Stock Markets
US banks push back as regulators prepare international capital hikes
U.S. banks are pushing to soften a major regulatory proposal to hike bank capital requirements, worried it could prove too onerous, especially for lenders still reeling from the March banking crisis, according to six people briefed on the matter.
Bank regulators led by the U.S. Federal Reserve are finalizing the proposal which would implement international capital standards agreed by the Basel Committee on Banking Supervision in the aftermath of the 2007-2009 financial crisis.
Bankers are particularly concerned by an aspect of the draft proposal that would apply higher capital charges on non-interest revenue, such as the fees lenders charge on credit cards or investment banking services.
That capital charge is part of the package agreed by the Basel Committee in 2017, but the industry says it overstates the risk for banks that have a high proportion of non-interest income and had hoped U.S. regulators would mitigate its impact, the people said.
Bank groups are pushing for regulators to cap the proportion of assets on which such charges would apply, said three people, but it was unclear if the agencies would take that approach.
Non-interest services income has been a key focus of many lenders’ growth strategies in recent years, one industry official noted.
American Express, Morgan Stanley and the U.S. units of UBS, Deutsche Bank and Barclays are among banks with a high proportion of non-interest income, according to a 2022 blog by Washington group the Bank Policy Institute.
Barclays, Deutsche Bank, and Morgan Stanley declined to comment. UBS and American Express did not immediately provide comment.
On Wednesday, Fed Chair Jerome Powell told Congress it was critical banks have strong capital, but regulators must be mindful of the tradeoffs.
WALL STREET CRACKDOWN
While the Basel rules were agreed years ago, the U.S. regulations to comply with them are being drafted in the wake of this year’s banking crisis in which deposit runs caused Silicon Valley Bank and two other lenders to fail. The proposal is the first major rule led by Fed Vice Chair for Supervision Michael Barr, who has launched a sweeping review of capital rules and is expected to be tough on Wall Street.
“The baseline has shifted to an assumption that the scale and scope of the proposal is going to be far more punitive than anyone expected at the end of last year,” said Isaac Boltansky, director of policy research for brokerage BTIG.
Industry executives argue the bank failures were caused by mismanagement and liquidity issues, and that system-wide capital is already ample.
The proposal is also expected to apply stiffer capital rules to smaller lenders with over $100 billion in assets, which would include some that experienced liquidity problems this year, three sources said.
Given investor jitters over the health of the industry and the broader economy, bankers say, hiking capital now could backfire, putting pressure on banks and hurting lending.
Republican officials at the agencies have flagged similar concerns, two people said, while Republican lawmakers on Wednesday also raised worries over capital rules with Powell.
“It’s extremely important for the agencies to be mindful of the economic costs at a time of great uncertainty,” said Kevin Fromer, CEO of the Financial Services Forum whose members, the country’s largest eight banks, have roughly $900 billion in common equity capital.
“It’s not in the interest of the U.S. economy to raise capital requirements on institutions that are already well-capitalized.”
The Fed is drafting the Basel rules with the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corp. (FDIC). Regulators had hoped to unveil the proposal this month but staff are still working on the draft and the timeline has slipped to later in July, five people said.
The FDIC and OCC declined to comment.
Speaking to reporters last week, acting Comptroller Michael Hsu said banks had “not been shy about sharing their concerns” which regulators were taking into account.
Stock Markets
Romanians vote in presidential election focused on high living costs, Ukraine war
By Luiza Ilie
BUCHAREST (Reuters) -Romanians started voting on Sunday in the first round of a presidential election that may give hard-right politician George Simion a chance of winning, with voters focused on high living costs and the country’s support for Ukraine.
Opinion surveys show leftist Prime Minister Marcel Ciolacu, 56, leader of Romania’s largest party, the Social Democrats, will make it into the run-off vote on Dec. 8, with Simion, 38, of the Alliance for Uniting Romanians the likely runner-up.
About 3.7 million Romanians, or 20.7% of registered voters in the European Union and NATO state, had cast their ballots across the country by 1045 GMT, data showed. Voting ends at 1900 GMT with exit polls to follow immediately.
Voting by Romanians abroad, who can influence the result and where the hard right leader is popular, began on Friday.
Analysts expect Ciolacu to win the second round against Simion, appealing to moderates and touting his experience running Romania during a war next door.
But the prospect of a Ciolacu-Simion run-off vote could mobilise centre-right voters in favour of Elena Lasconi, leader of opposition Save Romania Union, ranked third in opinion surveys, analysts said.
Simion has cast the election as a choice between an entrenched political class beholden to foreign interests in Brussels and himself, an outsider who will defend Romania’s economy and sovereignty.
He opposes military aid to Ukraine and supports a peace plan as envisioned by U.S. President-elect Donald Trump, whom he admires, and would support a government that emulates that of Italy’s Giorgia Meloni.
“We want peace, the war must end so we stop being afraid,” 76-year-old Valentin Ion said after voting in Bucharest.
“Politicians must be more understanding and give money to the needy.”
Romania has the EU’s largest share of people at risk of poverty. Ciolacu’s coalition government of his Social Democrats (PSD) and centre-right Liberals has raised the minimum wage and increased pensions twice this year, but high budget spending has swollen deficits and kept inflation high.
“I am taking my parents and my children to go vote for PSD, it is the best party, Marcel Ciolacu gave us so much,” said Vasile Popa, 46.
Since Russia attacked Ukraine in 2022, Romania has enabled the export of millions of tons of grain through its Black Sea port of Constanta and provided military aid, including the donation of a Patriot air defence battery.
FAMILY VALUES
“The outcome is still very difficult to predict due to the high concentration of candidates and the splitting of the centre-right vote,” said Sergiu Miscoiu, a political science professor at Babes-Bolyai University.
Most candidates, he said, have campaigned on conservative messages such as protecting family values.
“Mainstream party candidates have a very catch-all message, on the one hand the nation, the army, religion and so on. On the other hand, we see a commitment to Europe, although it is seen more as a revenue source than an inspiration for values.”
Outgoing two-term president Klaus Iohannis, 65, had cemented Romania’s strong pro-Western stance but was accused of not doing enough to fight corruption.
Romania’s president, limited to two five-year terms, has a semi-executive role which includes heading the armed forces.
Stock Markets
Israeli army orders Gaza City suburb evacuated, spurring new wave of displacement
By Nidal al-Mughrabi
CAIRO (Reuters) -The Israeli military issued new evacuation orders to residents in areas of an eastern Gaza City suburb, setting off a new wave of displacement on Sunday, and a Gaza hospital director was injured in an Israeli drone attack, Palestinian medics said.
The new orders for the Shejaia suburb posted by the Israeli army spokesperson on X on Saturday night were blamed on Palestinian militants firing rockets from that heavily built-up district in the north of the Gaza Strip.
“For your safety, you must evacuate immediately to the south,” the military’s post said. The rocket volley on Saturday was claimed by Hamas’ armed wing, which said it had targeted an Israeli army base over the border.
Footage circulated on social and Palestinian media, which Reuters could not immediately verify, showed residents leaving Shejaia on donkey carts and rickshaws, with others, including children carrying backpacks, walking.
Families living in the targeted areas began fleeing their homes after nightfall on Saturday and into Sunday’s early hours, residents and Palestinian media said – the latest in multiple waves of displacement since the war began 13 months ago.
In central Gaza, health officials said at least 10 Palestinians were killed in Israeli airstrikes on the urban camps of Al-Maghazi and Al-Bureij since Saturday night.
Adding to the miseries of Gaza’s 2.3 million people, most of whom have been repeatedly displaced, heavy winter rain flooded hundreds of tents across the enclave, spoiling food and sweeping away plastic and cloth sheeting that had protected them against the elements.
“We ran in the middle of the night, the rainwater flooded the tent, the food is gone, the kids screamed and I am afraid they will get sick,” Rami, 37, a Gaza City man displaced at a former soccer stadium, told Reuters via a messaging app.
The Palestinian Civil Emergency Service said thousands of displaced people were impacted by the seasonal flooding and demanded new tents and caravans from aid donors to shield them.
HOSPITAL DIRECTOR WOUNDED BY GUNFIRE
In north Gaza, where Israeli forces have been operating against regrouping Hamas militants since early last month, health officials said an Israeli drone dropped bombs on Kamal Adwan Hospital, injuring its director Hussam Abu Safiya.
“This will not stop us from completing our humanitarian mission and we will continue to do this job at any cost,” Abu Safiya said in a video statement circulated by the health ministry on Sunday.
“We are being targeted daily. They targeted me a while ago but this will not deter us…,” he said from his hospital bed.
Israeli forces say armed militants use civilian buildings including housing blocks, hospitals and schools for operational cover. Hamas denies this, accusing Israeli forces of indiscriminately targeting populated areas.
Kamal Adwan is one of three hospitals in north Gaza that are barely operational as the health ministry said the Israeli forces have detained and expelled medical staff and prevented emergency medical, food and fuel supplies from reaching them.
In the past few weeks, Israel said it had facilitated the delivery of medical and fuel supplies and the transfer of patients from north Gaza hospitals in collaboration with international agencies such as the World Health Organization.
Residents in three embattled north Gaza towns – Jabalia, Beit Lahiya and Beit Hanoun – said Israeli forces had blown up hundreds of houses since renewing operations in an area that Israel said months ago had been cleared of militants.
Palestinians say Israel appears determined to depopulate the area permanently to create a buffer zone along the northern edge of Gaza, an accusation Israel denies.
Israel’s campaign in Gaza has killed more than 44,000 people, uprooted nearly the entire population at least once, according to Gaza officials, while reducing wide swathes of the narrow coastal territory to rubble.
The war erupted in response to a cross-border attack by Hamas-led militants on Oct. 7, 2023 in which gunmen killed around 1,200 people and took more than 250 hostages back to Gaza, according to Israeli tallies.
(Reporting and writing by Nidal al-Mughrabi; editing by Mark Heinrich)
Stock Markets
Green activists in S. Korea demand tough action on plastic waste at UN talks
By Minwoo Park and Daewoung Kim
BUSAN, South Korea (Reuters) – Hundreds of environmental campaigners marched on Saturday in the South Korean city of Busan to demand stronger global commitments to fight plastic waste at U.N. talks in the city next week.
About a thousand people, including members of indigenous groups, young people and informal waste collectors, took part in the rally, the organiser said, with some carrying banners saying “Cut plastic production” and “Drastic plastic reduction now!”.
The activists marched around the Busan Exhibition and Convention Centre, where the fifth session of the Intergovernmental Negotiating Committee (INC-5) will take place from Monday to discuss a legally binding global agreement on plastic pollution.
Debate is expected to focus on whether the deal should seek to slash production, while major producers such as Saudi Arabia and China have said in previous rounds that it should prioritise less contentious strategies, such as waste management.
“We are here with Greenpeace and our allies in the Break Free from Plastic movement to represent the millions of people around the world that are demanding that world leaders address plastic pollution by reducing the amount of plastic that we produce in the first place,” said Graham Forbes, global plastic campaign lead at Greenpeace.
People from different countries and of all ages took part in Saturday’s rally and some wore elaborate, decorated hats made from discarded plastic items.
“It looks like the Earth, and a living creature, because I wanted to say our living creatures are being affected by plastic pollution,” said Lee Kyoung-ah, 52, who was wearing a hat made of abandoned plastic buoy.
Lee Min-sung, 26, said he also hoped to see changes in everyday consumer habits.
“I hope the culture of using ‘reusables’ becomes a cool, trendy movement, as that will reduce (waste) little by little,” said Lee, who brought his lunch from home in a glass container.
“I will pick up trash more often, whenever I have time, and throw away less to save the Earth,” said fourth-grader Kim Seo-yul, who flew from her home in Jeju Island to join the march.
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