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The Morning Risk Report: China Casts Wary Eye on Giant Ant Financial |
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A logo of Ant Financial is displayed at an event of the company in Hong Kong in November 2016. PHOTO: Bobby Yip/Reuters
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Ant Financial Services Group, founded by Chinese billionaire Jack Ma, has become the world’s biggest financial-technology firm, but that success is putting a target on the company’s back, WSJ's Stella Yifan Xie reports, as China, even more than the U.S., is under pressure to reckon with the disruptive power of a financial-technology giant.
China’s banks complain Ant siphons away their deposits, causing them to pay higher interest rates, and is a factor leading them to close branches and ATMs. One commentator at a state-owned television channel described Ant’s huge money-market fund as “a vampire sucking blood from banks.”
Ant executives reject the notion the company is acting like a bank without oversight. They say they simply are bringing financial services to people the banks have ignored.
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Chinese authorities, increasingly uncomfortable about Ant’s scale, have started to put limits on the activities it can pursue. Earlier this year, China’s central bank undermined a years-long effort by Ant to build a national credit-scoring system. The bank effectively prevented Ant’s system from being used by institutions making loans.
Regulators have issued rules requiring large money-market funds to sharply reduce holdings of assets that allow them to pay high interest rates. They have pressured Ant to slow inflows into its giant money fund.
Authorities are weighing whether to designate Ant a financial holding company and require it to meet bank-style capital requirements, people familiar with the matter say. That would likely affect its profits, which last year came to $2 billion pretax on roughly $10 billion in revenue.
Ant is expanding its presence overseas by getting more retailers to accept payments using its online payments service, Alipay, but has struggled to replicate its China business success.
Early this year, Ant called off a takeover of U.S. money-transfer firm MoneyGram International after an American national-security panel refused to approve the acquisition.
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For more than a decade, American Express Co.’s foreign-exchange unit recruited business clients with offers of low currency-conversion rates before quietly raising their prices, WSJ reports, citing people familiar with the matter. The practice, widespread within the forex department, was occurring until early this year and dates back to at least 2004, the people said. AmEx said it doesn’t have contractual pricing arrangements with most of its foreign-exchange customers.
A former Chinese politician who was suspected of bribery and who fled the country in 2010 surrendered to authorities and was returned to China from the United States, Reuters reports. Zhang Yongguang was listed by China as one of the country's 100 most-wanted overseas fugitives.
Some small countries and territories are looking to become the main destination for cryptocurrency companies worried about regulatory uncertainty in the U.S. and Asia, New York Times reports. Locations including Bermuda, Malta and Liechtenstein recently passed laws or have legislation pending to make it easier for cryptocurrency firms to operate.
A New York state regulator penalized Charter Communications Inc. for failing to fulfill its obligations under its 2016 merger with Time Warner Cable Inc., and essentially ordered the cable provider to exit its operations in the state. WSJ reports the New York Public Service Commission on Friday revoked its approval for the tie-up, saying it took the step in response to Charter’s delays in fulfilling its promise to extend broadband service to rural areas of the state.
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U.S. citizens not suspected of crimes and who aren't on a terrorist watch list are being tracked while they move through airports and on aircraft under a previously unreported program uncovered by Boston Globe, which viewed an internal memo from the U.S. Transportation Safety Administration that outlined the program. TSA defended its efforts to protect people from terrorism, and a spokesman said people aren't monitored based on their race or religion,
Washington Post reports.
Every day, dozens of young men crowd into tiny rooms with 30 computers each in northern Bangladesh. Their mission: Trick Amazon.com Inc. The scams are used to try to outsmart Amazon’s automated system that ranks some half-billion products in search results--one of an ever-rotating wheel of tricks used to game Amazon’s algorithms.
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The news that former Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne kept secret from the company's board the seriousness of his deterioating health is bringing attention to the question over what information a top executive should have to reveal to a board or shareholders, AP reports.
Some CBS Corp. directors discussed over the weekend whether Chief Executive Leslie Moonves should step aside from the company pending its investigation into allegations he sexually harassed women, WSJ reports, citing people familiar with the matter. The board of CBS, which is scheduled to meet via conference call this Monday, is expected to select a special committee to oversee the investigation.
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The CBS logo at the company's broadcast center in New York in May 2017. PHOTO: Mary Altaffer/Associated Press
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Police in China are asking prosecutors to approve the arrests of 18 people at a vaccine manufacturer that falsified data and sold ineffective doses, Reuters reports. Chinese authorities have started making unannounced checks at vaccine-making facilities following the scandal involving Changsheng Bio-technology Co. Ltd.
Pope Francis accepted the resignation of U.S. Cardinal Theodore McCarrick, taking an extraordinary disciplinary measure against a senior member of the Catholic hierarchy after several allegations of sexual abuse, WSJ reports. The pope also accepted the resignation of an archbishop of Australia after he was found guilty earlier this year of covering up child sex abuse, Reuters reports.
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Energy companies and petro-states—burned by 2014’s price collapse—are spending less on new projects, even though oil prices have more than doubled since 2016, WSJ reports. That has sparked concerns among some industry watchers of a massive price spike that could hurt businesses and consumers.
President Trump renewed a threat to shut down the government unless Congress provides money for a wall at the southern border and enacts new curbs on immigration, WSJ reports. The threat adds a new headache for congressional Republican leaders two months before government funding expires on Sept. 30.
Young people in Germany are opting to enroll in college and bypass the country's renowned vocational-training system, which is credited with helping Germany attain the European Union's lowest youth unemployment rate, Reuters reports.
Firefighters continue to fight a destructive fire burning in and around Redding, Calif. Reuters reports the fire has burned around 90,000 acres and taken the lives of five people; around 38,000 people have been evacuated.
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A firefighting helicopter makes a water drop as the sun sets over a ridge burning near Redding, Calif., on Friday. PHOTO: Associated Press
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BMW AG said it would raise prices on some sport-utility vehicles it sells in China because of tariffs imposed on autos made in the U.S., Reuters reports. Canada, the European Union, Japan, Mexico and South Korea are scheduled to meet next week to discuss how they should respond to U.S. tariff threats.
A polar bear was shot and killed after it attacked a guard taking passengers off a cruise ship in an area between mainland Norway and the North Pole, AP reports. The injured man was taken for treatment and was not facing life-threatening injuries.
U.S. almond farmers are getting crunched from all sides as they head into what is likely to be a record harvest season. WSJ reports prices for California almonds have fallen by more than 10% over the past two months, reflecting expectations for a bumper crop and steep tariffs imposed this year by China, which until recently was the second-largest importer of U.S. almonds after the European Union.
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A startup stock exchange has discovered it isn’t easy to pull corporate America away from the mighty New York Stock Exchange and Nasdaq Inc. IEX Group Inc. made an ambitious effort to attract companies listed on the NYSE and Nasdaq after it built a new exchange designed to protect investors from what it called predatory high-speed trading strategies. WSJ reports IEX so far has failed to list any companies despite approaching hundreds over the past several years.
Employers say they are abandoning preferences for college degrees and specific skill sets to speed up hiring and broaden the pool of job candidates, WSJ reports. Many companies added requirements to job postings after the recession, when millions were out of work and human-resources departments were stacked with résumés.
Walmart Inc. is exploring a subscription video-streaming service that would seek to challenge Netflix Inc. and Amazon.com Inc. by offering programming that targets Middle America, WSJ reports, citing people familiar with the plans. Planning is still in the early stages and Walmart hasn’t given the project a green light, the people said. But a decision to move forward could come by late summer or early fall.
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Follow the WSJ Risk & Compliance Team on Twitter: @WSJRisk, @srubenfeld, @BenDiPietro1 and @LikelyMara.
Send complaints, comments and kudos to Ben DiPietro at ben.dipietro@wsj.com.
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