Good morning. New York’s financial regulator is now requiring banks looking to enter the cryptocurrency space to first seek approval, reports Risk & Compliance Journal’s Mengqi Sun.

The New York Department of Financial Services said Thursday it would assess new crypto-related activities proposed by financial institutions based on potential risks they may pose to the banks and consumers.

The U.S. and foreign banks under NYDFS supervision should give the regulator a 90-day heads up about their plans for new or significantly different crypto-related activities, NYDFS said.

NYDFS, because of its oversight of Wall Street stalwarts, already plays an outsize role nationally in regulating the financial-services sector. The regulator is one of the first state financial regulators to issue this kind of crypto guidance for banks.

The move comes after the arrest earlier this week of FTX founder Sam Bankman-Fried, a case that has captivated crypto observers. Some customers of the collapsed cryptocurrency exchange said they were skeptical that they would ever get their money back.

Treasury lays out who might have access to new ownership database. The U.S. Treasury Department has proposed giving both banks and law-enforcement officials varying degrees of access to a sprawling new database of corporate-ownership information as part of an effort to stop criminals and terrorists from using anonymous shell companies to hide dirty money.

The proposal, issued by the Treasury’s Financial Crimes Enforcement Network, launches the second of three rule-makings, which officials have said are needed to implement the Corporate Transparency Act, an ownership-reporting law Congress approved in 2021.

A prior rule covered which companies would be required to submit information about their owners to FinCEN, and what type of information they would need to provide. The latest rule lays out who will be able to use the information and how they can access its contents. Officials say they plan to launch the database in January 2024.

More Russia sanctions. The U.S. government has sanctioned Russian lender Rosbank and has expanded sanctions against VTB, one of the country’s largest banks, in a move to further limit the Russian government’s efforts to fund its war in Ukraine.

The Treasury Department’s Office of Foreign Assets Control on Thursday announced sanctions against 17 subsidiaries of VTB, building on sanctions placed on the parent company in February, after Russia invaded Ukraine.

• European Union leaders raised concerns about a corruption scandal at the bloc’s Parliament on Thursday.
   
• The Senate’s move to expand a ban on TikTok being downloaded on government-issued smartphones and other devices faces a doubtful future in the House, despite widening concerns over the Chinese-owned video app’s security risks.
   
• A former Twitter Inc. employee, Ahmad Abouammo, was sentenced to 42 months in prison after being found guilty in August of spying for Saudi Arabia.
   
• The U.S. said it would add China’s most advanced memory-chip manufacturer to an export blacklist on Thursday, ratcheting up restrictions aimed at holding back the development of the country’s semiconductor industry.

Economic slowdown. U.S. retail spending and manufacturing weakened in November, signs of a slowing economy as the Federal Reserve continues its battle against high inflation.

November retail sales fell 0.6% from the prior month for the biggest decline this year, the Commerce Department said Thursday. Budget-conscious shoppers pulled back sharply on holiday-related purchases, home projects and autos. Manufacturing output declined 0.6%, the first drop since June, the Fed said in a separate report.

U.S. stock losses deepened Thursday, after central bank officials on both sides of the Atlantic signaled they have more work to do to tame inflation and a batch of fresh data heightened recession fears.

China wants growth again. The Chinese government is shifting back to growth mode, as a rapid deterioration in economic conditions prompts alarmed officials to turn more of their focus to development after years of criticizing cadres who gave priority to growth at the expense of social stability and fiscal prudence.

He Lifeng, who was added to the Communist Party’s top policy-making body, the Politburo, at a party conclave in October, is drafting a growth plan of more than 5% for next year, according to people familiar with the matter.

China’s economy took a hit in November in what economists hope will be the last big squeeze on growth from a zero-tolerance strategy toward Covid-19 that Beijing has since abandoned.

• The European Union cemented its pledge to provide Ukraine with more than $19 billion in funding next year. Meanwhile Ukraine, seeking to destabilize occupying Russian forces, has stepped up attacks.
   
• France has restarted five nuclear reactors over the past week and cut electricity consumption sharply, easing fears the country will have to resort to rolling blackouts this winter.
   
• Three years after Covid-19 began, U.S. intelligence agencies still haven’t made changes needed to provide better warnings of global health crises and support U.S. leaders when the next pandemic hits, a House Intelligence Committee report concluded.
   
• Countries in the European Union are set to start collecting additional taxes in 2024 under a long-stalled global deal to set a minimum rate on company profits, after Hungary and Poland dropped their objections to the move.

Citigroup pulls back from China. The bank is winding down its consumer-banking operations in China, the latest step in its retreat from the business in Asia.

The move followed a strategic shift for Citi last year, one of the first big steps taken by Chief Executive Jane Fraser after she got the top job. The U.S. bank laid out plans to shed most of its retail operations in Asia and devote resources to wealth management and corporate customers.

Titi Cole, Citi’s chief executive of legacy franchises, said the bank had explored “multiple strategic options for our China consumer business over the past several months” before deciding to exit it. The bank still wants to sell portfolios from the business.