Headlines

The company behind the tether stablecoin has increasingly been lending its own coins to customers rather than selling them for hard currency upfront, the Wall Street Journal reported. The shift adds to risks that the company may not have enough liquid assets to pay redemptions in a crisis. Tether Holdings Ltd. says it lends only to eligible customers and requires that borrowers post lots of “extremely liquid” collateral, which could be sold for dollars if borrowers default. These loans have appeared for several quarters in the financial reports that Tether shows on its website.
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Italy is set to toughen regulation of digital assets and expand taxation on crypto trading from 2023, following similar moves by countries such as Portugal, Bloomberg News reported. A provision in the country’s proposed 2023 budget plans to extend a 26% levy on capital gains to digital assets for profits larger than 2,000 euros ($2,062.3). Digital coins and tokens so far have been treated as foreign currency by Italy’s tax authorities, which implied a lower taxation.
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The surge in private equity activity in Europe in recent years has loaded hundreds of companies up with debt, eroded their credit ratings, and left many of them vulnerable to bankruptcy as an economic recession approaches, Bloomberg News reported. There were 762 private equity buyouts last year in Western Europe for a total of $336 billion, according to data compiled by Bloomberg, the highest since 2007.
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Ongoing Russian attacks on Ukrainian civilian infrastructure have increased the cost to keep Ukraine's economy going next year, adding up to $1 billion a month to previous estimates of $3-$4 billion, the head of the International Monetary Fund told the Reuters. IMF Managing Director Kristalina Georgieva said she was confident that the European Union, United States and other international partners would continue to provide needed support for Ukraine.
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European Union member states on Thursday reached a deal on rules that would force large companies to check whether their suppliers use slave or child labour, or pollute the environment, but with an optional exemption for financial services, Reuters reported. Known as corporate sustainability due diligence, the rules were proposed by the European Commission earlier this year and would be applied to around 13,000 large companies, requiring them not just to identify impacts but also take measures to mitigate or end them.
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German retail sales fell more-than-expected in October, data showed on Thursday, as inflation had consumers holding back on non-essential purchases at the start of the fourth quarter, Reuters reported. Retail sales were down 2.8% on the month in October. Compared with October 2021, retail sales were down 5.0%. Germany's HDE retail association is forecasting the strongest slump in Christmas sales since 2007, with retail sales in the crucial November-December period seen dropping by 4% year-on-year on a price-adjusted basis.
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European Union states are starting to coalesce around a plan to cap the price of Russian crude oil at $60 a barrel, their latest attempt to clinch an agreement before a Monday deadline, Bloomberg News reported. The bloc is also looking at a mechanism that would allow for regular evaluations and potential revisions of the price every two months from mid-January 2023, the people added. Two of the people said that there should be an agreement that any future resetting of the cap should leave it at least 5% below average market rates. They didn’t go into detail.
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German energy company Uniper said Wednesday it’s suing Gazprom for damages over natural gas that hasn’t been delivered since June, when the Russian supplier started reducing amounts to Germany, the Associated Press reported. Gas importer Uniper said that it has initiated proceedings against Gazprom Export at an international arbitration tribunal in Stockholm. It said the cost to replace gas that Russia failed to supply so far totals at least 11.6 billion euros ($12 billion) and that cost will continue to increase until the end of 2024.
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Saudi Arabia’s central bank has stepped up the use of a mechanism to pump money into the financial system as it looks to tackle a liquidity crunch that has helped push borrowing costs for lenders to the highest in decades, Bloomberg News reported. The latest intervention is relying on open market operations, the people said, transactions that allow the central bank to provide or drain short-term liquidity in exchange for securities from lenders. Unusually for a period of high oil prices, Saudi banks are facing a shortage of liquidity.
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Brazil's economic growth slowed more than expected in the third quarter as higher interest rates affected household spending, underscoring challenges facing President-elect Luiz Inacio Lula da Silva next year, Reuters reported. Gross domestic product rose 0.4% in the three months to September, government statistics agency IBGE said on Thursday, below the 0.7% growth forecast by economists polled by Reuters. Brazil's central bank have raised borrowing costs to a nearly six-year high to battle double-digit inflation this year, which has begun to weigh on domestic demand.
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