What is Bitcoin cash?
Bitcoin is a decentralized peer-to-peer electronic cash system that does not rely on any central authority like a government or financial institution. All transactions are recorded on a global public ledger called the blockchain. bitcoin.comWhat is Bitcoin Cash? | How Does Bitcoin Work? | Get Started with Bitcoin.com
“The biggest fear for many crypto traders has always been that big governments might impose harsh restrictions on cryptocurrencies,” said one analyst.
“Today’s weakness is mostly attributed to accelerated profit taking after news hit that Turkey bans crypto payments,” Edward Moya, senior market analyst at OANDA, told CoinDesk in an email. “The biggest fear for many crypto traders has always been that big governments might impose harsh restrictions on cryptocurrencies.”
The profit-taking behavior was also observed in the trading activity where the daily trading volume on eight spot exchanges tracked by CoinDesk went up from the prior day.
Speaking on CoinDesk TV’s “First Mover” show on Friday, CoinDesk Global Macro Editor Emily Parker said: “Crypto cannot really be stopped. You can make it a lot harder to access, but no government has been able to successfully shut down crypto entirely.”
Meanwhile, the star of altcoins on Friday is dogecoin (DOGE), the meme token born as a joke in 2013.
At press time, dogecoin was changing hands at $0.35, up 160.67% in the past 24 hours.
DOGE’s trading volume is another sign of bullish sentiment around the Shiba Inu-represented cryptocurrency, the most traded cryptocurrency on centralized exchanges in the past 24 hours, according to CryptoCompare.
According to IntoTheBlock’s newsletter on Friday, the number of addresses holding dogecoin for less than a month reached a record high in February and continued to go up in both March and April.
“With the WallStreetBets and GameStop saga setting a distinct anti-Wall Street tone among retail investors, DOGE, as an almost ‘anti-crypto,’ seems to have caught many imaginations,” Richard Delaney, senior content writer at OKEx Insights, told CoinDesk, referring to the Reddit forum “Set in this context, heavy promotion from the likes of Elon Musk, Mark Cuban and an army of YouTube and TikTok influencers are fueling the current dogecoin mania.”
But as Du Jun, co-founder of another popular crypto exchange, Huobi, warned, there are risks around the beloved meme token. Despite the growing interest from new investors, DOGE holders are still highly concentrated within the top 10 addresses, which counts about 41.35% of all circulating dogecoin.
Other digital assets on the CoinDesk 20 are mostly in the red Friday. Notable winners as of 20:00 UTC (4:00 p.m. ET):
Read full article at Cointelegraph
17 April, 2021 - 07:06pm
"Price is what you pay; value is what you get," the 'Oracle of Omaha' wrote in a letter to his Berkshire Hathaway shareholders in 2008.
"Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."
The quote highlights a couple of important points about investing.
It's common sense really. And while Bitcoin and other cryptocurrencies have been around for quite a while, and have made lots of people rich, these two points sum up why I'm staying away.
That is not to say that Bitcoin is going to collapse. It's just that Bitcoin doesn't make a lot of sense as an investment to me.
When you invest in the stock market, you become a part-owner of a business.
When they succeed, businesses are productive: they tend to make money, and as a shareholder, you're entitled to some of it.
It's the same with property, which can be rented out to generate an income stream for the owner.
You might decide, for example, to accept a certain return from a business or rental property, like 5 per cent. That can help you decide how much you're willing to value the investment: in this case, 20 times rent or income.
But how do you decide how much to pay for Bitcoin? It doesn't produce earnings or cash flow like a business or rental property.
It's really just a token that trades at whatever price people are willing to pay.
I certainly don't know how much a Bitcoin is worth myself. And that's one of the reasons I'm steering clear.
Is rent money really "dead money"? And do you really need to give up your daily coffee to get ahead?
These interest payments are often generated by lending out holdings to other investors and traders. This introduces counterparty risk: if your company lending your Bitcoin goes bust, you can end up losing money.
It's far riskier than a bank savings account, because cash deposits of under $250,000 are guaranteed by the Government.
Even in the unlikely situation your bank goes bust, you won't lose your cash because the Government will bail you out.
There's also the issue of security. The exchanges where people trade their cash for cryptocurrency are often targeted by hackers and thieves.
Security firm CipherTrace estimates that nearly $US2 billion was lost in cryptocurrency theft, hacks and fraud last year.
In late 2016, you could buy a single bitcoin for around $1,000. Today, a bitcoin is worth more than 70 times that.
It's great news for people who held on, but there's no guarantee the trend will continue.
And while the jury is still out on Bitcoin's future, it's clear that there is a lot of speculation going on.
It's something even Elon Musk, who recently bought $US1.5 billion of bitcoin for his company Tesla earlier this year, can admit.
"It should be considered speculation at this point. So don't go too far with the crypto speculation front," Mr Musk said recently.
"People should not invest their life savings in cryptocurrency, to be clear — that's unwise."
Another issue to consider is Bitcoin's volatility.
In December 2017, bitcoin briefly sold for more than $25,000. Shortly afterwards, the price crashed more than 30 per cent. The price continued to decline, falling to less than $5,000 by early 2019.
Even if you were a fervent believer in Bitcoin, it would have been extremely hard to hold on through that period.
Some Bitcoin supporters believe that the digital currency will be widely adopted in the future.
It is often used as an argument to buy Bitcoin: buy now, while they're cheap, before everyone else needs them.
But it's not entirely clear if this future will eventuate.
As Reserve Bank governor Philip Lowe has argued, cryptocurrencies like Bitcoin are not commonly used for everyday payments, and it's hard to see that changing.
"The value of Bitcoin is very volatile, the number of payments that can currently be handled is very low, there are governance problems, the transaction cost involved in making a payment with bitcoin is very high and the estimates of the electricity used in the process of mining the coins are staggering," Dr Lowe said in 2017.
Researchers estimate Bitcoin mining will soon consume more electricity each year than is required to power all of Australia, which is sparking concerns about its climate impact.
In Dr Lowe's estimation, cryptocurrencies seem "more likely to be attractive to those who want to make transactions in the black or illegal economy, rather than everyday transactions".
"So the current fascination with these currencies feels more like a speculative mania than it has to do with their use as an efficient and convenient form of electronic payment."
I don't know if Bitcoin is going to rule the world, and I don't want to bet that people will be willing to pay more for bitcoins in future than they do today. So, I'm simply not getting involved.
It's one of the great things about investing: you can pick and choose the investments that suit you most. And, for me, it's not Bitcoin and cryptocurrencies.
You may decide differently, and you may be right. I would just say one thing, which is to not get too carried away.
Don't risk what you can't afford to lose, don't put all your eggs in one basket, and have a plan for what you might do if the price falls.
And, finally, keep your bitcoins secure.
You don't want to end up like James Howell, who accidently threw away a hard drive containing 7,500 bitcoins.
In case you're wondering, that's worth more than $500 million at current prices. Ouch!
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17 April, 2021 - 07:06pm
16 April, 2021 - 02:03pm
If you haven't heard of Coinbase, a brief introduction is in order. Palmer describes the company as "the most popular consumer-facing cryptocurrency exchange in the U.S.," enabling ordinary investors (and traders) to buy and sell Bitcoin and similar cryptocurrencies on its platform. It's also one of the three biggest such exchanges in the world. Contributing to the company's popularity is the fact that Coinbase has never been hacked, giving it a reputation as a "safe harbor among crypto exchanges" -- not all of which can make the same claim.
Just how popular is Coinbase? A few facts and figures should illustrate. Coinbase boasts:
$223 billion in crypto assets stored on its platform through the end of Q1 2021. That's 11.3% of all cryptocurrencies in existence currently, and triple the cryptocurrency market share that Coinbase possessed three years ago.
The company had 56 million "verified users" at the end of Q1 2021 notes Palmer, up 30% from the end of Q4 2020. What's more, the number of "monthly transacting users" (i.e. verified users who actually placed trades on the platform)at Coinbase more than doubled to 6.1 million over the past three months.
So in addition to storing value on the platform, traders are also using Coinbase more actively. In a Q1 2021 estimated earnings report released April 6, Coinbase revealed that its revenues were $1.8 billion for the quarter, which was more than the company's revenue for all of fiscal 2020. Trading volume also appears to be accelerating, up nearly four-fold sequentially to $335 billion in just the three months from Q4 2020 to Q1 2021. And Coinbase is already a profitable operation.
As Palmer points out, the company earned $322.3 million in 2020, and earned an operating profit margin of 32% -- even more than traditional stock exchanges such as Nasdaq (16% operating margin) or the NYSE's parent company ICE (25%) get. And Coinbase is growing dramatically more profitable as time goes by. In Q1 2021, for example, revenues are estimated to come in at $1.8 billion, and net income at anywhere from $730 million to $800 million. If that's how things play out, Coinbase could earn a net profit margin as high as 44%.
When you consider that revenues are expected to more than quadruple this year (says Palmer) to $6.1 billion, merely maintaining that level of profitability could result in net income of more than $2.7 billion this year. On a $60 billion market capitalization, that implies a P/E ratio of only 22.2 -- which actually seems pretty cheap for a company growing as fast as this one appears to be doing.
Unsurprisingly then, Palmer thinks you should buy it.
Coinbase has unanimous support amongst Palmer’s colleagues. COIN's Strong Buy is based on 4 Buy ratings. With a $536 average price target, the analysts expect shares to rise by 58% over the coming months. (See COIN stock analysis on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Cathie Wood's Ark funds on Friday picked up more shares of Coinbase Global Inc (NASDAQ: COIN), which debuted this past week, while selling off some holdings of Tesla Inc (NASDAQ: TSLA). Here's the rundown on the trades. ARK bought 187,078 shares of Coinbase. That amounts to nearly $64 million at the day’s closing price of $342. The funds went into the flagship ARK Innovation ETF (NYSE: ARKK), as well as into the ARK Next Generation Internet ETF (NYSE: ARKW) and the Ark Fintech Innovation ETF (NYSE: ARKF). Ark bought almost 1 million shares of Coinbase earlier in the week.Ark sold off 134,541 shares of Tesla — worth $99.5 million at Friday's close. The Tesla shares came out of the ARK Innovation fund and the Next Generation Internet ETF. The trades follow a pattern Ark set earlier in the week on these two stocks. Image: Courtesy of Coinbase See more from BenzingaClick here for options trades from BenzingaDogecoin Retreats From All-Time HighThe Masters Wraps Up With A New Winner Amid Georgia Voting Law Controversy© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
CFRA analyst Sel Hardy began coverage of the stock with a Strong Buy rating, saying she expects emergency-use authorization to be granted quickly.
Telecom giant AT&T (NYSE: T) has its problems to be sure. It was only able to offload part of its struggling DIRECTV business, and that part was shed at a loss relative to its 2015 acquisition of the satellite television brand. Never even mind that AT&T at least postponed a dividend payout increase this year for the first time in 36 years.
(Bloomberg) -- Walt Disney Co.’s original Disneyland resort in California is sold out for weekends through May, an indication of pent-up demand for leisure activities as the pandemic eases in the nation’s most-populous state.Universal Studios in Los Angeles opened its gates Friday and was sold out for the first three days. Legoland, in Carlsbad, doesn’t have spots available this Saturday and Sunday. Six Flags Entertainment Corp., which operates the Magic Mountain park north of Los Angeles, also didn’t have tickets available this weekend.Theme parks in California began reopening this month for the first time in more than a year. They are doing so under tight restrictions that allow only state residents to visit and limit attendance to 25% of normal capacity. Many parks are requiring reservations for the first time, something Disney resorts chief Josh D’Amaro said benefits both the company and guests.“Reservations systems getting into the theme parks have allowed us not only to cope with this Covid era we’re in now, but it’s actually allowed us to be a lot more planful and predictable about the guest experience,” D’Amaro said in an interview last week. “We know the guests are responding very well to the experiences they’re having inside of our parks.”Disney opened its four theme parks in Orlando, Florida, last July, requiring advance purchases for specific dates.Online ApologyDisneyland began selling tickets to the general public on Thursday. Many of those trying to obtain spots got an online apology from the company saying they would have to wait due to the high demand. Many weekday tickets are available. On sold-out days, guests can still buy a more expensive “park-hopper” ticket and designate California Adventure, the company’s neighboring park, as their primary destination. They could then enter Disneyland after 1 p.m. The company said tickets could still become available due to cancellations and other factors.SeaWorld in San Diego has tickets widely available and was offering for them for as much as $30 off the regular $96 price on some days. Cedar Fair LP’s Knott’s Berry Farm reopens next month, with tickets going on sale April 26.Theme-park attendance during the seasonally strong summer months should accelerate as the vaccine rollout continues and demand for outdoor leisure activities increases, Fitch Ratings said in report Friday. The bond rating company expects regional attendance to recover to 60% to 70% of 2019 levels in 2021 and reach 100% in 2022, as the broader U.S. economy recovers and vaccine penetration expands.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
ARK on Friday bought 187,078 shares of Coinbase, which debuted on the Nasdaq earlier this week, in a purchase worth nearly $64 million at the day’s closing price of $342. It sold 134,541 shares of Tesla, valued at $99.5 million at Friday's close. Tesla is still by far the firm's biggest position by value on its major funds.
MMT might not work in the future, but for now, it is setting up policies leading to a stronger economy and less inequality, an analyst says.
The Dow Jones was up modestly in afternoon trading, poised for its fourth straight weekly gain. Cisco Systems outperformed, helped by an analyst upgrade.
MoffettNathanson analyst Lisa Ellis made headlines this week after placing a $600 price target on Coinbase Global Inc (NASDAQ: COIN) and calling the stock a "must-own" for long-term investors. Some may be underestimating how difficult it is to do what Coinbase is doing, Ellis said Friday on CNBC's "Squawk Box." Coinbase is creating liquidity and exchanges for cryptocurrencies, as well as securely storing cryptocurrencies, Ellis told CNBC. The company runs custom nodes on 15 blockchains, creating liquidity in 108 assets, she said. Coinbase is much more analogous to broader technology companies like Square Inc (NYSE: SQ), Shopify Inc (NYSE: SHOP) or Paypal Holdings Inc (NASDAQ: PYPL) as opposed to traditional exchange and brokerage companies, Ellis told CNBC. The company is evolving into a technology platform for cryptocurrencies, she said. Coinbase has built something that has sustainability for "at least several years," Ellis said. Related Link: Coinbase Headed To 0 — Why Analyst Sees Crypto Exchange As 'Must-Own Stock' For Growth, Tech Buyers The analyst equates Bitcoin (CRYPTO: BTC) with digital gold and Ethereum (CRYPTO: ETH) with the fuel behind the system. The future of Coinbase is dependent on Bitcoin "gaining more mainstream acceptance" as an alternative asset class, Ellis said. COIN Price Action: Coinbase Class A shares were up 2.56% at $331 at last check Friday. Image by Igor Schubin from Pixabay. Latest Ratings for COIN DateFirmActionFromTo Apr 2021Loop CapitalInitiates Coverage OnBuy Apr 2021DA DavidsonMaintainsBuy Apr 2021BTIGInitiates Coverage OnBuy View More Analyst Ratings for COIN View the Latest Analyst Ratings See more from BenzingaClick here for options trades from BenzingaExclusive: Voyager CEO Steve Ehrlich Welcomes Coinbase To The PartyIPO Warrior Matt Hammond Joins 'Power Hour' To Talk Trading Coinbase© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Benzinga has examined the prospects for many investor favorite stocks over the past week. The past week's bullish calls included the electric vehicle leader and a prominent IPO. Short sellers were behind some of the bearish calls seen during the week. The Dow Jones industrial average crossed above 34,000 for the first time last week, as strong results from big banks kicked off the first-quarter earnings reporting season. Optimism also was boosted by good economic data, a steady Treasury yield and reassuring words from Federal Reserve Chair Jay Powell. All of this muted the impact of bad vaccine news early in the week. Semiconductor shortages continue to plague various industries, and things may get worse. Bitcoin keeps hitting record highs, as does Dogecoin, and the new U.S. Securities and Exchange chair is a blockchain technology expert. The week also saw the largest direct listing in history, Jeff Bezos' final shareholder letter as CEO and news of the much anticipated next big event from the iPhone maker. And as the White House continues its push to vaccinate Americans against COVID-19, signs of pent-up reopening demand are plentiful. Through it all, Benzinga continued to examine the prospects for many of the stocks most popular with investors. Here are a few of this past week's most bullish and bearish posts that are worth another look. Bulls In "Why This Tesla Analyst Is Turning Bullish," Priya Nigam focuses on how the leading electric vehicle maker's aggressive diversification efforts prompted one key analyst to upgrade Tesla Inc (NASDAQ: TSLA), despite the stock's rich valuation, and to more than double its price target. In Chris Katje's "Why Coinbase's Upside Could Be Immense, With A Price Target Of 0," discover why the featured analyst considers newly public Coinbase Global Inc (NASDAQ: COIN) to be the gold standard among digital asset exchanges. Google parent Alphabet Inc (NASDAQ: GOOGL) has multiple bullish catalysts on the horizon. So says Wayne Duggan's "Wedbush Adds Alphabet Stock To Best Ideas List: What You Need To Know." Updated coverage on tech stocks was also bullish on Snap Inc (NYSE: SNAP). Adam Eckert's "JPMorgan Analyst Rules Out Long-Term Negative Impact Of COVID-19 On The Airline Industry" discusses the long-term prospects for JetBlue Airways Corporation (NASDAQ: JBLU) and its peers due to demand recovery among consumers. "Why This Analyst Thinks Plug Power Stock Deserves Elevated Valuation" by Shanthi Rexaline examines what recent developments may mean for shares of hydrogen and fuel cell manufacturer Plug Power Inc. (NASDAQ: PLUG). For additional bullish calls of the past week, have a look at the following: Why Bitcoin Fundamentals Depict A Healthy Bull Market: Cathie Wood's ARK Invest Report Is Now The Time To Buy These 4 Under-The-Radar Bank Stocks? 5 Trends Auto Stock Investors Should Watch In 2021 Bears A 160% rally in the past 11 months has resulted in General Electric Company (NYSE: GE) stock becoming "very overvalued," according to "Gordon Haskett's John Inch On Why General Electric Is 'Very Overvalued'" by Adam Eckert. What about that 8 for 1 reverse stock split? Jon Harris' "Here Are The Stocks With The Highest Short Interest Rate This Week" suggests that the current sentiment on Sunrun Inc (NASDAQ: RUN), ViacomCBS Inc. (NASDAQ: VIAC) and other stocks is bearish. "AMC 'Under Attack' From Short Sellers Again, CEO Says" by Madhukumar Warrier shares why AMC Entertainment Holdings Inc. (NYSE: AMC) is seeking shareholder approval to sell 500 million shares but promises not to do so in the calendar year 2021. See why the CEO also praised the meme investors. In Melanie Schaffer's "QuantumScape Stock Falls After Pump-And-Dump Accusations: A Technical Analysis," find out why the chart for QuantumScape Corporation (NYSE: QS) stock looked bearish this past week in the wake of a scathing report on the Bill Gates-supported EV battery maker. In "BofA Says GlaxoSmithKline's Decision To Halt Feladilimab Studies Is Disappointing" Priya Nigam looks at how a top analyst reacted to GlaxoSmithKline plc (NYSE: GSK) announcing it would cease its Phase 2 and 3 trials of a cancer treatment. For additional bearish takes, be sure to check out these posts: Bitcoin Is A Bubble, 74% Of Bank of America's Professional Investors Believe Some SPACs Could Fail Outright, Research Is Paramount: Cathie Wood 8 Stocks With The Highest Short Percent Of Float At the time of this writing, the author had no position in the mentioned equities. Keep up with all the latest breaking news and trading ideas by following Benzinga on Twitter. Image by PublicDomainPictures from Pixabay. See more from BenzingaClick here for options trades from BenzingaBarron's Latest Picks And Pans: Affirm, Bitcoin, BorgWarner, Credit Suisse And MoreThe Past Week's Notable Insider Buys Included Biotechs, Public Offerings, A SPAC And More© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The cost of renewable energy is plunging, but there are still sound reasons to encourage its adoption through subsidies.
Dogecoin, dogecoin, dogecoin! That must be what bitcoin holders are saying lately. Owners of the world's No. 1 crypto, like Jan from the 1970s-era sitcom, The Brady Bunch, must feel as if they have been living in the shadow of a more intriguing sister crypto.
Ant Group is exploring options for founder Jack Ma to divest his stake in the financial technology giant and give up control, as meetings with Chinese regulators signaled to the company that the move could help draw a line under Beijing's scrutiny of its business, according to a source familiar with regulators' thinking and two people with close ties to the company. Reuters is for the first time reporting details of the latest round of meetings and the discussions about the future of Ma's control of Ant, exercised through a complicated structure of investment vehicles. The Wall Street Journal previously reported that Ma had offered in a November meeting with regulators to hand over parts of Ant to the Chinese government.
WASHINGTON (Reuters) -The U.S. Treasury Department on Friday said Vietnam, Switzerland and Taiwan tripped its thresholds for possible currency manipulation under a 2015 U.S. trade law, but refrained from formally branding them as manipulators. In the first semi-annual foreign exchange report issued by Treasury Secretary Janet Yellen, the Treasury said it will commence "enhanced engagement" with Taiwan and continue such talks with Vietnam and Switzerland after the Trump administration labeled the latter two as currency manipulators in December.
Excess cash in the financial system has pressured overnight interest rates, in some instances pushing them negative, which, analysts said, could prompt the Federal Reserve to lift the short-term rates it manages. The overnight repurchase rate, which measures the cost of borrowing short-term cash using Treasuries or other debt securities as collateral, dropped to as low as -0.06% in late March and hit that level again on Wednesday, before stabilizing at around 0.01% on Friday. The U.S. secured overnight financing rate (SOFR), a short-term reference rate replacing the benchmark London interbank offered rates (LIBOR), has been pinned to 0.01% since about March.
(Bloomberg) -- Lai Xiaomin, former chairman of China Huarong Asset Management Co., was found guilty of accepting $277 million in bribes, as well as bigamy, crimes serious enough to see him summarily executed in January.Such extreme behavior -- and consequences -- are rare in any country. But in China, more modest but still flagrant mismanagement is common in the $54 trillion financial industry.In 2020 alone, the country’s top banking regulator issued almost 3,200 violations against institutions and 4,554 against individuals ranging from senior executives to rank-and-file staff; it levied fines totaling 2.3 billion yuan ($352.2 million). In the U.S., which has a much longer history of bank regulation, the Federal Reserve took 58 enforcement actions in total.Among the infractions, Chinese investigators found fabricated financial statements, executives’ nannies and chauffeurs installed as controlling shareholders, and favorable rates and sweetheart deals for investors and relatives.The state has also bailed out three poorly-run small lenders and merged dozens more since its first crackdown three years ago. Still, out of 4,400 financial institutions, 12.4% are designated at high risk for failure by the central bank. Now, the government is rewriting the commercial banking law and will have “zero tolerance” for transgressions.“Poor governance is obviously a risk for financial stability,” said Alicia Garcia Herrero, chief Asia economist of Natixis SA. If it’s contained within the country’s smallest institutions, the potential for damage is minimal, she added.“The issue is that we don’t really know whether governance problems are really contained and this is the big risk.”The past week offered a fuller picture of the costs of mismanagement and unchecked corruption. Huarong, which has around $42 billion in outstanding debt at home and abroad, delayed its earnings report in early April, beginning a spiral that’s seen its bonds fall to a record low of about 52 cents on the dollar. Its shares are down 67% since the 2015 debut and currently suspended.A China Huarong spokesperson said Thursday the company “learned the lesson from Lai Xiaomin’s case, firmly implemented central government policies, continued to eliminate the toxic influence, restored our corporate governance, accelerated business transformation and management reform, and enhanced corporate governance to move toward stable and better development.”It’s the second time in two years that creditors have been left at the mercy of bad actors. In 2019, China jolted global markets with a surprise seizure of Baoshang Bank Co., once seen as a model for funding regional economies. Triggered by the misappropriation of funds by its controlling shareholder, the takeover and eventual bankruptcy of Baoshang also called into question long-held assumptions of a perpetual government backstop.In general, the China Banking and Insurance Regulatory Commission has placed the blame for problems in the financial system on bank directors, shareholders and executives, saying in a December statement that “ineffective corporate governance is the root cause.”In one example, a rural bank lent the equivalent of 95% of its net capital to its shareholders and affiliates, according to the CBIRC, which didn’t name the bank. Most of those loans defaulted or are non-performing.The largest shareholder at one bank inflated revenues by 80 million yuan to make the institution look profitable. Elsewhere, one person and 22 of what the regulator described as his “shadow affiliates” held stakes in 17 banks, far exceeding the limits on banking ownership.The regulator has also identified bad behavior in its own ranks, putting its official in charge of oversight of the rural banks under investigation for severe disciplinary and law violations.Social media, too, has allowed employees to air grievances and reports of wrongdoing. Earlier this year, a whistle-blower at China Life Insurance Co. claimed on the social network Sina Weibo that the branch head fabricated client signatures and pocketed millions of dollars of non-existent marketing expenses. Following a CBIRC investigation, the company said in a statement that it was fined 510,000 yuan for inadequate internal controls broadly and pledged to enhance compliance education.In response to the rising risks, the central bank is revising its commercial bank law. The proposed changes include a new chapter on corporate governance, which for the first time specifies the responsibilities of shareholders and the key role of the board of directors. It also bars entities from using borrowed money to invest in banks and prohibits directors from holding posts at more than one affiliated institution.Unlike in the U.S. and Europe where misconduct and mismanagement often lead to public outcry, regulatory probes, and even high-profile firings, top leaders have been so far insulated in China. Senior executives are rarely held responsible for branch-level violations, and the financial penalties pale compared with the 1.9 trillion yuan of profit the industry earned last year.“This is work in progress,” said James Stent, author of China’s Banking Transformation and a former banker who’s spent more than a decade on the boards of two Chinese lenders. “Governance is generally good at priority large banks, but problems remain at lower level financial institutions. Addressing them will take time, and governance will always be imperfect.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
For all the insouciance with which markets treated Washington's latest sanctions on Russia, its move to target Moscow's main funding avenue - the rouble bond market - has in some ways, crossed the Rubicon, potentially with far-reaching consequences. Drawing on experiences of sanctions imposed previously, including after the 2014 Ukraine crisis and the Mueller report on Russia's alleged U.S. election meddling, money managers haven't rushed to dump Russian assets en masse. The rouble, which fell as much as 2% at one point on Thursday, has clawed back losses and is on its way to recording its best week this year; Russian bond yields, on local as well as international markets, have fallen.
Property purchases in China funded through bank loans fraudulently obtained by speculators are fuelling already red-hot real estate markets in its biggest cities and beginning to alarm regulators. Four tier-1 Chinese cities, including Shenzhen and Shanghai, have reported since March that a probe by financial regulators found that 877.8 million yuan ($134.21 million) of bank loans were improperly used for property purchases.
French automaker Renault will seek to generate more than 1 billion euros ($1.20 billion) in sales from the so-called "circular economy" by turning its Flins factory outside Paris into a research, recycling and repair centre, its boss told French weekly Journal du Dimanche. "Our ambition, by 2030, is to achieve more revenue (from recycling and repair at Flins) than from assembling cars there," said Luca de Meo, Renault's chief executive.
Bitcoin tumbled more than 4% on Friday after Turkey's central bank banned the use of cryptocurrencies and crypto assets for purchases citing possible "irreparable" damage and transaction risks. In legislation published in the Official Gazette, the central bank said cryptocurrencies and other such digital assets based on distributed ledger technology could not be used, directly or indirectly, to pay for goods and services. The decision could stall Turkey's crypto market, which has gained momentum in recent months as investors joined the global rally in bitcoin, seeking to hedge against lira depreciation and inflation that topped 16% last month.
A pension fund filed a lawsuit against Credit Suisse Group AG on Friday in a U.S. court, accusing the Swiss bank of misleading investors and mismanaging risk exposure to high-risk clients, including Greensill Capital and Archegos Capital Management. The pension fund, City of St. Clair Shores Police & Fire Retirement System, based in St. Clair Shores, Michigan, filed the class action lawsuit in federal court in Manhattan, alleging violations of federal securities laws.