Aurelia Butler

This article is an on-site version of our Moral Money newsletter. Sign up here to get the newsletter sent straight to your inbox.Visit our Moral Money hub for all the latest ESG news, opinion and analysis from around the FT I’m midway through investigative journalist Eyal Press’s excellent book Dirty Work, which examines the often appalling conditions faced by people doing society’s toughest, most thankless tasks, such as slaughterhouse workers.“How we think about this work,” Press writes, “reveals something fundamental about our society — our values, the social order we unconsciously mandate, and what we are willing to have done in our name.”This warning was on my mind as I reported the story below. Delivering meals for DoorDash might sound a lot less brutal than slaughtering cattle. And the rise of the “gig economy” has brought unprecedented levels of convenience for better-off consumers. But it is reshaping the labour market in ways that create a precarious existence for large numbers of low-paid workers. Labour law needs to evolve in response.Our next Moral Money Forum deep-dive report will explore how business and finance are approaching biodiversity risk. We want to hear from our readers. Please share your thoughts through this brief survey.The ‘working poor’ employed by big US companiesDuring my recent trip to New York, I had lunch with Olivier de Schutter, the Belgian legal scholar serving as the UN special rapporteur on extreme poverty and human rights.De Schutter had just delivered a speech at the UN headquarters in which he warned of the dire situation facing the world’s “working poor”, who are below the poverty line despite being employed.Their ranks include millions of struggling workers in developing nations, he noted — but also people working for some of the biggest and most profitable companies in the US.In letters made public this week, de Schutter wrote to ecommerce giant Amazon, retailer Walmart and food delivery service DoorDash, highlighting allegations about inadequate treatment of workers, especially those without permanent contracts, including “gig workers”. He also wrote to the US government to highlight the allegations, as well as wider concerns about the situation of low-paid workers in the country.Amazon has said its workers can choose between ‘a multitude of jobs and shifts’ More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Virgin Media O2 has cut its annual revenue guidance as consumers pull back on spending on new mobile phones and broadband packages amid a cost of living crunch.The UK telecoms group said on Wednesday it expected revenue, adjusted in relation to its 2021 merger and excluding any impact from its fibre-building activities, to be “stable” instead of in a “growth” phase. Virgin Media O2 maintained its outlook for “mid-single digit growth” for earnings before interest, taxes, depreciation and amortisation, also adjusted for the merger and excluding any fibre impact. The company, jointly owned by Liberty Global and Spain’s Telefónica, said adjusted revenue rose 1 per cent to £2.8bn for the three months to September 30, in comparison with the same period last year.Chief executive Lutz Schüler said the most recent quarter had been “a tough environment to navigate” and added that “some consumers tighten[ed] spend, notably across mid-tier TV, home phone and on low-margin handsets”.The group said customers were holding on to mobile devices for longer and that its fixed-line services, which include broadband, TV and home phones, were also affected by changes in household spending. Mobile revenue edged up 1 per cent to £1.5bn, although growth in service revenues supported by price rises was partially offset by a 5 per cent reduction in handset revenues. Tighter household spending offset price increases of almost 14 per cent in its consumer fixed division, where revenue declined 1.5 per cent to £839mn.Virgin Media O2 gained an additional 32,500 net fixed-services customers in the period while its number of contract mobile subscribers increased by a net 50,000.Overall, Virgin Media O2’s third-quarter adjusted earnings before interest, taxes, depreciation and amortisation rose 6 per cent to £1.05bn.Nexfibre is a joint venture owned by Liberty Global, Telefónica and InfraVia Capital Partners through which Virgin Media is building a full-fibre network. More than 250,000 additional premises were passed with fibre in the third quarter and the group expects about 175,000 premises to transfer to the Nexfibre network within the next year as a result of its deal to acquire Upp, a so-called altnet it bought in September. Its owner, the Russian oligarch-backed investment company LetterOne, had been forced to sell the company on national security grounds.Virgin Media O2 also announced it had sold a minority stake in the UK’s largest mobile tower network to a partnership of UK pension funds for about £360mn.The 16.67 per cent stake in Cornerstone Telecommunications Infrastructure, a national network of about 20,000 sites used by both Virgin Media O2 and Vodafone UK, will be acquired by London-based GLIL Infrastructure. Virgin Media O2 will retain ownership of a third of Cornerstone. More

NEW YORK/LONDON (Reuters) – Global fund managers are exploring ways to spread their counterparty risk, with many regularly monitoring the credit ratings of their dealer banks following the recent banking crisis, according to an industry survey released on Wednesday.Concerned that possible future bank failures could cause short-term liquidity squeezes or leave them without a provider for foreign exchange services to make payroll or key vendor payments, 80% of fund managers are now looking to diversify their counterparties, according to the 2023 MillTechFX survey.MillTechFX, the fintech arm of specialist currency manager Millennium Global, surveyed 250 senior decision-makers at global asset management firms in the United Kingdom.Fund managers use counterparties such as banks to trade foreign exchange or hedge currency risks. A counterparty’s failure could put their hedges and the collateral that secures them in jeopardy.That number rises to 100% for chief executives, indicating a strong desire from the heads of these institutions to review their banking setup to ensure proper systems are in place to mitigate the impact of any future crisis, the survey said.An earlier survey of fund managers in North America by MillTech found a similar percentage looking at further diversification.”One of the big lessons for fund managers from recent events in the banking industry is the importance of having access to multiple counterparties,” said Eric Huttman, CEO at MillTechFX.The collapse of several regional and mid-sized U.S. lenders and the Swiss government-orchestrated rescue of Credit Suisse by UBS sent shock waves through global markets. Since then investors across the board have been sharpening their scrutiny of banks and strengthening their cash-management guidelines to plug the gaps exposed in their approach to counterparty risk and liquidity management.Huttman said that many companies may prioritize factors like prices when selecting foreign exchange counterparties but the recent banking crisis shows that “the likelihood of settlement are equally important.”TREASURY MANAGEMENT IN FOCUSSeveral executives at asset management and advisory firms told Reuters that fund managers in private equity and alternative credit have been making their treasury and investment guidelines more robust by adding more banks. They are also clarifying how much deposit they are comfortable leaving at each bank, and specifying how often their policies and counterparties will be reviewed.”It was not considered a high likelihood that some banks were going to go through the types of problems that they had,” said Matthew Pallai, chief investment officer at asset manager Nomura Private Capital.”So, it just makes sense as a risk-mitigation tool to start thinking about how you diversify your exposure to any one of those counterparties.”Danny Olds, a director in the treasury practice section at Lionpoint, a boutique consultancy, said March’s crisis elevated interest in treasury management, a long-overlooked area of the industry.Software provider Hazeltree said there has been increased interest in treasury and liquidity solutions and analytics that look at bank health, provide real-time exposures across various banks and highlight potential areas of concern that aid decision making such as changes in banks’ credit ratings.Similarly, recent research from law firm Latham & Watkins’ Private Capital Report highlighted how some private equity firms were scooping up financial products to rebalance funds across various bank accounts below the $250,000 FDIC insurance limit.”It wasn’t a concern on people’s radar until the March events where that started to play out in real time for some companies and their accounts were frozen,” said Jennifer Kent, partner at law firm Latham & Watkins.(This story has been corrected to fix the description of MillTechFX in paragraph 3) More

The tightening of liquidity conditions, equivalent to a rate hike, has been seen recently due to a significant increase in US bond yields reported by the CME Fedwatch tool. This aligns with the sentiments of Fed officials who appear comfortable with higher long-term yields replacing further rate hikes, as stated by Nomura. No additional hikes are anticipated in this cycle.Fed Chairman Jerome Powell’s upcoming press conference is expected to underline the cumulative tightening that has already occurred. This comes even as the Federal Reserve faces challenges such as persistent labor and inflation data and headwinds faced by average companies and households, despite rapid policy tightening. Morgan Stanley has highlighted these challenges, in addition to pointing out the expansion of the fiscal deficit during full employment, which restricts the Fed’s ability to definitively conclude its tightening cycle.Recent job gains acceleration, a more resilient underlying trend, and positive backward revisions suggest enduring economic growth strength. However, Dalma Capital anticipates that while immediate action from the US Fed is unlikely, it will need to address inflationary pressures soon due to these factors.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More