Economy

This article is an on-site version of our Disrupted Times newsletter. Sign up here to get the newsletter sent straight to your inbox three times a weekToday’s top storiesMicrosoft hired Sam Altman and Greg Brockman to head up a team conducting artificial intelligence research after the pair were pushed out of OpenAI, the company they co-founded, on Friday. OpenAI has picked Emmett Shear, co-founder of video streaming service Twitch, as its interim chief executive. OpenAI staff have threatened to quit unless Altman is reinstated. Here’s how a dramatic weekend unfolded.Amos Hochstein, the White House’s chief energy adviser, told the Financial Times he was confident that Arab oil producers would not weaponise energy, despite increasing anger in the region over Israel’s bombardment of Gaza. The NHS agreed a deal with global drugmakers to limit the increase in its drug bill to 4 per cent a year from 2027. For up-to-the-minute news updates, visit our live blogGood evening.A self-described “anarcho-capitalist” and radical libertarian who has expressed support for the sale of human organs, referred to his country’s largest trading partner as “murderous”, denounced Pope Francis as a “filthy leftist” and climate change as a “socialist hoax” is president-elect of Argentina.Javier Milei swept to victory in Sunday’s run-off election, promising “drastic changes” to the country’s economic strategy amid its worst crisis in two decades. The first-term congressman emerged as the frontrunner in August after promising — with a chainsaw as prop — to slash spending, “burn down the central bank” and replace the Argentine peso with the US dollar.Although he attempted to rebrand as a “normal guy” ahead of the run-off, Milei came out of the traps pretty quickly in his first day as president-elect, pledging to privatise the national oil company YPF as well as state television and radio. “Everything which can be in private sector hands, will be in private sector hands,” he vowed. The country’s business leaders had struggled to muster enthusiasm for Milei or his opponent, economy minister Sergio Massa, after their preferred candidate Patricia Bullrich was eliminated in October’s first round of voting.The business community will also be worried that Milei’s election, as Alan Beattie notes in today’s Trade Secrets newsletter (for Premium subscribers), might put the whole direction of South American trade in doubt. The long-stalled “cows for cars” treaty between the EU and the Mercosur group of countries (Brazil, Argentina, Uruguay and Paraguay) had been nearing agreement after 20 years of wrangling but, after Milei previously pledged to withdraw Argentina from the bloc, that now looks in jeopardy.The country’s stock market is closed for a public holiday today but US-listed shares in Argentine companies rose after the election result. Bonds also rose, although remaining at levels that indicated investor scepticism about returns.Parliamentary arithmetic and the dire state of the country’s economy pose huge challenges for the insurgent, writes Latin America editor Michael Stott, meaning that some of Milei’s wilder promises were unlikely to be enacted, at least in the short term. Regional presidents who lack congressional majorities often come unstuck, even in better economic circumstances, Stott notes. And even if Milei manages to stave off the country’s slide into hyperinflation, he still has to deal with a vast pile of domestic debt and renegotiate a $44bn deal with the IMF.Still, at least he may have an influential friend to the north come next November. Donald Trump, to whom Milei has frequently drawn comparisons, was quick off the mark with his congratulations: “I am very proud of you,” Trump said. “You will turn your country around and truly Make Argentina Great Again!”Need to know: UK and Europe economyBritish Prime Minister Rishi Sunak promised to cut taxes “over time” ahead of this Wednesday’s Autumn Statement. The FT editorial board said chancellor Jeremy Hunt should use the occasion to prioritise the economy over political pressures. Full details of the statement will be in Wednesday’s DT.Investors are betting on earlier interest rate cuts in the UK and eurozone than previously expected after recent data suggesting both were heading for a period of near stagnation.Brexit negotiator Michel Barnier told the Financial Times in an interview that British ministers did not know the consequences of leaving the bloc. The Israel-Hamas war has reignited the debate in the German government about selling jets to Saudi Arabia, with some arguing that the ban should be lifted, given the kingdom’s role in ensuring regional stability.Need to know: Global economyAmericans are heading into Thanksgiving against an increasingly benign economic backdrop, with food inflation falling and lower petrol prices and airfares. Earnings from some of the country’s largest retailers however suggest that cracks are starting to show in the picture of consumer resilience.After the largest drop in China’s share of global GDP since the Mao era, China’s rise as an economic superpower is reversing, says contributing editor Ruchir Sharma. Zambia’s debt restructuring is in tatters after creditors, led by China, forced the copper-rich country to suspend a $4bn deal in dollar bonds, derailing its attempts to move on from a years-long default. Bondholders were said to be “very disappointed and deeply concerned”.Need to know: businessBayer shares plummeted as much as 18 per cent after the German pharma company reported failure of a late-stage trial for its asundexian blood-thinner.Italy blocked French jet engine maker Safran’s purchase of Collins Aerospace’s Italian control business over national security concerns. Giorgia Meloni’s government said the deal could affect key supply contracts for the Eurofighter programme. Despite airlines reporting booming profits and splashing out on new planes, their share prices are still below pre-pandemic levels as investors fret about high fuel prices and economic risks.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.The rapid success of weight-loss drugs is not only transforming the pharma industry but also disrupting the business models of companies in industries ranging from fast food to insurance to health and fitness, writes columnist Rana Foroohar.Russian assassins and saboteurs are targeting Bulgaria’s arms industry to disrupt crucial weapons supplies to Ukraine. Bulgarian officials say as much as 40 per cent of all bullets and shells used by Kyiv are manufactured in their country. Lithium, a key element of electric car batteries, is right at the centre of the energy transition but can production meet surging global demand while minimising its environmental impact? Watch FT Moral Money’s new film.Video: Inside the global race for lithium batteries | FT Film
The World of WorkThe process of naming EY’s new global chief executive has thrown the spotlight on the final business leadership taboo: old age. Competence and capability must surely come first, says Andrew Hill. You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.How common are bad bosses? Recent scandals show few sectors are exempt, writes columnist Pilita Clark. The world of the Japanese salaryman has been transformed by the pandemic and the shift to hybrid working, bringing to an end the presenteeism that dominated the country’s office culture, writes Asia business editor Leo Lewis.Employers and the government are missing opportunities to access the skills of the many migrants who came to the UK via non-work routes, such as Ukrainians and Hongkongers, writes Heather Rolfe of the British Future think-tankSome good newsThe World Health Organization reported progress in eliminating cervical cancer. Australia is on track within the next 10 years to be among the first countries in the world to do so.Recommended newslettersWorking it — Discover the big ideas shaping today’s workplaces with a weekly newsletter from work & careers editor Isabel Berwick. Sign up hereThe Climate Graphic: Explained — Understanding the most important climate data of the week. Sign up hereThanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here to receive future issues. And please share your feedback with us at [email protected]. Thank you More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Oil-producing countries have stalled efforts to draft the first legally binding international agreement on cutting plastic pollution, proposing to move the focus to waste management rather than scaling down production, according to official observers at week-long UN talks in Nairobi.The global gathering in the Kenyan capital was aimed at making progress on a deal for plastic equivalent to the 2015 Paris climate agreement. But the talks ended on Sunday evening without a plan to begin formal work on a draft treaty ahead of the next meeting, due to be held in Canada in April.Blocking tactics by countries that argued against starting to frame a draft were “disastrous” and would prevent meaningful work being carried out before talks resumed, said Graham Forbes, head of Greenpeace’s delegation in Nairobi. “More than halfway through the treaty negotiations, we are charging towards catastrophe,” Forbes said. “You cannot solve the pollution crisis unless you constrain, reduce and restrict plastic production.”Saudi Arabia, Russia and Iran were among countries arguing that binding cuts to plastics production should not be within the scope of the negotiations, according to people present at the talks and documents released by the country delegates. Instead, they proposed a voluntary, “bottom-up” approach focused on improvements to plastic recycling. Russia argued in a written statement on Wednesday that production of primary polymers, the fossil-fuel based chemicals of which plastics are made, “must not be discussed within the [UN plastics] process and shall not be part of the future instrument”. Iran’s delegation said that any treaty should “exclude the stages of extraction and processing of primary raw materials . . . since no plastic pollution is generated [then]”.Last year’s UN environment assembly resolution on tackling plastics pollution, which kick-started the negotiations, said the “full life cycle” of plastics, including upstream production, should be addressed in a legally binding instrument by the end of 2024.This could eventually create an agreement like the Paris climate deal — under which countries agreed to try to limit the rise in global temperatures to below 1.5C — but focused on addressing the risks to the climate, biodiversity and human health posed by the 400mn metric tonnes of plastic waste the UN environment programme estimates is produced globally every year. Less than a tenth of this is recycled. Before the latest round of talks, a so-called high ambition coalition of states including Norway, Canada, the United Arab Emirates and the EU had called for any first draft to address binding reductions to plastic production.Any measure to curb production would be a blow for fossil fuel companies. The market for the material is expected to drive a growing share of oil and gas revenues in coming years, offsetting weakening demand as the world transitions towards renewable energy, the International Energy Agency has said. According to an IEA analysis, petrochemical products such as plastics and fertilisers are projected to make up more than a third of the growth in oil demand to 2030 and nearly half to 2050. Petrochemical industry representatives were out in force in Nairobi, campaigning for solutions that did not require curbing production. According to non-profit advocacy group the Centre for International Environmental Law, 143 lobbyists representing the fossil fuel and chemicals sectors registered to attend the event. The industry said more support was needed for “circularity” — in which products never become waste but are reused, recycled or maintained — and that it was investing billions of dollars in recycling infrastructure and packaging design. Trade bodies representing the sector maintain plastic is essential in areas such as renewable energy and food and water sanitation. Supporting circularity “would avoid the unintended consequences of supply-side constraints of a material essential to meeting the UN’s sustainable development goals,” said Benny Mermans, chair of the World Plastics Council. Companies exposed to single-use plastics are under increasing pressure to take responsibility for the waste they produce. European consumer rights groups have filed a complaint against food and drink producers Coca-Cola, Danone and Nestlé for misleading claims about the recyclability of their bottles, while New York state is suing PepsiCo over plastic waste pollution from its products in the Buffalo River. Delegates failed to reach a consensus on giving the UN’s intergovernmental negotiating committee on plastic pollution a clear mandate to work on core negotiating points of the anticipated treaty, including on plastic production, chemicals in plastics, microplastics and single-use plastics, ahead of the April talks. By Sunday evening, governments and observers had submitted more than 500 proposed amendments to the options presented for negotiation, with no decision on which to take forward.  Ana Rocha, global plastics policy director of the Global Alliance for Incinerator Alternatives, said: “The bullies of the negotiations pushed their way through. Plastic is burning our planet, destroying communities and poisoning our bodies. This treaty can’t wait.”  But Inger Andersen, head of the UN Environment Programme, said that despite the setback, negotiators would “continue to be ambitious, innovative, inclusive, and bold” and use the talks “to hone a sharp and effective instrument we can use to carve out a better future”.Additional reporting by Amanda Chu in New YorkClimate CapitalWhere climate change meets business, markets and politics. Explore the FT’s coverage here.Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Argentina is a beautiful country to visit. Sadly, bailout missions rather than holidays are the reason IMF officials have gone there 22 times since 1958. That tally may grow. Argentina’s newly elected president Javier Milei plans to “chainsaw” government spending and dollarise the economy. Argentina’s precarious fiscal situation needs more than noisy rhetoric to keep creditors at bay.Replacing the peso with the greenback could help restore short-term confidence. Everyone is tired of the country’s hyperinflation, forecast at 200 per cent annually. Officially, there are 353 pesos to the dollar. Fair value is closer to 600 pesos, thinks William Jackson at Capital Economics. Black marketeers put it at about 900 pesos.If Milei’s government does dollarise the economy, peso holders would need to convert their currency before the country’s capital controls are removed. Devaluation would follow. This would have a knock-on effect on such government data as the debt/GDP ratio. Bond markets already take a dim view of Argentina. Its woes are well-known and priced in. The benchmark US dollar sovereign bond, maturing in 2030 and with a coupon of 0.75 per cent, trades at about 30 cents on the dollar. These bonds were a third lower about a year ago. With some $16bn of outstanding debt, they are popular, liquid instruments easily trading tens of millions daily, according to emerging market debt specialists at Abrdn. Argentine US listed companies, such as state oil producer YPF and Grupo Financiero (Banco) Galicia, have performed well over one year, up as much as 70 per cent in dollar terms. Devaluation fears are partly reflected in YPF’s dollar shares. Its depository receipt, which represents one local share, closed at $10.73 on Friday. That reflects a 900 peso/dollar conversion. YPF leapt 24 per cent in premarket New York trading on Monday.Many investors in Argentina are financial tourists. Milei’s government needs them to stay longer. This will only happen if radicalism is swiftly followed by stability, a tall order for this political firebrand.If you are a subscriber and would like to receive alerts when Lex articles are published, just click the button “Add to myFT”, which appears at the top of this page above the headline. More

BUENOS AIRES (Reuters) – Argentina’s libertarian President-elect Javier Milei has won a closely fought election. Now comes the hard part: dealing with economic crises.Inflation is at 143%, net reserves of foreign currency are deep in the red, savers are ditching the peso, and a recession is looming – if not already here. Four in 10 Argentines live in poverty and a sharp peso devaluation is likely.Milei, who is pledging economic shock therapy such as shutting the central bank and dollarization, won a second-round runoff vote on Sunday with some 56% to rival Sergio Massa’s 44%.Milei now faces the huge challenge of turning around the economy once he takes office on Dec. 10. Failure could lead to the already embattled country suffering a tenth sovereign debt default, poverty climbing and possible social unrest.”It is an economy that is in intensive care,” said Miguel Kiguel, a former undersecretary of finance at the Economy Ministry in the 1990s.INFLATIONArgentina’s high inflation rate creates huge distortions in markets and for consumers, with prices changing weekly. A central bank poll of analysts forecast 185% inflation by the end of the year.”One of the biggest challenges of the next administration will be to correct the distortion of relative prices that the economy has today,” said Lucio Garay Mendez, economist at consulting firm EcoGo.”In a context of high inflation and a stabilization plan, a correction is inevitable.”In a bid to tamp down inflation Argentina’s central bank has hiked the benchmark interest rate to 133%, which encourages saving in pesos, but hurts access to credit and economic growth.PESO CONTROLSArgentina’s peso currency has been shackled by capital controls since a market crash in 2019, which has led to an unwieldy array of exchange rates, where dollars trade for well over twice the price of the official level near 350 per dollar.Popular unofficial exchange rates include the “blue” dollar, the MEP, and blue-chip swap, though demand for dollars through parallel channels has over time spawned dozens of different rates including a “Coldplay dollar” and “Malbec dollar.”Milei has pledged to quickly undo capital controls and eventually dollarize the economy, while a sharp devaluation is likely in the near future to bring the official and parallel rates closer together.CENTRAL BANK RESERVESArgentina’s central bank reserves of foreign currency are near their lowest level since 2006, and in net terms are widely seen by analysts to be in negative territory after a major drought hit exports of key cash crops like soy, corn, and wheat.The low reserves threaten the country’s ability to repay debts to major creditor the International Monetary Fund (IMF) and private bondholders, as well as cover key imports. Argentina will need to revamp its creaking $44 billion IMF program.The government has agreed on an extended currency swap with China to help cover some of its costs, and had to delay some payments to key trade partners such as Brazil.RECESSIONLatin America’s third-largest economy is on track to shrink 2% this year, according to the latest central bank analyst survey, partly due to the impact of the recent drought that cut corn and soy crops in half.Along with triple-digit inflation, that is likely to sharpen poverty levels, with two-fifths of people already living under the poverty line as salaries and savings are eroded.SILVER LININGS?Argentina, rich in grains, shale gas and lithium, could see a boost next year as better rains help the harvest, a new gas pipeline trims reliance on costly imports, and demand rises for the lithium needed for electric vehicle batteries.Soy and corn are expected to have far stronger harvests, which will bring in much-needed foreign currency.”The harvest will help bring a greater flow of income in the economy, as will the greater production of (shale oil formation) Vaca Muerta,” said Eugenio Marí, chief economist at Libertad y Progreso Foundation. More

BUENOS AIRES/MEXICO CITY (Reuters) – Mexican stocks will likely gain further in 2024, propelled by faster economic growth, but local markets may go through some volatility in the months before a presidential election in June, a Reuters poll found.Overall, Mexico’s equities should continue getting support from the spillover of “nearshoring” activity, or the relocation of manufacturing plants in Mexico to benefit from the proximity to the United States.The S&P/BMV IPC index of Mexican stocks is expected to advance 11% to 58,500 points at the end of 2024 compared to 52,685 on Friday, according to the median estimate of 13 strategists polled Nov. 13-20.Adrian Ramirez, head of equity strategy at Masari Casa de Bolsa, said stocks may experience volatility in line with political developments around the elections in Mexico and the United States, as well as from policy adjustments in both countries.”However, it could be a positive year for stocks, with a continuation of the current upswing favored by discretionary consumption and the construction industry, reflected in the recent improvement of economic growth expectations,” he added.Local businesses, particularly those linked to real estate and construction, are counting on investment by companies moving from other countries to Mexico, whose economy could grow 3.5% or more this year.Meanwhile, the campaign for the presidential vote on June 2 is starting to take shape. Ruling party candidate Claudia Sheinbaum, a former Mexico City Mayor, holds a solid lead over her nearest rival.Sheinbaum has pledged to consolidate the legacy of current President Andres Manuel Lopez Obrador, who has built his popularity with increased welfare spending and cannot seek reelection.On the other hand, the central bank has kept an orthodox approach consisting of rate hikes that brought the cost of credit to record levels. Any adjustments would be slight in the near term, a top policymaker said last week.In Brazil, the Bovespa stocks index is set to add 10.6% to 138,000 points at the end of next year versus 124,773 last week. So far in 2023 local equities tracked by the Bovespa index are up 13.7%, compared to 8.7% in Mexico per the S&P/BMV IPC index.”However, foreign investors will have less reason to buy Brazilian stocks as interest rates abroad remain high,” said Gustavo Cruz, RB Investimentos strategist, following a spike in U.S. Treasury yields that initially hurt the Bovespa last month.This was followed by a recovery in November thanks to more stable trends in debt markets due to lower-than-expected inflation readings both in the U.S. and in Brazil, where the central bank is slowly cutting its benchmark interest rate.(Other stories from the Reuters Q4 global stock markets poll package:) (Reporting and polling by Gabriel Burin in Buenos Aires and Ana Isabel Martinez in Mexico City; Editing by Christina Fincher) More

JERUSALEM (Reuters) -Bank of Israel Governor Amir Yaron will stay on for a second five-year term after Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich agreed on an extension, removing a major market uncertainty that has lasted much of the year.The decision to extend Yaron’s time in charge of the central bank comes as Israel has been fighting a war with Palestinian Hamas militants in Gaza for the past six weeks. It would be brought to cabinet for a vote at its next meeting, Netanyahu and Smotrich said in a joint statement.”Governor Yaron accepts the request to serve for another term,” the central bank said.Yaron thanked Netanyahu and Smotrich for their confidence in him and the Bank of Israel.”We have many important tasks ahead of us in the economic arena and I will do everything in my power so that we meet them successfully and professionally for the benefit of the economy and the country,” Yaron said.Yaron’s current five-year term runs through the end of 2023.”It’s the right thing to do for the markets right now,” Smotrich’s spokesman said. “They work well together professionally and it’s the right decision.”Yaron last month had said he would extend his term until at least the end of the current emergency period to help navigate the challenges to Israel’s economy while the country was at war.The issue of whether Yaron would stay for a second term, or if Netanyahu would offer him another one, has hung over markets for months. Yaron had long said he would announce his decision after the Jewish holiday period that ended on Oct. 7, which was when the war broke out.While not tipping his hand, Yaron told Reuters in September that the last five years have been “one of the most challenging” for any Israeli central banker ever, citing five election cycles, the COVID pandemic, the Ukraine-Russia war, inflation and the government’s highly contested plan to overhaul the judiciary that sparked mass protests.Yaron had been critical of the government’s judicial plan and it was believed this could lead Netanyahu to not offer him a second term. He has also had to fend off criticism and potential legislation from lawmakers over steep rate increases that have boosted bank profits and hurt mortgage holders, while banks were slow to pass on higher rates to savings accounts.In a bid to battle inflation, policymakers raised the benchmark interest rate from 0.1% in April 2022 to 4.75% in May 2023. Rates have been on hold since then.More recently, Yaron has cautioned the government to be more responsible in allocating spending for the war. Netanyahu in 2018 chose Israeli-born Yaron, a professor at the Wharton School of the University of Pennsylvania, to head Israel’s central bank, citing the need for an expert on the global economy.He succeeded Karnit Flug, who opted not to seek a second term. More

BUENOS AIRES/LONDON (Reuters) -Far-right libertarian Javier Milei’s strong win in Argentina’s presidential election is boosting bonds and equities but putting downward pressure on the peso currency, investors said on Monday.The outsider radical, who has pledged to take a chainsaw to public spending, “burn down” the central bank and dollarize the economy, beat Peronist economy chief Sergio Massa in Sunday’s vote, though he struck a measured tone in his first speech as president-elect.The South American country’s markets are closed on Monday for a local holiday. But its overseas dollar bonds, which largely trade deep in distressed territory, rallied more than 2 cent to just above 30 cents on the dollar at 1144 GMT, according to MarketAxess data.JPMorgan’s Diego W. Pereira said in a note to clients late on Sunday that it would not change its recommendation on Argentina’s international bonds from its measured “market weight” stance.”While we expect the outcome to be constructive for valuations in the immediate term, the lingering uncertainty around Milei’s policy path, execution capabilities and Argentina’s fragile economic stance will still weigh on prices,” Pereira said. U.S.-listed shares of Argentine companies rallied, with oil company YPF trading 18.4% higher, banks including Grupo Supervielle Banco Macro, Banco Bbva Argentina and Grupo Financiero Galicia 8.6% to 11.4% higher and the $50.8 million Global X MSCI Argentina ETF ARGT.N up 12.2% in low volumes.Milei will not take office until Dec. 10, and investors noted he did not refer to “dollarization” in his first speech, raising questions about how quickly he might pursue scrapping the peso entirely. He did pledge rapid reforms to fix an economy mired in crisis. Inflation is at 143%, foreign currency reserves are more than $10 billion in the red and a recession is looming. He also signaled moderation and thanked his mainstream conservative backers Mauricio Macri and Patricia Bullrich. “It is indisputable that a swift change from the failed economic policies of the past is imperative. The accumulated imbalances in the economy have grown too large and must be addressed promptly,” Sergio Armella of Goldman Sachs said in a note. The peso currency lost ground on crypto exchanges, watched by investors as a proxy for the black market. The price of one tether – a cryptocurrency pegged to the U.S. dollar – was around 1011.8 Argentine pesos at 1121 GMT on Monday, having hit as high as 1120.4 late on Sunday, according to the crypto exchange Binance. Binance’s website showed that the pair had opened at 913.7 on Friday.Bruno Gennari, Argentina expert at KNG Securities, said there would likely be quick devaluations; Morgan Stanley said it expected an at least an 80% adjustment of Argentina’s official forex in December. “Given the fragile situation of international reserves, there will be limited room to maintain the current FX level, which requires a 35% nominal depreciation to catch up with the real levels following the 13 August primaries. Milei, a TV pundit-turned lawmaker with little political experience, rode a wave of voter anger, at times during the campaign pledging aggressive plans to slash state spending and the size of government.Investors said they would be watching for him to stick to spending cut promises – and quickly – to buoy markets. “He cannot equivocate,” Walter Stoeppelwerth, chief strategist at financial firm Gletir, said of Milei’s spending cut plans, despite fear about the pain of austerity with two-fifths of the population already in poverty.Ilke Pienaar, head of emerging markets sovereign research with PineBridge Investments, said the speed of talks with the International Monetary Fund over its $44 billion loan program, would also be crucial. “You need to see some decisive action in the coming weeks to make sure they can weather the repayments,” she said, citing payments coming due in December and January. Milei will be buoyed by his larger-than-expected vote take of 56% in the run-off after he got 30% in the first round vote last month. But he still faces a divided Congress where his Liberty Advances bloc only has a small share of seats.”Having a resounding outcome like he did yesterday … gives him a strong public mandate, particularly given his position of weakness in congress,” Jimena Blanco, head of Americas with Verisk (NASDAQ:VRSK) Maplecroft, said. More

LONDON (Reuters) -Nacho Gutiérrez-Orrantia, one of Citi’s ‘s most senior bankers in Europe, will become banking and cluster head for Europe as part of its planned restructuring, people familiar with the situation said. The latest step in the bank’s reorganisation will be announced later on Monday, the people said. It is also expected to include job cuts and senior management changes that may affect thousands of staff, Reuters reported on Monday.In his new role, the Spanish banker will look after Citi´s businesses in the region.Prior to the restructuring, Europe was part of its EMEA business unit, the second-largest region on a revenue basis, according to Citi’s 2022 annual report. Citi employs approximately 15,000 people in Europe. Gutiérrez-Orrantia was appointed in 2021 as Citi’s co-Head of Banking, Capital Markets and Advisory (BCMA) for Europe, Middle East and Africa (EMEA) and has spent 19 years at the bank.Since late 2022, the Bilbao native ran the BCMA business in EMEA alongside with Jens Welter, who joined the US bank from Credit Suisse last year.The appointment of Gutiérrez-Orrantia is part of the biggest reshuffle of the US bank in decades, aimed at giving CEO Jane Fraser more direct control of the bank as she seeks to simplify the lender and boost its stock price.Last month, Citi announced plans to cut management layers from 13 to eight. In the two top layers of leadership, Citi reduced 15% of functional roles and eliminated 60 committees, it said in its third-quarter earnings presentation.The restructuring includes splitting the business in two regions, US and International. Within the international unit, head by Ernesto Torres, Citi’s operations will be led by so-called cluster chiefs, looking after the different regions: Europe, UK, Latin America, Middle East & Africa, Asia South, Asia North & Australia and Japan. The US bank recently appointed former Deutsche Bank UK deputy CEO Tiina Lee as UK Citi Country Officer (CCO) and UK cluster and banking head. More