FILE PHOTO: The Reserve Bank of India (RBI) Governor Urjit Patel pauses during a news conference after a monetary policy review in Mumbai, India, December 5, 2018. REUTERS/Francis Mascarenhas
March 19, 2019
By Suvashree Choudhury
MUMBAI (Reuters) – Economists raised concerns over a sharp slowdown in Indian economy and pitched for a monetary policy boost to support growth at a meeting with the nation’s central bank chief on Tuesday, according to three participants.
Reserve Bank of India Governor Shaktikanta Das met more than a dozen economists to get their views on the economy ahead of the Monetary Policy Committee (MPC) decision due on April 4.
Most economists expect the six-member MPC to cut the repo rate by 25 basis points for the second time in a row next month to 6.00 percent, a level last seen in August 2017.
While the economists did not specify the extent of rate cut that the RBI could consider, one of them called for a 50-basis- point reduction, one of the participants said.
“Most of the participants said that monetary policy needs to do the heavy lifting to boost growth as there was no space for fiscal expansion,” another participant said.
The meeting under Das, who took charge in December, was in sharp contrast to the previous ones under former governor Urjit Patel, who was slightly reclusive and preferred to meet a small group of 5-6 economists. Das’ style has, however, been more open and communicative.
India’s economy expanded by 6.6 percent during October-December, its slowest pace in five quarters, on weak consumer demand and investments, dealing a major blow to Prime Minister Narendra Modi as he seeks a second term in office at a general election that kicks off next month.
Slowing growth has hit the federal government’s tax collections, constraining its ability to substantially boost spending ahead of elections.
However, neither Das nor any RBI official from the monetary policy department gave any indication of their thoughts or views, as is typical in such big-group meetings.
Economists and strategists spoke of several issues including drought, liquidity management, exchange rate, inflation, growth, bank credit growth, real interest rates and monetary policy transmission.
“The meeting went on for two-and-a-half hours as there were many participants,” said another economist who attended the meeting.
“But they didn’t say a single word on these topics.”
The RBI did not respond to an email seeking comment on the meeting with economists.
Some economists pointed out that food inflation could begin inching up after September if monsoon rains were not sufficient, but was unlikely to push retail inflation past the RBI’s 4 percent target.
Consumer inflation was at 2.57 percent on-year in February as food prices continued to fall for a fifth straight month.
The economists also raised concerns over a slowdown in global growth that has hurt India’s exports. India’s outbound shipments grew 2.4 percent annually in February, slower than 3.7 percent in January.
“Overall, the view was that the downside risks to growth have increased since the last policy while inflation risks have remained muted,” said a third participant.
“Not many of us clearly specified how much rate cut we wanted, but we presented the facts to make it clear to RBI that there was a need for a big boost to the economy.”
(Reporting by Suvashree Choudhury; Editing by Shreejay Sinha)
FILE PHOTO: The logo of Germany’s biggest retailer Metro AG is pictured at a Metro cash and carry in Berlin in this June 10, 2009 file photo. REUTERS/Fabrizio Bensch/Files
March 19, 2019
By Kane Wu and Julie Zhu
HONG KONG (Reuters) – German wholesaler Metro AG has kicked off the sale of its China operations by calling for bids, in a deal that would value the business at between $1.5 billion and $2 billion, two people with direct knowledge of the deal said.
Metro, which owns 95 stores in China and real estate assets in major cities such as Beijing and Shanghai, is planning to offload a majority stake in its China business, said the people.
The sale move is part of a global reorganization of the wholesaler and comes as China’s wholesale and retail sectors are experiencing disruption from e-commerce players.
Metro’s China business could yet be valued at up to $3 billion, said two separate sources with direct knowledge of the matter.
Potential bidders include electronics retailer Suning Holdings Group, supermarket chain operators Wumart Stores Inc and Yonghui Superstores, according to three of the people.
Private equity firms such as Hillhouse Capital Group and Bain Capital are also studying a potential deal, they added.
Property makes up the bulk of the value in Metro’s China business, the people said, cautioning, however, that there is a large gap between price expectations among buyers and the seller.
A Metro spokeswoman in Germany said the company is in talks with potential partners concerning the further development of its China business but declined to comment on details of its exchanges with potential partners or the sale process.
Bain and Suning declined to comment. Yonghui and Hillhouse did not immediately respond to requests for comment. Calls to Wumart went unanswered.
First-round, non-binding bids are due in the second week of April, said two of the people. Citigroup and JPMorgan are advising Metro, the people said. The banks declined to comment.
All the sources declined to be named as the deal talks are not public.
E-commerce giant Alibaba Group Holdings has also been in talks with Metro about taking a stake in the China business, Reuters previously reported.
Tech giants such as Alibaba and Tencent have been investing in supermarkets and shopping malls to help develop their online-to-offline strategy.
Alibaba in 2015 poured $4.6 billion into Suning’s listed entity – Suning.Com Co Ltd and holds a 19.99 percent stake, its biggest step towards integrating online and store-based shopping at the time.
Tencent, which has invested 4.2 billion yuan in a 5 percent stake of Yonghui, is also forming a partnership in China with Europe’ s largest retailer Carrefour.
The German wholesaler opened its first China store in Shanghai in 1996 and now has over 11,000 employees in the country. Its sales in the country reached 2.7 billion euros ($3 billion) in the financial year of 2017-2018, according to its website.
Once a sprawling retail conglomerate, Metro has been restructuring in recent years to focus on its core cash-and-carry business, selling Kaufhof department stores and then splitting from consumer electronics group Ceconomy.
Metro is also trying to offload its loss-making Real hypermarkets chain.
(Reporting by Kane Wu, Julie Zhu and Sumeet Chatterjee in Hong Kong; Additional reporting by Matthias Inverardi in DUESSELDORF; Editing by Jennifer Hughes and Muralikumar Anantharaman)
Andrew Kerr | Investigative Reporter
Democratic Rep. Alexandria-Ocasio Cortez and her top aide are no longer board members of the outside PAC credited with orchestrating her political rise, according to a corporate document filed Friday to a Washington, D.C., agency.
The New York Democrat and her chief of staff, Saikat Chakrabarti, who served as her campaign chair, joined the board of Justice Democrats in December 2017, according to the political action committee’s website. It also said the two held “legal control over the entity” at the same time it was playing a key role in supporting Ocasio-Cortez’s campaign prior to her shock victory over incumbent Democratic Rep. Joe Crowley in June 2018.
Attorneys for Ocasio-Cortez said she was removed from Justice Democrats’ board in June 2018, but she was listed an “entity governor” of the PAC as recently as March 14, according to corporate filings, The Daily Caller News Foundation previously reported. (RELATED: Ocasio-Cortez Has Ties To A Dark Money Group)
Ocasio-Cortez and Chakrabarti were officially removed from Justice Democrats’ board on March 15, according to a corporate document filed that day to the Washington, D.C. Department of Consumer and Regulatory Affairs.
It’s unclear why it took Justice Democrats more than eight months to formally remove Ocasio-Cortez from its board. The PAC did not respond to a request for comment.
Ocasio-Cortez never disclosed to the Federal Election Commission (FEC) that she and Chakrabarti controlled Justice Democrats while it simultaneously supported her primary campaign.
If the FEC finds that her campaign and the PAC were operating in affiliation, it could result in “massive reporting violations” or potentially even jail time for Ocasio-Cortez and Chakrabarti, former FEC Commissioner Brad Smith previously told TheDCNF. Another former FEC commissioner, Hans von Spakovsky, wrote in a March 10 Fox News op-ed that he believes there’s sufficient evidence to “justify opening a criminal investigation” into Ocasio-Cortez.
Rojas, Justice Democrats’ executive director, was a field organizer for the Ocasio-Cortez campaign in 2018 while she was also serving as campaign director for the PAC. Chakrabarti preceded Rojas as executive director.
Drummer is the executive director of New Consensus, a nonprofit group that played a key role in developing the Green New Deal.
The Green New Deal was written in a single weekend in December by New Consensus, Justice Democrats and Ocasio-Cortez staffers, along with the Sunrise Movement, a climate advocacy organization.
“We spent the weekend learning how to put laws together,” Chakrabarti told The New Yorker in January. “We looked up how to write resolutions.”
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FILE PHOTO: The logo of Foxconn, the trading name of Hon Hai Precision Industry, is seen on top of the company’s building in Taipei, Taiwan, March 30, 2018. REUTERS/Tyrone Siu/File Photo
March 18, 2019
(Reuters) – Foxconn Technology Group Ltd said on Monday it will complete work on a new factory in Wisconsin to assemble liquid crystal display screens and start production before the end of next year.
Foxconn said the next phases of factory construction will begin by this summer “and the facility will begin production in the 4th quarter of 2020.”
Foxconn initially planned to manufacture advanced large-screen displays for TVs and other consumer and professional products at the Wisconsin plant. It later said it would build smaller Generation 6 LCD screens instead.
The initial Gen6 facility will manufacture screens for education, medical and healthcare, entertainment and sports, security, and smart cities products, Foxconn said Monday.
In February, Foxconn reiterated it would still build a factory in Wisconsin after the company’s chairman spoke to U.S. President Donald Trump, following a Reuters report the Taiwanese company was reconsidering its plans.
Reuters reported in January that Foxconn was reconsidering making LCD panels at a planned $10 billion Wisconsin campus and instead intended to hire mostly engineers and researchers there.
Foxconn has stopped using the $10 billion figure in recent releases and has not responded to questions about how much it now plans to invest in Wisconsin.
The planned 20-million-square-foot campus marked the largest investment for a brand new location by a foreign-based company in U.S. history when it was announced at a White House ceremony in 2017. It was praised by Trump as proof of his ability to revive American manufacturing.
Heavily criticized in some quarters, the Foxconn project was championed by Wisconsin’s then governor, Scott Walker, a Republican who helped secure around $4 billion in tax breaks and other incentives before leaving office. Critics called the deal a corporate giveaway that would never result in the promised manufacturing jobs and said it posed serious environmental risks.
The Milwaukee Journal Sentinel reported Monday that much work on the Foxconn complex appeared to have halted over the last two months.
After the Reuters report in January, Foxconn, a major supplier to Apple Inc, issued a statement saying the global market environment had changed since the project was first announced and “necessitated the adjustment of plans for all projects, including Wisconsin.”
(Reporting by David Shepardson; Editing by Tom Brown)
On Tuesday, U.S. Rep. Carolyn Maloney (D-NY) unabashedly embraced the tactics behind one of the most shameful policies of the Obama era, openly using the guise of her federal authority to berate and not so subtly threaten a bank for lawfully serving businesses that don’t reflect her political views.
While the media did their best to protect Barack Obama and his administration from any hint of scandal, two gun related issues managed to stain the White House with considerable and widespread disrepute.
One concerned a program to secretly “walk” guns from American firearm dealers directly into the clutches of ruthless Mexican drug cartels, while at the same using the resulting violence as a pretext to call for increased firearm regulation in the U.S. The officials involved dubbed this Operation Fast & Furious. It was only the death of U.S. Border Patrol Agent Brian Terry, killed in a shootout that involved one of the “walked” guns, that finally forced the issue into the national consciousness.
The other scandal involved federal regulators pressuring banks and payment processors to sever ties with businesses that were completely lawful but that offended anti-gun sensibilities. These included members of the gun industry. This program was known as Operation Choke Point (OCP), and while no fatalities have been attributed to it, the scheme struck at the heart of the rule of law.
In the case of OCP, Department of Justice and Federal Deposit Insurance Company officials provided sworn testimony to Congress denying that regulators were pressuring banks to drop business the regulators found morally objectionable. Apparently, they suggested, the banks just misunderstood the “risk management” guidance they were being provided. In time (after considerable damage had already been done, and the banks thoroughly understood their unwritten marching orders), guidance documents were revised to “clarify” the regulators’ “true intent.”
But an oversight hearing by the House Financial Services Committee on Tuesday provided one of the clearest and most shocking examples to date of how anti-gun Democrats are now willing to embrace as official policy what was still treated as scandal under the Obama administration.
The title of the hearing was “Holding Megabanks Accountable: An Examination of Wells Fargo’s Pattern of Consumer Abuses.” Wells Fargo, not coincidentally, provides banking services to the NRA.
The only witness at the four hour plus hearing was Wells Fargo President and Chief Executive Officer Timothy J. Sloan. Mr. Sloan had the unenviable task of serving as punching bag during an extended production of Political Outrage Theatre. The entire premise of the hearing was that Wells Fargo might very well have to endure yet more regulation and oversight – or perhaps be broken up altogether – unless Mr. Sloan provided satisfactory answers to committee members’ questions about the bank and its business practices.
Maloney, for her part, excoriated Mr. Sloan and Wells Fargo for refusing to follow the lead of other national banks that had refused or severed business with members of the gun industry that did not “voluntarily” adopt certain gun control “best practices” that exceed the requirements of federal law.
These practices include banning long gun purchases by young adults eligible for military service and refusing to recognize the 3-day default transfer option that gun dealers may exercise if the FBI does not complete a background check. They also just happened to mirror policy goals that anti-gun Democrats – a category that includes Maloney herself – have been pursuing through legislation they have not to date been successful in enacting.
Maloney, in other words, was not accusing Wells Fargo of having done anything illegal by transacting with members of the firearm industry. Rather, she was criticizing the bank for not imposing anti-gun rules that Congress itself has failed to adopt.
Maloney noted that Wells Fargo does have corporate “human rights” practices that in some cases exceed legal and industry standards. She then mentioned the Parkland massacre, as if Wells Fargo were somehow complicit in the acts of a deranged murderer who had nothing to do with the bank and who had been given authorization to buy the gun he used in his crime by the federal government itself via its background check system.
“Why,” Maloney demanded to know, “does Wells Fargo continue to put profits over people by financing companies that are making weapons that are literally killing our children and our neighbors? … How bad does the mass shooting epidemic have to get before you will adopt common sense gun safety policies like other banks have done?”
Given the backdrop of Operation Choke Point, Maloney might as well have asked, “Federal regulators and big city newspapers have browbeaten your competition into submission on the issue of servicing firearm industry clients. How dare you defy their wishes and continue to do so?” She also invoked the shibboleth that school shootings are increasing, a premise that research refutes.
Mr. Sloan calmly answered, “We don’t put profits over people. We bank many industries across this country.” He continued, “We do our best to ensure that all of our customers who we bank follow the laws and regulations that are in place on a local and a state and a national level.”
Maloney then interrupted, insisting that the bank’s commitment to gun control should be as strong as its commitment to human rights.
Mr. Sloan, however, stood his ground. “We just don’t believe that it is a good idea to encourage banks to enforce legislation that doesn’t exist.”
He didn’t add, but he could have, that respect for human rights also necessitates respect for the fundamental rights of self-preservation and self-protection.
The entire exchange can be seen on this video, starting at 48:03.
Needless to say, no business in America could survive if it had to comply not just with all the binding laws that regulators foist upon the country’s companies and employers but with the personal sensibilities and politics of all 535 federal legislators, plus those of thousands of federal bureaucrats.
Nor could any business survive if it had to answer for every unaffiliated person who abused or misused one of its products or services.
That is why America is often said to be a country of laws, not men. That principle has provided the most stable and prosperous economy and business environment the world has ever known.
That stability is threatened, however, by those like Maloney and others who would rule by intimidation and humiliation rather than by duly enacted legislation.
Established in 1975, the Institute for Legislative Action (ILA) is the “lobbying” arm of the National Rifle Association of America. ILA is responsible for preserving the right of all law-abiding individuals in the legislative, political, and legal arenas, to purchase, possess and use firearms for legitimate purposes as guaranteed by the Second Amendment to the U.S. Constitution.
Source: The Daily Caller
President Obama’s Car Allowance Rebate System (CARS), more popularly known as “Cash for Clunkers,” is now a decade old.
For those with short memories or those utilizing the healthy defense mechanism of repression, CARS, enacted by Congress in the summer of 2009, was a Keynesian-inspired stimulus package consisting of a $3,500 or $4,500 subsidy to those willing to part with their inefficient used vehicles and “trade” them for newly manufactured cars and trucks with better mileage ratings. Congress initially appropriated $1 billion for what was to be a five month program, both to stimulate new car sales and supposedly improve air quality. Because the initial $1 billion was exhausted in a matter of days, Congress appropriated another $2 billion, the balance of which ran out well short of the five month stimulus period. Per the legislation, all vehicles traded in were immediately made inoperable and junked, their engines frozen with sodium silica.
Not surprisingly, this interventionist program was a massive policy failure for several very predictable reasons.
First, no economy is made better off by destroying existing resources. Contrary to conventional myth, production of soon-to-be-destroyed-war-goods during World War II did not propel the United States out of the throes of the Great Depression — and neither did euthanizing 690,114 operational vehicles “jump start” the U.S. auto industry in 2009. Both endeavors merely redirected resources to manufacturing sectors out of touch with genuine consumer demand.
Bastiat’s “broken window fallacy” demonstrates how society is never made better off by destroying goods. In the case of the automobile market, instead of having hundreds of thousands of operational used cars with some market worth, we have government-engendered malinvestment in the production of new vehicles not genuinely demanded by consumers. The average age of a used light vehicle on the road today is 11.6 years, versus 10.5 in 2009. Does it make economic sense to call for cars more than a decade old to be destroyed today? My own household would lose two perfectly good vehicles and incur much higher new car and insurance payments.
Second, we have distortions in the market because we can’t know what Cash for Clunkers participants might have purchased (or not purchased) instead of new cars What about less affluent consumers who now face a significantly diminished supply curve (and thus higher prices) for a used vehicle because Cash for Clunkers reduced the supply of older, cheaper used cars(and total vehicles for sale, for that matter) by nearly 700,000 units? Did significant fuel savings and cleaner air result from the removal and destruction of these vehicles? Experts say no; people tend to drive older vehicles sparingly or very short distances. A reliable but inefficient old vehicle which gets someone back and forth to a job that is, say, three miles away, may very well make it possible for the owner to keep a job. Anecdotally, my father purchased a new full-sized pickup in 1982 which he drove sparingly for 5 years. I inherited it with only 26,000 miles from my mother in 2002, then sold it 15 years later with 52,000 miles.. On a good day with a heavy tailwind, the truck might have gotten about 13 miles per gallon on the highway. But when was it driven by either my father or me … when only a full sized pickup truck would suffice, such a vehicle often seemed invaluable.
Third, only the price mechanism can rationally allocate resources. Producers and consumers meet at a price; prices in turn signal the need for more or less investment in a particular good or service.
Nobody in Washington DC knows the right number of vehicles to have on American roads, the optimal ratio of new versus used vehicles, or the correct number of each type of vehicle. These choices are best made by consumers who know intimately their own personal needs and constraints. Stimulating new car sales with subsidies, as the Obama administration did 10 years ago, could only generate malinvestment. Not only were new car sales per capita trending down at the time the CARS program, they had been trending down since 1975. Markets reflected genuine consumer preferences; DC reflected a political preference for auto makers and lenders.
The one recent exception to that forty-year downtrend of fewer new car sales per capita was the post-recession sales increase that occurred between 2009 and 2015. While some of this increase is attributable to drivers who weathered the recession but could no longer make do with older cars, the temporary increase in auto sales following the Cash for Clunkers “stimulus” did little more than the mimic the rise in the general overall consumer spending during that same, post-2009 time period.
Also contributing to the post-recession increase in auto sales was an increase in the number of households over that same period of time. While the number of autos per U.S. household actually trended down slightly from 2.05 autos per household in 2008 to roughly 1.95 in 2018, the number of total households increased over that same period — and at a significantly greater rate than the number of vehicles per household went down, accounting for more total cars in use. Demographics and consumer preferences, not Cash for Clunkers, created the post-recession spike in new car sales.
Since 2016, however, sales have dropped off. This is what we would expect given higher interest rates, higher auto prices, increased telecommuting, and riedesharing programs like Uber. Millennials, already strapped with college debt, appear less interested in new car ownership than their Baby Boomer parents.
And perhaps most of all, newer cars tend to be more reliable and longer-lasting. None of this bodes well for auto manufacturers.
The Cash for Clunkers program destroyed valuable resources, misallocated other resources, and made life difficult for cash-strapped drivers needing a low-priced car—not to mention mechanics and salvage yard operators who rely on clunkers for their livelihood. It, did nothing to rejuvenate the new car manufacturing industry. Before the next round of intervention we would be wise to reflect on Bastiat and learn the harsh lesson of Cash for Clunkers.
Policies pushed by far-leftist Democrats will literally end the national sovereignty of the USA.
Michael Bastasch | Energy Editor
- D.C. Attorney General Karl Racine is preparing for a potential lawsuit against ExxonMobil over climate change.
- Racine’s office alleges Exxon failed to inform D.C. consumers that gasoline combustion contributed to global warming.
- “Exxon has also engaged or funded efforts to mislead DC consumers” about global warming, Racine’s office wrote.
District of Columbia Attorney General Karl Racine is preparing for potential legal battle against ExxonMobil, the world’s largest oil company, for allegedly covering up global warming science from the public.
Exxon’s alleged wrongdoing includes failing to tell consumers of its gasoline that fossil fuels contribute to global warming, according to documents from Racine’s office.
Racine indirectly acknowledged D.C.’s planned investigation into Exxon in a tweet linking to a solicitation for outside “legal services in support of [the Office of the Attorney General for the District of Columbia’s] investigation and potential litigation against ExxonMobil Corporation” and affiliates.
The document alleged “potential violations of the Consumer Protection Procedures Act (CPPA) or other District laws in connection with Exxon’s statements or omissions about the effects of its fossil fuel products on climate change.”
“OAG has determined this conduct should the subject of an investigation or litigation against Exxon to secure injunctive relief stopping violations of the CPPA or other District law, as well as securing consumer restitution, penalties and the costs of any litigation,” reads the document.
Passionate about protecting our environment? Join our team!
Our office is seeking outside legal counsel to support OAG’s climate change work: https://t.co/ZMZpEdcEuk
— AG Karl A. Racine (@AGKarlRacine) March 15, 2019
Racine’s office is looking for a senior lawyer, junior lawyer and a paralegal to handle its Exxon investigation. Investigators would work on a five-year contract, with options to extend, in exchange for a percentage of any winnings D.C. may get in a legal settlement or court victory.
However, the D.C. attorney general’s office already has a full-time lawyer dedicated to climate change and environmental investigations. That employee is funded through a controversial grant program from former New York Mayor Michael Bloomberg’s personal foundation. (RELATED: Just 12 Years Left? Let’s Break Down The Alarmist Talking Point Fueling Kids’ Climate Change Strikes)
At least eight other Democratic attorneys general offices have or sought to hire Bloomberg-funded legal fellows. Critics have called this arrangement “law enforcement for hire,” and some offices have tried to withhold information about their Bloomberg-funded fellows.
Racine’s office would not say if the Bloomberg-funded lawyer would play a role in the investigation or potential lawsuit against Exxon.
“Thank you for your inquiry, however we will decline to comment on confidential enforcement activity,” Racine’s office said in an emailed statement to The Daily Caller News Foundation.
If Racine takes Exxon to court, he would join a handful of Democratic attorneys general to do so, including New York Attorney General Barbara Underwood and Massachusetts Attorney General Maura Healey.
Democratic attorneys general began investigating Exxon’s climate change stance years ago, prodded by environmental activists and journalists who claimed the company “knew” for decades fossil fuels could warm the planet, but funded groups to challenge climate science and regulations.
Exxon has denied allegations it tried to mislead the public on climate science, and today the company supports taxing carbon dioxide emissions and funding for alternative fuels.
Racine’s investigation focuses on the oil giant’s alleged disclosures to consumers at gas stations in Washington, D.C. — though Exxon does not own or operate any retail gas stations anymore.
“Since at least the 1970s, Exxon has been aware that its fossil fuel products were significantly contributing to climate change, and that climate change would accelerate and lead to significant harms to the environment in the twenty-first century,” reads D.C.’s solicitation for attorneys.
Racine’s office continued that “in connection with selling gasoline to DC consumers and others, Exxon has failed to inform consumers about the effects of its fossil fuel products on climate change.”
“Exxon has also engaged or funded efforts to mislead DC consumers and others about the potential impacts of climate change,” reads the document. “This conduct may violate the District’s CPPA as well as other District laws.”
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FILE PHOTO: A sign outside the headquarters of JP Morgan Chase & Co in New York, September 19, 2013. REUTERS/Mike Segar
March 18, 2019
By David Henry
NEW YORK (Reuters) – Responding to calls for more bank services for low-income consumers, JPMorgan Chase & Co on Monday began offering checkless accounts with access to its mobile app, branches and ATMs for $4.95 a month and no minimum balance.
The accounts come with debit cards, digital payments and free check cashing, but do not allow overdrafts.
Fees for overdrafts generated significant revenue for banks in the past. They have angered customers, brought down the wrath of politicians and discouraged people with low incomes from using banks.
Thasunda Duckett, chief executive of Chase Consumer Banking, said she hoped the new accounts will attract more low-income individuals and people who have never had bank accounts.
“The very first step in building financial health really starts with a bank account,” Duckett said.
The annual cost of $60 for the new accounts compares with charges of $200 to $500 a year at check cashing and money order services, she said.
Some 6.5 percent of U.S. households had no one with a bank account in 2017, according to a study by the Federal Deposit Insurance Corp.
Regulators have been pushing banks to do more to attract low-income customers. “Financial inclusion” has become a rallying cry for groups trying to help people out of poverty.
JPMorgan’s move comes after competitors Bank of America Corp and Citigroup Inc introduced similar accounts.
The new accounts mark an expansion of low-cost services because JPMorgan has 16,000 ATMs and 5,000 U.S. branches, second only to Wells Fargo & Co.
Since 2012, JPMorgan has offered a prepaid debit card with many banking services for $4.95 a month. But customers said that card, called Liquid, came up short. It could not be used for Uber taxi rides and car rentals, for example.
The new account, called Secure, offers those features.
Financial technology startups, such as Chime and SoFi, offer accounts with large networks of ATMs and without monthly fees. Chase’s fee, Duckett said, provides ATMs that accept checks and bankers to question in person.
The accounts will make “some money,” she said, but be less profitable than the bank’s other businesses.
Before the financial crisis, banks widely offered free checking, making money on overdrafts and merchant fees on debit cards. Post-crisis reforms slashed those fees and free accounts were cut back.
Now that banks have built digital tools for better-off customers, the services can be extended to people with lower incomes.
(Reporting by David Henry in New York Additional reporting by Anna Irrera; Editing by Tom Brown)
FILE PHOTO: Illustration photo of the Dianrong logo on the company’s website April 13, 2017. REUTERS/Thomas White/Illustration
March 18, 2019
By Shu Zhang
SINGAPORE (Reuters) – Dianrong, one of China’s biggest peer-to-peer (P2P) lenders which is laying off staff and shutting stores, blamed the government for its troubles saying the absence of clear-cut policies was proving to be a heavy burden.
“Some people wonder why Dianrong’s growth has slowed in the past two years. It was not because we did not want to or could not grow. It was because we were told not to grow,” Guo Yuhang, Dianrong’s co-founder, said in an internal memo seen by Reuters.
“While the industry has expanded quickly to a large and complex scale over the years, regulatory directions keep changing and different regions have different rules,” Guo said, in rare criticism of policy-making in China.
Dianrong was shutting down 60 of its 90 offline stores and laying off an estimated 2,000 employees, Reuters reported earlier this month.
The Shanghai-based company was co-founded by Soul Htite, who was also behind U.S. online lender LendingClub Corp, and is backed by Singapore sovereign fund GIC Pte Ltd and Standard Chartered Private Equity.
Beijing’s multi-year crackdown on risky lending practices and excessive leverage have caused a wave of P2P collapses and triggered protests by angry investors who lost their savings.
“Grey rhino” risks, or highly obvious yet ignored threats, are on the rise, including risks from internet finance such as P2P lenders, a central bank official wrote in an official publication on Monday.
The industry could face a fresh wave of regulatory scrutiny after several fintech companies were slammed by state-run CCTV during the country’s annual consumer rights day TV show on Friday.
Dianrong, which expanded rapidly in 2017-2018 in a loose regulatory environment, had to cut back in the second half of last year, Guo said in the memo.
He added that many highly promising businesses Dianrong developed as part of its aggressive expansion have turned into “heavy burdens with unbearable high costs” for the company as regulations unexpectedly tightened.
The company’s outstanding transaction volume has shrunk to 10 billion yuan ($1.49 billion) from its peak of 14 billion yuan, Guo said. Some employees were not paid for two months, he said.
China’s central bank has yet to respond to a faxed request seeking comment.
The central bank said earlier this month that it would gradually set up a system of rules to regulate fintech and cultivate conditions conducive to the development of the industry.
“We hope regulators can give the industry a clear, and definite timetable, and give guidance and a ray of hope for companies that stick to compliance,” Guo said in the memo.
“The situation of the industry shows that the one-size-fits-all rule will definitely curb innovative businesses.”
Guo did not comment further when contacted by Reuters.
(Reporting by Shu Zhang; Writing by Samuel Shen and Ryan Woo; Editing by Muralikumar Anantharaman)
FILE PHOTO: A Cathay Pacific self check-in machine is displayed at Hong Kong Airport in Hong Kong, China, April 4, 2018. REUTERS/Bobby Yip/File Photo
March 18, 2019
By Jamie Freed
SINGAPORE (Reuters) – Hong Kong’s Cathay Pacific Airways Ltd, in talks to buy low-cost carrier Hong Kong Express Airways, believes budget airlines have a “unique market segment” it does not capture at present, Chief Executive Rupert Hogg said on Monday.
Cathay this month said it was in “active discussions” to acquire the airline controlled by HNA Group Co Ltd.
That would boost revenue and give Cathay access to the growing low-cost travel market at a time when a lack of slots at Hong Kong International Airport has constrained its ability to follow peers like Singapore Airlines Ltd and Qantas Airways Ltd and set up its own budget brand.
“It does interest us,” Hogg told Reuters of the budget airline sector during an interview in Singapore. “We watch Singapore Airlines and Scoot; we can see they are trying to get connectivity between them.”
He declined to comment on the status of talks to acquire Hong Kong Express but said the low prices offered by budget carriers helped to stimulate new travel demand, making it a “unique market segment”.
The potential acquisition comes as Cathay faces a more challenging outlook for revenue growth, according to Hogg.
Higher airfare and cargo rates pushed revenue up 14.2 percent in 2018, helping the airline last week report a swing to a $300 million profit after two years of loss as a turnaround plan helped it cut costs and increase income.
“We’ve had great revenue growth, both cargo and passenger,” he said. “As we look forward we can see the sort of gains in percentage growth terms that we’ve had, by definition it is more difficult to achieve that.”
The 18 analysts polled by Refinitiv I/B/E/S on average expect revenue at the airline to grow 3 percent to HK$114.3 billion ($14.56 billion) in 2019.
Hogg said the airline was investing in technology to better handle schedule disruptions and product improvements such as better meals to help drive passenger revenue growth, but the macro-economic environment was weaker than last year.
“There is a lot of uncertainty,” he said. “Uncertainty is definitely bad for corporate sentiment and investment and travel. And it is bad for consumer sentiment.”
Cargo volume is also weaker than at the same time last year, falling 5.2 percent in January due to a slower Lunar New Year rush than the prior year.
($1 = 7.8495 Hong Kong dollars)
(Reporting by Jamie Freed; Editing by Christopher Cushing)