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Recent Editions
Risk Channel
North America
The Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency have published proposals to relax capital requirements for Wall Street banks which could potentially unleash billions of dollars for lending, share buybacks and dividends. Top regulatory officials appointed by President Donald Trump say rules imposed following the 2008 financial crisis have grown to be too onerous and are hindering lending and the economy. Proposed changes to the "Basel III" and "GSIB surcharge" rules, alongside tweaks to banks' annual "stress test" health checks, will calibrate capital in line with real risks, while still keeping the financial system safe, the officials said. “These changes would strengthen our overall capital framework, which would remain robust under the new regime,” Fed Vice Chair for Supervision Michelle Bowman said. Fed governor Michael Barr was the sole dissenting vote on the proposals. “I fear that, if this much weaker version of Basel III is adopted in the U.S., it could trigger a race to the bottom on standards, harming the global financial system,” he said.
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Risk Channel
UK/Europe
French hotel operator Accor - whose brands include Sofitel, Novotel, and Ibis - has launched an investigation following a report by short-seller Grizzly Research that questioned the group’s human rights practices. The short-seller said it is betting against Accor, alleging some of its hotels ignored red flags strongly suggestive of child trafficking when making bookings in “an obvious sexual context.” Accor said it denies “involvement in the alleged systemic exploitation of human or child trafficking,” adding that it will take “all appropriate measures” and could prosecute parties involved if the allegations are confirmed. Employees and partners working under its various brands are trained to detect and combat sexual trafficking and the exploitation of children, Accor said.
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