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The Morning Risk Report: Raskin Could Face Rough Confirmation Battle for Banking Supervision Post
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Good morning. Sarah Bloom Raskin, President Biden’s pick to become the Fed’s top banking regulator, could face a contentious nomination process due to her support for tougher banking rules and for using financial regulation to address climate-change positions cheered by progressives but criticized by some Republicans.
Still, Ms. Raskin is unlikely to face the kind of industry opposition that helped torpedo the nomination of Saule Omarova, an academic Mr. Biden tapped last year for a separate post overseeing national banks. That fight was led by community banks who have a more favorable view of Ms. Raskin from her former stints in government.
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“She’s outstanding and she understands the role of the Fed governors,” said Cam Fine, the former head of the Independent Community Bankers of America, a trade group. “She’s a tough regulator, don’t get me wrong, but she’s very fair.”
Rob Nichols, president and chief executive officer of the American Bankers Association, which opposed Ms. Omarova, congratulated Ms. Raskin on her nomination. He said he looked forward to learning more about her views during the confirmation process.
Related: Sarah Bloom Raskin in Her Own Words
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Google said a lawsuit by state attorneys general was ‘full of inaccuracies and lacks legal merit.’ PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Google misled publishers and advertisers for years about the pricing and processes of its ad auctions, creating secret programs that deflated sales for some companies while increasing prices for buyers, according to newly unredacted allegations and details in a lawsuit by state attorneys general.
Meanwhile, Google pocketed the difference between what it told publishers and advertisers that an ad cost and used the pool of money to manipulate future auctions to expand its digital monopoly, the newly unredacted complaint alleges. The documents cite internal correspondence in which Google employees said some of these practices amounted to growing its business through “insider information.”
The unredacted filing on Friday in the U.S. District Court of the Southern District of New York came after a federal judge ruled this week that an amended complaint filed last year could be unsealed.
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Citigroup Inc. is sticking with its Covid-19 vaccine mandate for its U.S. workers. General Electric Co. is not.
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The two American companies are going in opposite directions after the Supreme Court blocked the Biden administration’s rule that big employers require their employees to get vaccines or submit to testing.
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Martin Shkreli, the so-called pharma bro embroiled in a drug-pricing scandal, was banned for life from the pharmaceutical industry on Friday after a federal court found that he engaged in illegal and monopolistic behavior.
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Activision Blizzard Inc. has fired or pushed out more than three dozen employees and disciplined about 40 others since July as part of efforts to address allegations of sexual harassment and other misconduct at the videogame giant, according to people familiar with the situation.
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A local Chinese regulator said it is investigating a Walmart Inc. Sam’s Club store over food-safety issues, another sign of increased scrutiny by Chinese authorities of the U.S. retailer amid rising geopolitical tensions between Beijing and Washington.
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A Ukraine army soldier in position against Russian-backed separatists in Ukraine’s Donetsk region. ANATOLII STEPANOV/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Europe’s relations with Russia are sinking to depths unprecedented in the three decades since the collapse of the Soviet Union.
After more than 20 years in power, President Vladimir Putin is rattling his European neighbors more than ever, signaling that he might invade Ukraine, deploying troops to shore up the autocracy in Kazakhstan, weaponizing his country’s natural-gas exports and demanding sweeping security concessions from the West.
Mr. Putin, about to turn 70, has recently helped inflict a new migration crisis on Europe: Moscow’s client state Belarus is funneling refugees from the Middle East into the European Union, with the Kremlin telling the bloc that it must come to a financial arrangement with Belarus to stop the influx. And, while stopping short of taking responsibility, Mr. Putin has spoken approvingly about a series of high-profile murders of Russian exiles in the West that European authorities have blamed on Moscow’s secret services.
Related:
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Chief executives have plenty of concerns heading into 2022. And yet many are optimistic about this year, saying they have stopped trying to guess when the virus will stabilize and instead are shifting their operations in ways that allow them to better cope with future surprises.
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The outlook for economic growth in the first quarter and 2022 is darkening amid the latest wave of Covid-19, as consumers grapple with high inflation and businesses juggle labor and production disruptions.
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It will take at least two years before global unemployment falls back to pre-pandemic levels, according to fresh projections, with joblessness in poor countries remaining high even as labor markets in rich countries become increasingly tight.
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China’s leaders are hoping that they can put a floor under the economy, which officials said Monday expanded by just 4% in the fourth quarter of last year, the slowest pace since the beginning of the Covid-19 recovery in the second quarter of 2020.
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Saudi Arabia courted the world’s top companies to modernize its economy. Instead, the business environment has grown more hostile and investors are souring on the oil-rich kingdom.
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North Korea test-fired two suspected short-range ballistic missiles off its east coast on Monday, South Korean and Japanese militaries said, in what is Pyongyang’s fourth weapons launch of the month.
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As the Biden administration tries to revive the 2015 Iran nuclear deal, one of the biggest obstacles is Tehran’s demand that the U.S. provides a guarantee that it won’t again quit the pact and reimpose sanctions, diplomats involved in talks in Austria say.
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U.S. retail spending and manufacturing slowed at the end of 2021 as the Covid-19 Omicron variant and inflation surged, early signs the latest complications from the pandemic could be weighing on the economy.
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The Justice Department in November unsealed an indictment against an alleged REvil operator and Russian national, Yevgeniy Polyanin. PHOTO: ANDREW HARNIK/ASSOCIATED PRESS
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The Russian government on Friday said it had arrested members of the prolific criminal ransomware group known as REvil that has been blamed for major attacks against U.S. business and critical infrastructure, disrupting its operations at the request of U.S. authorities.
Russia’s security service, the FSB, said in an online press release that it had halted REvil’s “illegal activities” and seized funds belonging to the group from more than two dozen residences in Moscow, St. Petersburg and elsewhere. REvil members were arrested in relation to money-laundering charges, the FSB said. It didn’t provide names of any of the suspects.
The arrests included “the individual responsible for the attack on Colonial Pipeline last spring,” a particularly devastating ransomware offensive that led to the main conduit of fuel on the U.S. East Coast being shut down for days, a senior Biden administration official said. A different Russian ransomware gang had previously been linked to the Colonial hack, but security experts and officials have said they are not neatly defined and that individual hackers often overlap.
“We welcome reports the Kremlin is taking law enforcement steps to address ransomware within its borders,” the official said.
Related: What the Russian Crackdown on REvil Means for Ransomware
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Among its recent scandals, Credit Suisse said last year it had incurred a $5 billion loss when investment firm Archegos defaulted on large stock positions. PHOTO: STEFAN WERMUTH/ BLOOMBERG NEWS
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He came to fix Credit Suisse Group AG’s broken culture. Then he became part of the problem.
António Horta-Osório was hoping for a slap on the wrist Sunday from the Credit Suisse board for breaking coronavirus quarantine rules on trips to events, according to people familiar with his departure. Instead, he had to leave his job as the bank’s chairman for not upholding the high standards he set when joining Credit Suisse eight months ago.
Mr. Horta-Osório had to leave after most members of the board refused to back him at a meeting that ran late into the Zurich evening, ending weeks of attempts by the bank to contain its latest crisis. A bank probe into Mr. Horta-Osório’s travel found he had breached quarantine rules in England and Switzerland since starting at Credit Suisse, including to attend the Wimbledon tennis final in July.
The Portugal-born banker also used private aircraft hired by Credit Suisse to combine personal travel and work trips that made some on the board uncomfortable, according to people familiar with the matter.
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McDonald’s Corp. Chief Executive Chris Kempczinski is starting the year at the helm of one of the world’s most recognizable restaurant brands battling the latest coronavirus variant, rising inflation and workforce shortages.
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Walmart Inc. is shuffling top executives as the retail behemoth works to keep its pandemic growth streak alive and move faster to build its online business.
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A coal-fired power plant in Hanchuan, China. Chinese officials say it will take years to shift away from coal, particularly since the country’s economy is still growing quickly. PHOTO: GETTY IMAGES
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World leaders made a lot of bold pledges to curb greenhouse-gas emissions at the Glasgow climate conference in November. Now, countries and companies face the prospect of making good on those promises, in the face of political and economic headwinds.
In the latest sign of those difficulties, the $2 trillion bill that contained most of the U.S. administration’s climate initiatives got a blow in mid-December, when Sen. Joe Manchin (D., W.Va.) said he wouldn’t support it, citing concerns including the bill’s cost amid inflation.
The challenge was already formidable. By the end of the United Nations climate summit, known as COP26, more than 150 countries had announced new or updated steps to combat global warming by 2030, according to a U.N. report titled “The Heat is On: A world of climate promises not yet delivered.” Some 74 countries had made promises to eliminate or offset emissions—known as “net zero”—by dates ranging from 2030 to 2070.
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A partner at law firm Cooley LLP got an unexpected call late last year from a Tesla Inc. lawyer delivering an ultimatum. Elon Musk, Tesla’s CEO, wanted Cooley, which was representing Tesla in numerous lawsuits, to fire one of its attorneys or it would lose the electric-vehicle company’s business, people familiar with the matter said.
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The chief executives of major passenger and cargo airlines said there could be significant flight disruptions when new 5G service goes live in the U.S. this week, unless implementation of the wireless service within two miles of major airport runways is delayed.
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Citigroup Inc. agreed to sell its consumer-banking franchises in Indonesia, Malaysia, Thailand and Vietnam to United Overseas Bank Ltd., advancing its strategy to exit most of its retail operations in Asia and free up resources to deploy in wealth management and in serving corporate customers.
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Unilever is seeking to shift focus toward high-growth businesses including health, beauty and hygiene. PHOTO: PIROSCHKA VAN DE WOUW/REUTERS
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Unilever PLC said it wants to push further into health, beauty and hygiene products at the expense of slower-growing food brands, laying out its biggest strategic shift in years after disclosing a $68 billion approach for GlaxoSmithKline PLC’s consumer-health business.
The maker of Dove soap and Ben & Jerry’s ice cream said Monday that buying GSK Consumer Healthcare, which sells everything from Aquafresh toothpaste to Advil painkillers, would be accompanied by significant divestitures as it looks to rejigger its portfolio toward higher-growth categories.
Unilever on Saturday said it had made a takeover approach for the business, which is 68% owned by Glaxo and 32% by Pfizer Inc. A successful deal would be Unilever’s largest-ever acquisition and greatly expand its presence in oral care and vitamins, as well as give it a new foothold in over-the-counter medicines.
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A nurse tends to a patient in the acute-care unit of Harborview Medical Center in Seattle. PHOTO: ELAINE THOMPSON/ASSOCIATED PRESS
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The Omicron variant is continuing to generate high numbers of new infections, with hospitalizations climbing to levels that are threatening to pile more pressure on medical services, while some European countries are seeing a fall in new cases and Chinese authorities worry about the potential for new infections ahead of the busy Lunar New Year travel period.
The seven-day average for confirmed and suspected Covid-19 hospitalizations in the U.S. was at the highest recorded level over the weekend, with about 155,958 reported Sunday, after topping old records last week, data from the U.S. Department of Health and Human Services show. The seven-day average for newly reported cases also reached nearly 808,000 a day on Saturday, the first time it has breached 800,000, data from Johns Hopkins University show.
There are signs that the pandemic could be losing momentum, however, after new infections began to slow in some of the first U.S. hot spots, including New York, firming up a trend already established in places such as South Africa and the U.K., which were also hit early on with Omicron.
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The Covid-19 pandemic is widening the gap between rich and poor countries, a trend that threatens to reverse years of economic progress and set back efforts to alleviate global poverty.
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Chinese aviation authorities ordered more flights from the U.S. canceled for the coming weeks, along with flights from countries including France, Indonesia and the United Arab Emirates, citing Covid-19 containment rules.
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