A Merger Will Create Spain’s Largest Bank: Live Updates - 8 minutes read

TikTok and WeChat’s parent, Tencent, respond to the Trump administration’s ban. Representatives of the Chinese-owned mobile apps WeChat and TikTok responded on Friday to the Trump administration’s decision to bar the apps from app stores in the United States. A TikTok spokesman, Josh Gartner, said in a statement that the company was disappointed in the Commerce Department’s decision to block the app. “We will continue to challenge the unjust executive order, which was enacted without due process and threatens to deprive the American people and small businesses across the U.S. of a significant platform for both a voice and livelihoods,” he said. TikTok, which is owned by the Chinese company ByteDance but does not directly operate in China, has become a wildly popular platform for sharing viral videos in the United States. Tencent Holdings, which owns WeChat, said in a statement it was reviewing the new rules and had submitted a proposal to address the government’s national security concerns about the app. It said it would “continue to discuss with the government and other stakeholders in the U.S. ways to achieve a long-term solution.”

A Fed president details his ‘no’ vote against the central bank’s statement. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, was one of two votes against the Fed’s policy statement. The Federal Reserve unveiled a major update to its policy statement this week, indicating that it will leave interest rates on hold near zero until the economy has regained full employment, inflation has risen above 2 percent, and those price gains look to be headed even higher. The guidance lays the groundwork for years of growth-stoking monetary policy, but Neel Kashkari from the Federal Reserve Bank of Minneapolis wanted to do even more and was one of two votes against the statement. He would have pledged to keep rates low until core inflation — which strips out volatile fuel and food — had exceeded 2 percent on a sustained basis. “I would have preferred the committee make a stronger commitment to not raising rates until we were certain to have achieved our dual mandate objectives,” Mr. Kashkari wrote in an explanation of his dissent published Friday. Had the Fed’s new guidance been in place following the Great Recession, it would have only slightly delayed the central bank’s timing on rate increases, he said. Inflation did briefly rise above 2 percent in 2017. He argued that the revamped language should not include a reference to full employment, which is nearly impossible to gauge in real time. Mr. Kashkari’s colleague, Robert S. Kaplan from the Federal Reserve Bank of Dallas, joined him in dissenting. But Mr. Kaplan did so for a very different reason: He wanted the central bank to retain more flexibility, rather than indicating that actual achievement of 2 percent inflation was a necessary condition for raising rates. That would create leeway to raise rates earlier. The update from the Fed came after it reworked its long-run policy goals last month, making changes that would embrace periods of faster inflation and which enshrined modesty when it came to judging labor market hotness. “They’re sort of on two sides of the discussion,” Jerome H. Powell, the Fed’s chair, said of the dissents at his post-meeting news conference. “We’re the first major central bank to adopt this framework. There’s no cookbook.”

What we heard on earnings calls this week. The editors and reporters for the DealBook newsletter sift through a lot of company reports and listen to many corporate conference calls. These are some of the things that caught our notice this week: 💥 “I think the word ‘unprecedented’ gets way overused this year, 2020, and you use the figure of speech ‘earth shattering,’ which I don’t actually think we can use in 2020 because it might actually literally happen.” — Paul Jacobson, chief financial officer of Delta Air Lines, on not tempting fate 😠 “My team told me that I came across a bit too stern in my opening remarks on Monday, so feedback is always welcome, and I hope I wasn’t putting anybody off.” — Bernard Looney, chief executive of BP, on his presentation style 🍩 “A lot of our early morning traffic that used to be in that 6 to 9 a.m. window for us has really shifted into that 10 to 2 or 10 to 1. People are coming out a little later., Maybe they need a break from their Zoom.” — Kate Jaspon, chief financial officer of Dunkin’ Brands, on changing workday patterns 🏰 “The Barbie Dreamhouse movie was the number-eight most watched content in its first week on Netflix across all genres, not just kids.” — Ynon Kreiz, Mattel’s chief executive, on pandemic pastimes 🌯 “Our portion sizes are much more consistent because there’s not somebody pointing at every single pan and … the crew will see just the way that a customer is looking at them and think, ‘Oh, I better put another scoop in.’” — Jack Hartung, chief financial officer of Chipotle, on the benefits of online orders

“There are a lot of people who don’t want to disinfect their own homes,” said Maria Del Carmen, “so they call a housekeeper.” Hannah Yoon for The New York Times The pandemic has had devastating consequences for a wide variety of occupations, but housekeepers have been among the hardest hit. Seventy-two percent of them reported that they had lost all of their clients by the first week of April, according to a survey by the National Domestic Workers Alliance. The fortunate had employers who continued to pay them. The unlucky called or texted their employers and heard nothing back. They weren’t laid off so much as ghosted, en masse. “We plateaued at about 40 percent employment in our surveys of members,” said Ai-jen Poo, executive director of the alliance. “And because most of these people are undocumented, they have not received any kind of government relief. We’re talking about a full-blown humanitarian crisis, a Depression-level situation for this work force.” The pandemic has laid bare not just the vulnerability of housekeepers to economic shocks but their total lack of leverage. Several workers said they had clients who would not let anyone clean who has had Covid-19; others know clients who will hire only Covid survivors, on the theory that after their recovery, they pose no health risk. Housekeepers are often given strict instructions about how they can commute, and are quizzed about whether and how much they interact with others. But they have no idea whether their employers are taking similar precautions. Nor, in many cases, are they accorded the simple decencies that are part of formal employment. “It would be nice to have at least two days’ notice when someone cancels on you, either to let you know or compensate you for your time,” said Magdalena Zylinska, a housekeeper in Chicago who helped lobby for a Domestic Workers’ Rights bill that passed in Illinois in 2017. “I think a lot of people don’t realize that if I don’t work, I don’t get paid and I still have to buy food, pay bills, utilities.”

A merger between two Spanish banks will create the country’s largest lender. CaixaBank, based in Barcelona, agreed to merge with Bankia, the institution that was at the heart of Spain’s financial crisis and 2012 banking bailout. CaixaBank and Bankia agreed late Thursday to merge in a deal that would form Spain’s largest bank and end the government’s majority control over Bankia, the institution that was at the heart of Spain’s financial crisis and 2012 banking bailout. The all-share agreement was presented as a merger, but CaixaBank, which is based in Barcelona, will account for about two-thirds of the new bank’s combined assets, worth 665 billion euros, or $785 billion. The combined institution, with an expected 20 million customers, will keep the CaixaBank name. The transaction comes after both banks have reported sharp drops in first-half earnings, at a time of record-low interest rates and as the coronavirus pandemic has plunged Spain into one of the deepest recessions in Europe. Many analysts expect the continued pressure on banks’ margins to force further consolidation in the sector. A merger between CaixaBank and Bankia “could revive moves by other banks to gain scale or strengthen their franchises or business models to remain competitive,” Fitch Ratings said in a note to investors earlier this month. Bankia was formed as a seven-way merger intended to consolidate savings banks, known as cajas in Spain, which were crippled by bad loans, a result of the bursting of the country’s construction bubble after the onset of the world financial crisis in 2008. But instead of shoring up Spain’s financial sector, Bankia ended up posting the largest banking loss in the country’s history and requiring about €22 billion in rescue funding, as part of a European banking bailout that the Spanish government was forced to negotiate in 2012. As a result, the government also took over Bankia, which was then slimmed down to return it to profit.

Source: New York Times

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