fearful it could choke a tentative economic recovery from the pandemic.

The CBOE volatility index, also known as Wall Street’s fear gauge, was last trading at 28.6 points, a day after hitting its highest level since February.

At 10:27 a.m. ET, the Dow Jones Industrial Average was up 462.69 points, or 1.36%, at 34,484.73 and the S&P 500 was up 43.36 points, or 0.96%, at 4,556.40.

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The Nasdaq Composite was up 31.90 points, or 0.21%, at 15,285.96, supported by shares of Amazon.com, Tesla Inc, Microsoft Corp and Nvidia Corp.

Apple Inc fell 2.7% after Bloomberg reported about slowing demand for Apple’s iPhone 13.

Meanwhile, lawmakers reached an agreement to fund the U.S. government until Feb. 18 as they scramble to avoid a partial government shutdown this weekend.

Stellar earnings reports and strong economic growth have powered U.S. stocks to a series of record highs in November, with the S&P 500 climbing 20.1% so far this year.

A Reuters poll of equity analysts said a correction was likely in the next six months, with the benchmark expected to gain 7.5% between now and end-2022 to finish at 4,910.

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Advancing issues outnumbered decliners by a 2.63-to-1 ratio on the NYSE and a 1.43-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and nine new lows, while the Nasdaq recorded seven new highs and 393 new lows.

(Reporting by Devik Jain and Anisha Sircar in Bengaluru; Editing by Maju Samuel)

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