Overseas Headlines- January 23, 2019

United States:

 Fed to Probe Deutsche Bank Over Suspicious Danske Cash

The Federal Reserve is examining how Deutsche Bank AG handled billions of dollars in suspicious transactions from Denmark’s leading lender, according to people familiar with the matter, further intensifying what could be one of the biggest money-laundering scandals ever. The Fed’s probe is in an early stage as it scrutinizes whether Deutsche Bank’s U.S. operations adequately monitored funds from an Estonian branch of Danske Bank A/S, according to two people briefed on the situation, who asked not to be named because the inquiry isn’t public. Danske, which used correspondent banks such as Deutsche Bank to move money abroad, has admitted that much of about $230 billion that flowed through the tiny Estonian outpost may have been dirty. “There are no probes,” Deutsche Bank said in an emailed statement, but the bank “received several requests for information from regulators and law enforcement agencies around the world. It is not surprising at all that the investigating authorities and banks themselves have an interest in the Danske case and the lessons to be learned from it. Deutsche Bank continues to provide information to and cooperate with the investigating agencies.” The U.S. requires banks operating under its jurisdiction to scrutinize clients and their dealings to detect potential money laundering and alert authorities to suspicious transactions. The Fed is among regulators that ensure banks have adequate systems in place to fulfill those duties. A Danske Bank whistle-blower who outlined the illicit flow of cash through that firm has said much of it passed through Deutsche Bank in the U.S., and one of the people said the Fed is focusing on the German lender’s trust bank. Deutsche Bank has been cooperating with the Fed, the people said.

https://www.bloomberg.com/news/articles/2019-01-23/fed-is-said-to-probe-deutsche-bank-over-suspicious-danske-cash

Europe:

May Says Extending Exit Day Isn’t the Answer: Brexit Update

Parliament is inching toward a plan to delay Brexit as a way of preventing a chaotic no-deal departure. The pound rose. May faced repeated questions in the Commons over whether she should extend Article 50 and delay Brexit beyond March. She’s still against the idea, but her answers didn’t close the door on it. “Extending Article 50 I don’t believe resolves any issues,” May said. Parliament will still need to decide if it wants a deal, a no-deal Brexit, or no Brexit, she added. She also made the case that the House of Commons has already voted to take the U.K. out of the EU on March 29 by endorsing the Article 50 timetable. The pound broke back through the $1.30 level amid continued market optimism that Parliament moves are reducing the risk of a no-deal Brexit. The currency also got some traction on the overnight report that Labour is likely to support the Cooper-Boles plan to delay Brexit, according to Jeremy Stretch, head of Group-of-10 currency strategy at Canadian Imperial Bank of Commerce. With momentum in Parliament swinging toward delaying Brexit, anti-EU Conservatives are fighting back. They’ve proposed an amendment today that seeks to limit the amount of parliamentary time given to non-government business — the immediate impact would be to kill off the cross-party effort led by Yvette Cooper and Nick Boles to force a Brexit delay if there isn’t a deal. But the latest amendment will struggle to pass even if the government backs it. Boles and the nearly 20 other Tories who support him aren’t going to vote for it. It will, though, provide an interesting preview of next week’s arithmetic.

https://www.bloomberg.com/news/articles/2019-01-23/fox-warns-davos-no-deal-is-real-possibility-brexit-update

Asia:

Saudi Arabia Looks for Fun to Spur Economy

Saudi Arabia on Tuesday sought regional and international investment in its entertainment industry as part of a push to overhaul the economy for life after oil. Turki Al Alshikh, newly appointed chairman of the General Entertainment Authority, said the kingdom will seek to land big theatrical productions like “The Phantom of the Opera” and “The Lion King,” as well as regional and international circuses in 2019 and 2020. Saudi Arabia also wants to hold more competitions, exhibitions, bazaars, stand-up comedy shows and themed attractions, he said, adding investment in the sector could create tens of thousands of jobs for Saudis, “if not hundreds” of thousands. “Our doors are open,” Al Alshikh said. The kingdom has loosened the reins on the entertainment industry since Crown Prince Mohammed bin Salman assumed his de facto leadership, vowing to reform the energy-dominated economy. Authorities have lifted a 30-year ban on cinemas, while cafes are filled with music previously considered immoral in the conservative kingdom. Internationally known performers including Enrique Iglesias and Cirque du Soleil have packed arenas. But as energy prices have recovered, the world’s biggest crude exporter is finding it harder to break with its reliance on oil. Even as higher public spending is projected to drive non-oil economic growth to 2.6 percent in 2019, it remains below levels achieved before 2014, when crude prices collapsed, according to Bloomberg Economics.

https://www.bloomberg.com/news/articles/2019-01-22/-lion-king-to-stand-up-saudi-arabia-wants-fun-to-spur-economy?srnd=economics-vp

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2019-01-23T13:06:40-05:00