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The Morning Ledger: Slow Switch to New Rates Pressures Treasurers |
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The headquarters of the European Central Bank in Frankfurt, Germany. The ECB is administering a new short-term rate that will be available in October. PHOTO: BLOOMBERG NEWS
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Hello. The European Union is lagging behind the U.S. and U.K. in efforts to switch to new benchmarks underpinning financial contracts, pressuring treasurers at eurozone companies, CFO Journal reports.
Libor, let's move on: Regulators want financial markets around the world to stop referencing interest rates derived from bank estimates. The move is spurred by a manipulation scandal involving the London interbank offered rate used in hundreds of trillions of dollars worth of contracts, including mortgages and corporate loans. Instead of the so-called Libor, banks and companies are supposed to use benchmarks calculated with overnight transaction data.
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Race against time: In the eurozone, a tight transition schedule is complicating the changeover for treasurers. Both the euro interbank offered rate, known as Euribor, and the euro overnight index average, Eonia, have to be overhauled or replaced by January 2020 to meet regulatory requirements. Any delay could slow the issuance of corporate debt in Europe, as companies might decide to wait as they lack a reference rate to calculate the interest cost of future bonds.
Wait and see: Finnish industrial firm Wärtsilä Oyi is among the companies that have expressed concern about the lack of progress around the benchmark. “Euribor is by far the most important benchmark for us,” says Anu Hämäläinen, the company’s treasurer. “It’s a worry that the replacement process is so delayed.”
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Advance Auto Parts Inc., Allegion PLC, FirstEnergy Corp., LendingClub Corp., Noble Energy Inc. and Walmart Inc. are among the companies slated to report earnings today.
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As U.S. trade negotiations with China resume this week, the Trump administration is racing to strike a deal that will result in long-term reforms—and prove that tariffs are an effective battering ram to open markets around the world.
Minutes from the U.S. Federal Reserve's January policy meeting should provide new clues on Wednesday into how officials assess the state of the economy. Also on Wednesday, the South African government presents its budget.
On Thursday, the U.S. Commerce Department releases December durable-goods data, while the National Association of Realtors publishes January existing-homes sales data. The European Central Bank releases meetings from its latest policy meeting. Also on Thursday, the latest purchasing managers' index data is due out for France, Germany and the Eurozone.
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Apple elevated John Giannandrea, shown in 2017, to its executive team months after hiring him away from Google. PHOTO: STEVE JENNINGS/GETTY IMAGES FOR TECHCRUNCH
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Apple Inc. is shaking up leadership and reordering priorities across its services, artificial intelligence, hardware and retail divisions as it works to reduce the company’s reliance on iPhone sales.
Amazon.com Inc.’s decision to abandon its $2.5 billion plan for a New York City headquarters could disrupt redevelopment and dash hopes for a surge in hiring in the neighborhood of Long Island City. One entity unlikely to suffer much: Amazon itself.
HSBC Holdings PLC reported lower-than-expected fourth-quarter profit Tuesday as choppy financial markets, U.S.-China trade tensions and Brexit uncertainty weighed on the global bank.
Japanese car maker Honda Motor Co. will shut a major production plant in the U.K., becoming the latest auto group to plan a pullback from the U.K. as Brexit looms.
Navient Corp. has received a buyout offer worth about $3.2 billion from a pair of investors that the student-loan servicer rejected as too low.
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$11 Trillion |
Investors around the globe are effectively paying governments to hold more than $11 trillion of their bonds, a fresh sign of ebbing economic confidence in Europe and Japan.
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Finance Professionals Lack Confidence They Can Spot Errors |
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Nearly seven in ten finance professionals believe their company has made significant business decisions based on bad financial data, according to a survey released on Tuesday.
The survey, by financial software provider BlackLine Inc., found that 55% of professionals lack confidence in their ability to spot financial errors before reporting results.
Human error, multiple data sources, a lack of automation and clunky technology were among the factors that undermined respondents’ trust in financial data, the survey found.
Some 26% of respondents said they were concerned about errors they know to exist, but hadn’t identified. Only 17% of surveyed finance professionals said they could trust that their finance team or CFO had identified all errors before reporting results, while 65% said they had worked for a company that had to restate earnings due to inaccuracies in financial data.
The survey also gave an indication of how much time is spent fixing mistakes. Some 22% of C-suite respondents said it takes their organization up to 10 days per month to spot inaccuracies, potentially wasting as many as 114 days a year.
“It seems clear that not only are reporting errors prevalent, but that many of these inaccuracies remain hidden below the surface,” BlackLine chief strategy officer Mario Spanicciati said.
BlackLine polled 579 C Suite-level and 575 other finance professionals at large and midsize companies in the U.S., the U.K., Germany, France, Hong Kong, Singapore and Australia.
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Manuel Quevedo, Venezuela's oil minister, is being sanctioned by the Trump administration for what the U.S. says is corruption. PHOTO: STEFAN WERMUTH/BLOOMBERG NEWS
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OPEC will continue to operate normally despite U.S. sanctions placed on the oil cartel’s Venezuelan president, officials from the group said on Monday.
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U.S. federal air-safety regulators are investigating Southwest Airlines Co. for widespread miscalculation of the total weight of checked bags loaded onto each of its flights, according to government officials and internal agency documents.
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Congress set the stage last year to pass a sweeping consumer data-privacy law in 2019, but prospects for legislation are dimming amid sharpening divides among lawmakers over how far the federal government should go in reining in Big Tech.
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European apothecaries, a last bastion of the continent’s market-street past, are up against a fierce challenge from a Belgian entrepreneur who doesn’t follow their traditional rules designed to cushion competition.
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“Free trade does tend to lift all boats.”
| — BHP Group Ltd. Chief Executive Andrew Mackenzie sounded a warning over the U.S.-China trade conflict on Tuesday. The company reported an 87% rise in net profit. |
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Citigroup Inc., the New York-based bank, released compensation details for its newly appointed chief financial officer, Mark A.L. Mason, who will take on the role on Feb. 23.
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Mr. Mason is set to receive an annual base salary of $500,000, among other compensation, and replaces the company's current CFO, John C. Gerspach, Citi said in a filing. Mr. Gerspach is set to retire from his role on Feb. 23 and will leave the company effective March 1.
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