Aurelia Butler

“It is not surprising that the European Commission proposes placing France (along with four other countries) under Excessive Deficit Procedures (EDP),” notes ING, which believes that the country’s political situation will be complicated and indicators do not suggest the appointment of a prime minister favorable to the president.“Any desire to break with the past will likely run up against the reality of the numbers. And this could happen very quickly, as the European Council is expected to confirm the Commission’s proposal to place France under the EDP by mid-July, and the country will have to propose a fiscal adjustment path by September 20,” adds ING.The legislative elections will choose, between June 30 and July 7, the 577 deputies who will serve in the French Parliament. The far-right National Rally party is leading the polls at the moment.The National Rally has not yet published a detailed budget program, but Jordan Bardella considers it necessary to have a rational approach and conduct an audit of the finances, including France’s social security system, before taking more robust measures.The bloc of the current Prime Minister, Gabriel Attal, tends to indicate in its program, which should be released next week, themes aimed at seeking greater balance in public accounts, with measures to increase revenue and cut spending.The prime minister is appointed by the president of France but requires a majority in the National Assembly to govern.“If the deputies present and vote on a motion of no confidence against the government, the prime minister is obliged to resign. The president can ‘counter-attack’ by declaring a new dissolution of the Assembly. But be careful, this cannot be done within a year of the previous one (June 2025),” clarifies ING.Earlier this month, French President Emmanuel Macron announced that he would dissolve the French parliament and call for legislative elections, after a defeat in the European elections by Marine Le Pen’s far-right party.**With InvestingPro, you know how to choose the best assets even in challenging contexts. You have access to:Use the coupon BEPRO and get an additional discount in the mid-year promotion of Pro and Pro+. Click here! More

WASHINGTON (Reuters) -U.S. bank regulators ordered Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase on Friday to bolster plans for how they could be safely resolved in bankruptcy, and FDIC escalated its concerns about Citi’s blueprint.Specifically, the Federal Reserve and Federal Deposit Insurance Corporation said the banks need to refine their so-called living wills to show how they could safely unwind their derivatives portfolios when they next submit plans to regulators in 2025. Big banks hold derivatives worth trillions of dollars in notional value and potential changes to how they manage the risk, liquidity or contingent liabilities on those portfolios could be extremely expensive. The banks will be required to detail how they will address those shortcomings, which had not been previously flagged, in September. Bank of America did not provide immediate comment. JPMorgan and Goldman Sachs declined to comment. “The Fed is trying to get the banks to dial up these wills correctly,” said Christopher Marinac, director of research at Janney Montgomery Scott. “It just tells us today that the Fed is not happy with the end result, and there’s still work to be done.”CITI DEFICIENCYThe FDIC also escalated its concerns with Citi’s plan to a “deficiency,” meaning the regulator found it not credible, but the Fed did not follow suit. If both regulators had found Citi’s plan deficient, it would have been required to resubmit an improved plan and could have potentially faced additional regulatory restrictions. Reuters previously reported the FDIC would issue the deficiency.The split between regulators on the severity of Citi’s deficiencies means the bank is on notice to make improvements, but not at risk of forced divestitures, TD Cowen analyst Jaret Seiberg said in a note.Following the 2007-2009 financial crisis, big banks were ordered to regularly submit resolution plans to regulators, detailing how they could be safely unwound without requiring government assistance. Those plans are assessed by regulators for credibility and feasibility.Nearly all large banks have faced some sort of critique from regulators on their living wills and been ordered to beef up their plans. For example, in 2016, regulators found road maps from Bank of America, BNY, JP Morgan Chase (NYSE:JPM), State Street (NYSE:STT), and Wells Fargo deficient, and flagged shortcomings for Goldman Sachs and Morgan Stanley. Banks typically are able to address those concerns by submitting amended documents.In a letter to Citi, regulators said weaknesses in its data and controls contributed to inaccurate calculations of the liquidity and capital needed to unwind derivatives positions. The problems relate to issues identified in its 2021 living will, regulators said. They also directed the bank to provide “independent confirmation” that the issues are addressed, controls are functioning and results are reliable when it submits its 2025 plan. Regulators also required Citi to outline its resolution plans for operations outside the U.S. Citi has spent several years working to address regulatory concerns around its data management. Reuters reported in February that the bank received fresh regulatory directives to fix problems in late 2023.”We are fully committed to addressing the issues identified by our regulators,” Citi said in a statement. “While we’ve made substantial progress on our transformation, we’ve acknowledged that we have had to accelerate our work in certain areas, including improving data quality and regulatory processes.” “We continue to have confidence that Citi could be resolved without an adverse systemic impact or the need for taxpayer funds,” Citi said.Shares of JPMorgan, Bank of America, Goldman Sachs and Citigroup all fell about 1% in afternoon trading. When banks next submit plans, the agencies also said they must address contingency planning and obtaining foreign government actions necessary to execute their plans, an apparent nod to struggles regulators faced safely unwinding Credit Suisse when it collapsed last year.Instead of executing its living will, Swiss authorities engineered a takeover of Credit Suisse by UBS, raising questions over problems with such resolution plans.Regulators did not identify problems in plans submitted by Wells Fargo & Co, Bank of New York Mellon (NYSE:BK), State Street or Morgan Stanley. More

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BANGKOK (Reuters) -The Thai government’s 3.753 trillion baht ($102 billion) budget for the 2025 fiscal year passed its first parliamentary vote on Friday, but there will be a series of further votes before it can be enacted.After a three-day debate, the draft budget bill, aimed at kick-starting the economy, passed with 311 votes in favour and 175 against as the Pheu Thai Party-led government commands a majority in the House of Representatives.The 2025 budget for the year starting Oct. 1 projects a 7.8% rise in spending and an increase of 24.9% in the budget deficit to 865.7 billion baht from the 2024 fiscal year.The bill will still need to pass second and third readings in the lower house, expected in August, before being sent for senate and royal approval.Prime Minister Srettha Thavisin has said the expansionary budget was needed to stimulate a sluggish economy, and on Friday said he expected to announce additional stimulus measures early next week.The government is targeting economic growth of at least 3% this year, after last year’s 1.9% expansion lagged regional peers.The government has said some 152.7 billion baht of the 2025 budget would be used to finance its signature 500 billion-baht “digital wallet” handout programme.The scheme, which involves a giveaway of 10,000 baht per person to 50 million Thais to be spent in their communities, has been delayed to the fourth quarter this year due to funding issues. Economists and two former central bank governors have said the programme is fiscally irresponsible.The government has said it will finance the policy from the 2024 and 2025 budgets and with capital from a state-owned bank.The budget debate comes as Srettha faces a Constitutional Court case that could potentially lead to his dismissal. The prime minister denies any wrongdoing, and the next hearing in the case is set for July 10.($1 = 36.72 baht) More

(Reuters) -American Express is buying Squarespace-owned restaurant booking platform Tock for $400 million to expand its foothold in the dining industry, a category that accounted for $100 billion in spending on its cards last year.The all-cash deal, unveiled on Friday, will build upon the credit card giant’s acquisition of online restaurant reservation platform Resy in 2019. Resy helps AmEx cardholders get special access to some restaurants, including exclusive reservations, early notifications or cashback on certain bookings made through the platform.The buyout of Tock will add another 7,000 restaurants, wineries and other hospitality businesses to AmEx’s network, and allow restaurants to better target AmEx’s premium customers who are typically prolific spenders.The credit card giant has often offered more perks to justify charging higher annual fees than its rivals, a strategy seen as crucial to achieving AmEx’s growth targets by helping it appeal to affluent consumers and boost customer engagement. “These experiences help serve as a distribution channel, as they drive new customers to the brand,” William Blair analyst Cristopher Kennedy wrote in a note.AmEx is also buying Rooam, a contactless payments platform used by restaurants, bars, music venues and other businesses, for an undisclosed sum. The acquisitions should support the company’s efforts within the small and medium enterprise market, Kennedy wrote. AmEx views the segment as lucrative despite a recent slowdown in their spending growth. Website-design platform Squarespace paid around $400 million for Tock when it bought it in 2021, about the same amount that it will get from the sale. The deal will turn Squarespace leaner as it prepares to be taken private by Permira in a nearly $6.9 billion transaction. So far this year, AmEx shares have jumped 23%, compared with a near 15% jump for the benchmark S&P 500 index as of Thursday’s close. More