“China Makes Historic Move to Open Market for Financial Firms.”
China took a major step toward the long-awaited opening of its financial system, saying it will remove foreign ownership limits on banks while allowing overseas firms to take majority stakes in local securities ventures, fund managers and insurers.
The new rules, unveiled at a government briefing on Friday, will give global financial companies unprecedented access to the world’s second-largest economy. The announcement bolstered the reform credentials of Chinese President Xi Jinping less than a month after he cemented his status as the nation’s most powerful leader in decades. It also coincided with Donald Trump’s visit to Beijing, though the U.S. president didn’t know it was coming.
Foreign financial firms applauded the move, with JPMorgan Chase & Co. and Morgan Stanley saying in statements that they’re committed to China. UBS Group AG said it will continue to push for an increased stake in its Chinese joint venture. While China has already made big strides in opening its equity and bond markets to foreign investors, international banks and securities firms have long been frustrated by ownership caps that made them marginal players in one of the fastest-expanding financial systems on Earth.
Foreign banks held 2.9 trillion yuan ($436 billion) of assets in China at the end of 2016, accounting for 1.26 percent of the nation’s total banking assets, the lowest share since 2003, according to the China Banking Regulatory Commission. They earned 12.8 billion yuan in the nation last year, less than 1 percent of the profits at Chinese counterparts.
Meanwhile, most foreign-backed securities joint ventures are minnows in China. JPMorgan First Capital ranked 120th out of China’s 125 brokerages by net income in 2015, according to the Securities Association of China. UBS Securities Co., whose 296 million yuan profit was the biggest among foreign-backed joint ventures, ranked 95th.
“Bitcoin slides by over $1000 in less than 48 hours.”
Bitcoin dropped below $7,000 on Friday to trade more than 5 percent down on the day, having fallen by well over $1,000 since hitting an all-time high on Wednesday.
Bitcoin dropped to $6,800 on the Luxembourg-based Bitstamp exchange BTC=BTSP by 1200 GMT, before recovering a little to $6,870 just over 20 minutes later.
On Wednesday around 1800 GMT, it had touched $7,888 after a software upgrade planned for next week that could have split the cryptocurrency in two was suspended.
As bitcoin fell, Bitcoin Cash – a clone of the original that was generated from another split on Aug.1 – surged, trading up as much as 35 percent on the day at around $850, according to industry website Coinmarketcap.
Despite losing almost 7 percent this week, bitcoin is still up more than 600 percent so far this year.
“ECB Warns of Complacency Risks in Surging Euro-Area Economy.”
With the euro-area economy in the best shape in almost 20 years, now is the time to prepare for future slumps, according to European Central Bank policy maker Benoit Coeure. The region’s expansion is proving increasingly balanced and robust, much like its upturn in 1999, the ECB Executive Board member said on Thursday. But while current monetary stimulus will continue as long as necessary, the success must also be nurtured by structural reforms that will better equip the region for the next shock, he said.
The ECB has spent years pumping cash into the economy to revive inflation and growth, and last month pledged to keep doing so until at least September 2018, albeit at a slower pace. Yet the debate over when the central bank should step back is gaining intensity.
The commitment to keep interest rates low until after asset purchases end doesn’t leave policy makers room to raise borrowing costs next year, Governing Council member Ewald Nowotny said in a radio interview on Friday. At the same time, the ECB should bring QE to an end after September, “if the economy develops in a way that we currently expect,” he said.
While Coeure was referring to the broad character of the economy, a European Commission report on Thursday highlighted how output growth is proving stronger than anticipated. The commission raised its forecasts to show gross domestic product expanding 2.2 percent this year, up from its May prediction of 1.7 percent. That would be the highest pace in a decade.
“Brexit bill: Barnier gives UK two weeks to clarify key issues.”
The UK has two weeks to clarify key issues or make concessions if progress is to be made in Brexit talks, the bloc’s chief negotiator has said.
Michel Barnier, member of the European Comission, was speaking after meeting the Brexit secretary for talks on citizens’ rights, the Irish border, and the UK’s «divorce bill». David Davis said it was time for both sides «to work to find solutions». Before the talks, Theresa May said she wanted the UK’s exit date set in law, and warned MPs not to block Brexit.
Speaking at a press conference in Brussels, Mr Barnier suggested Britain would have to clarify its position in the next fortnight on what it would pay to settle its obligations to the EU if the talks were to have achieved «sufficient progress» ahead of December’s European Council meeting. «It is just a matter of settling accounts as in any separation,» Mr Barnier said.
Mr Barnier also said both sides had to work towards an «objective interpretation» of Prime Minister Theresa May’s pledge that no member of the EU would lose out financially as a result of the Brexit vote. The Brexit secretary insisted good progress was being made across the board, and that the negotiations had narrowed to a «few outstanding, albeit important, issues».
Mr Davis and Mr Barnier agreed there had been progress on the issue of settled status for EU citizens in the UK after Brexit. Mr Barnier said the UK had provided «useful clarifications» on guaranteeing rights, although more work needed to be done on some points including rights of families and exporting welfare payments.
For the UK’s part, Mr Davis said, the government had «listened carefully» to concerns and that there would be a «streamlined and straightforward» process for EU nationals to obtain settled status.