Tag: Banks

Big Canadian banks may be making misleading claims on sustainability, says securities complaint

Canada’s big five banks are potentially misleading investors with their use of terms like sustainable finance, according to a complaint to securities regulators by a climate advocacy group.

Banks are using the term “sustainable finance” too broadly and not backing up the claims with data, Investors for Paris Compliance said in its submission Tuesday to the Ontario Securities Commission and the Autorité des marchés financiers of Quebec.

Canadian banks, including RBC, TD, BMO, CIBC and Scotiabank, have all made pledges on sustainable finance that together total $2 trillion by 2030.

Sustainable finance covers a range of lending activities aimed at advancing mostly environmental and social causes. The financing can be anything from green bonds funding a specific renewable energy project to loans that go to general corporate use but are tied to sustainability-linked performance targets.

The commitments form a key part of their sustainability efforts, but banks are providing little to back up their effectiveness, said Matt Price, executive director of advocacy group Investors for Paris Compliance.

“They’re putting this in the window as one of their core responses to climate change and net zero, when they’re not rationalizing or justifying or providing any evidence or proof about that.”

LISTEN | Rethinking banks’ investments in fossil fuels: 

The Current19:33Rethinking banks’ investments in fossil fuels

In an interview with CBC News, Investors for Paris Compliance said it would like to see more investment in sustainable businesses, and it’s not trying to challenge that. The group says it’s looking for accurate promises.

“We just want to make sure that investors can hold the banks accountable to their claims,” said Kyra Bell-Pasht, director of research and policy for Investors for Paris Compliance.

A woman in a scarf and glasses looks to camera in the CBC Toronto atrium.
Kyra Bell-Pasht is Director of Research and Policy with Investors for Paris Compliance. Her group claims multiple Canadian banks
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Goldman, HSBC join forces with other banks on client disclosures

The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City

The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly/File Photo Acquire Licensing Rights

  • Five banks aim to apply share rules more consistently
  • Interpretations can leave positions under-reported

LONDON, Sept 25 (Reuters) – Goldman Sachs and HSBC (HSBA.L) are among a group of five banks adopting a common global approach to disclosing clients’ stock positions, a move which participants say could help cut costs and bolster transparency.

The group, which also includes Barclays (BARC.L), BNP Paribas (BNPP.PA) and one other bank, is working on a tool to minimise the risks of under-reporting, particularly when investors make so-called short bets or build stakes using derivatives, two sources told Reuters.

Regulators require investors to report the securities they hold when certain thresholds are breached, which requires complex, time-consuming analysis of the rules. If there is room for interpretation, this can lead to missteps and penalties.

Banks have been investing in so-called RegTech to cut the costs of complying with such rules through automation.

Now the group of five banks, working with RegTech specialist Droit, is looking to streamline efforts and further lower costs.

Goldman Sachs (GS.N) Global Head of Position Regulatory Reporting, Pete Chisholm, told Reuters that the initiative, called Endoxa, is the first bank-led consortium to tackle global rules on disclosures reporting,

“This is about whether all the banks across the world understand the rules exactly the same,” Chisholm said, adding there was “a risk that the market data the public relies on could be inaccurate because of the lack of commonality”.

BNP Paribas Global Head of Financial Markets Compliance Kara Lemont said in a statement the scheme should reassure regulators and legislators that rules were being applied consistently.

Spokespeople for

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Canadian banks’ profits seen pressured by slower dealmaking, mortgage growth

A Royal Bank of Canada logo is seen on Bay Street in the heart of the financial district in Toronto

A Royal Bank of Canada (RBC) logo is seen on Bay Street in the heart of the financial district in Toronto, January 22, 2015. REUTERS/Mark Blinch/File Photo Acquire Licensing Rights

  • RBC, TD to kick off Canadian banks’ Q3 earnings Thursday
  • Most banks likely to show a rise in bad debt provisions
  • A slump in dealmaking, capital-raising to weigh on revenues

TORONTO, Aug 22 (Reuters) – Canada’s big bank results are expected to bring to light a number of challenges as lenders set aside more funds for bad loans in a tough economy that has also led to a slowdown in dealmaking and forced borrowers to rethink about new mortgages.

The big six banks, which control a majority of the market in the country, have had to brace for macroeconomic uncertainties and build reserves while also ensuring they have enough capital to meet new regulatory requirements in case of uncertainties.

“We expect another challenging quarter for the group,” KBW analyst Mike Rizvanovic said, adding that he expects slowing loan growth, higher expenses and higher provisions for credit losses.

The shares of the top five banks – Royal Bank of Canada , TD Bank (TD.TO), Bank of Montreal (BMO.TO), Bank of Nova Scotia (BNS.TO) and CIBC (CM.TO) – have lost between 2% and 8% so far this year. National Bank (NA.TO) has gained about 9% while the broader Toronto Stock Exchange’s index (.GSPTSE) has risen 2.2%.

The Bank of Canada has hiked interest rates ten times since March 2022, most recently in June after a brief pause in March. While the rate hikes help improve margins from money banks earn by lending out cash, the rates impact mortgages and borrowing costs.

Those dynamics, among others, have forced Bay Street analysts to lower their estimates but have largely maintained their rating to reflect

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Explainer: Banks tread tricky tightrope with politically exposed clients

LONDON, July 26 (Reuters) – The war of words between NatWest (NWG.L) and erstwhile customer Nigel Farage has underscored the challenges global banks face in handling clients who could be defined as a politically exposed person, or PEP.

Banks are obliged to deny services to individuals subject to international sanctions or who are suspected of money-laundering or financing terrorists.

Lenders are obliged to apply extra scrutiny to customers identified as PEPs under international standards, but they are prohibited from ceasing business with customers who clash with their self-proclaimed institutional values.

Top UK regulators and government ministers have spoken out in defence of freedom of expression, and have said banks should not bar non-sanctioned customers on political grounds.

CAN MY BANK CLOSE MY ACCOUNT IF MANAGEMENT OBJECT TO MY POLITICS?

Banks are prevented by law from discriminating against customers on the basis of their political views. The UK government is seeking to tighten supervision of banks suspected of making politically motivated decisions to deny services to customers who hold lawful opinions.

But expressing views on race that may be construed as inciting racial hatred could serve as justification for jettisoning a customer, as this is considered an offence under UK law.

Banking lobby group UK Finance said last week that lenders could close an account for several reasons but must treat customers fairly.

Closing accounts for commercial reasons is permitted, such as when an private banking or wealth management account falls below a certain threshold in size.

In 2017, French far-right politician and former presidential runner Marine Le Pen accused HSBC (HSBA.L) and Societe Generale of a “banking fatwa” after her accounts and accounts linked to her party were shuttered by the lenders.

Commenting at the time, HSBC said its relationships with customers were “governed by a set of regulatory obligations

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US banks scramble on research fees as reprieve on European rules runs out

NEW YORK, June 28 (Reuters) – Wall Street banks and brokerages are in a last-minute scramble to meet a July 3 deadline to charge investors for research reports, bankers and others in the industry said, a requirement that threatens their European business if they fail to comply.

Bank of America Corp (BAC.N) and Jefferies Financial Group were among the earliest U.S. banks to comply with the rules – but many others have not yet met the standards and are rushing to catch up, they said.

Failure to do so could mean losing millions of dollars worth of business as U.S. firms must comply to continue providing research-related services to European clients. Many in the banking industry had hoped a regulatory reprieve in place since October 2017 would be extended beyond July 3, analysts said, explaining the reason behind the eleventh-hour scramble.

The challenge is more likely being felt by smaller and regional firms who lack European operations rather than the largest Wall Street banks, who are expected to meet the deadline, analysts said.

Banks typically provide research to clients as part of a broader offering of services, but that changed when the European Union introduced the Markets in Financial Instruments Directive (MiFID) II laws in 2018 to improve transparency.

Since then, firms operating in the European Union have been required to “unbundle” or itemize charges to investors for research such as stock picks, bespoke studies and meetings with analysts. The fees are separate from those charged for executing trades.

“It took about a year for us to become compliant to MiFID II laws — it was a long, intense process,” said Candace Browning, head of BofA Global Research. “There were definitely negotiations, there were detailed conversations with clients.”

U.S. financial firms were initially given an exemption by the U.S. Securities

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With Banks Facing Threats, Where Should a Small Business Keep Large Deposits?

Experts say businesses have a lot of options for storing their money safely—and they don’t necessarily involve stashing their cash with “too-big-to-fail” megabanks. 

The failures of three medium-sized banks this spring rattled small business owners, who often have deposits in excess of the $250,000 that’s protected by the Federal Deposit Insurance Corporation. Almost two-thirds of small businesses keep their money in small or regional banks, according to an April survey by the National Federation of Independent Businesses. And 70% of business owners said they were at least slightly concerned about the financial health of their banks in the wake of the collapse of Silicon Valley and Signature banks. 

Key Takeaways

  • Many small business owners are worried about the safety of their money after recent turmoil in the banking system, and ongoing threats to its financial stability.
  • It may be wise to spread balances between different institutions to stay under the $250,000 protected by the Federal Deposit Insurance Corporation, experts say.
  • Financial advisors and other financial services providers can help make spreading money between accounts easy for business owners.

The Risk Realities

While no banks have failed since early May, storm clouds may still be on the horizon. Small banks are especially exposed to the commercial real estate market, having heavily financed office projects that have plummeted in value amid the rise of remote work, the Government Accountability Office warned in a report last week. 

However, Mike Periu, a consultant specializing in small business finance, said businesses shouldn’t necessarily worry about how safe their money is in a credit union or a small bank, which tend to offer better terms and interest rates than larger national institutions. After all, this spring, federal regulators quickly stepped in to ensure that depositors at Silicon Valley and the other stricken banks were made whole,

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Small Business Financing to Bypass Traditional Banks

  • Venture capitalists can provide funding, networking and professional guidance to launch your business rapidly.
  • Generally, angel investors don’t ask for any company shares or claim to be stakeholders of your business.
  • Businesses focused on science or research may receive grants from the government.
  • This article is for small business owners who need information on alternatives to traditional bank loans.

Starting your own company can be a daunting but rewarding process. While a great business plan is crucial for founders, financing is one of the most important elements a company needs to succeed.

However, financing a startup or small business can be a difficult, drawn-out process, especially for those with poor credit. While there is no minimum credit score you must have to get a business loan, traditional lenders have a range they usually consider acceptable.

If you have a low credit score and no collateral to offer, consider an alternative loan. In this article, we break down 11 small business funding options, examine the benefits of alternative lending and provide tips on how to finance your business.

Why is it difficult for small businesses to get loans from banks?

Capital is difficult for small businesses to access for several reasons. It’s not that banks are against lending to small businesses – they want to – but traditional financial institutions have an outdated, labor-intensive lending process and regulations that are unfavorable to local shops and small organizations. 

The difficulty of accessing capital is exacerbated because many small businesses applying for loans are new, and banks typically want to see at least a five-year profile of a healthy business (for instance, five years of tax data) before extending an offer.

What is alternative financing?

Alternative financing is any method through which business owners can acquire capital without the assistance of traditional banks.

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Significant US banks inject $30 billion to rescue To start with Republic Bank

March 16 (Reuters) – Significant U.S. banking companies injected $30 billion in deposits into 1st Republic Bank (FRC.N) on Thursday, swooping in to rescue the lender caught up in a widening disaster activated by the collapse of two other mid-measurement U.S. loan providers in excess of the previous 7 days.

Banking stocks globally have been battered considering the fact that Silicon Valley Bank collapsed previous 7 days because of to bond-similar losses that piled up when desire costs surged past calendar year, elevating issues about what else could be lurking in the broader banking method.

Inside of times, the industry turmoil had ensnared Swiss lender Credit rating Suisse (CSGN.S), forcing it to borrow up to $54 billion from Switzerland’s central lender to shore up liquidity.

By Thursday afternoon, the highlight whipsawed back to the United States as huge banks led an effort and hard work to prop up aid for Very first Republic, a regional loan company whose shares had tumbled 70% in the previous 9 trading sessions.

Initial Republic Bank’s inventory sector collapse

Some of the most significant U.S. banking names such as JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N), Financial institution of The united states Corp (BAC.N), Wells Fargo & Co (WFC.N), Goldman Sachs (GS.N) and Morgan Stanley (MS.N) have been associated in the rescue, in accordance to a statement from the financial institutions.

The offer was place together by ability brokers which includes U.S. Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell and JPMorgan Chase CEO Jamie Dimon, who talked over the deal on Tuesday, in accordance to a source acquainted with the predicament.

U.S. regulators said the show of assist was most welcome, and confirmed the resilience of the banking process.

A round of financing on Sunday elevated as a result of JPMorgan experienced

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Why Amalgamated Bank’s CEO Thinks We Need the Gun Code

On March 9, the main U.S. credit history card companies, Visa, Mastercard, and American Specific, announced that they had been not heading forward with applying a new code that identifies purchases from gun shops as unique from purchases from big-box or other outside suppliers. The code, approved in September 2022 by the International Corporation of Standardization (ISO), which regulates the international protocols by which credit organizations abide, has been the topic of extreme criticism from Republican lawmakers.

The new classification was first proposed in 2021 by Amalgamated Financial institution, a 100-12 months-outdated U.S. lender that seeks to be a socially dependable fiscal-products and services supplier. In a statement, Amalgamated’s CEO, Priscilla Sims Brown, reported that it was unlucky that “an vital measure to assistance regulation enforcement discourage prison activity and gun violence has been placed on maintain,” but that just as the ISO took a few months to arrive all-around to the value of the code, she’s self-assured “the business will put into practice this commonsense way to maintain our communities safe.” In a dialogue with TIME in December 2022, Sims Brown spelled out why she thinks the code would be successful.

Amalgamated Bank petitioned the ISO to develop a service provider code particularly for gun stores. I speculate if you could describe how you believe it will support stop gun violence?

I feel it will support with illegal gun buys, which can guide to gun violence, since it is a single of numerous actions in a approach to detect illegal activity. There are specified designs that gun criminals abide by. If we can detect those styles ahead of the real criminal offense remaining dedicated, we may possibly be equipped to deal with the illegal obtain prior to the crime.


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What are those people designs?

There

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