Headlines

German prosecutors raided the finance and justice ministries on Thursday as part of an investigation into the government’s anti-money laundering agency, putting a spotlight on Germany's failings in tackling financial crime, Reuters reported. The probe into the Financial Intelligence Unit, an agency of the finance ministry under Social Democrat chancellor candidate Olaf Scholz, is looking at whether it was told to ignore warnings of suspect payments to Africa.

The U.S. Department of Justice (DOJ) investigation into German insurer Allianz is looking at possible misconduct by fund managers and misrepresentation of risk to investors, three people with knowledge of the matter told Reuters. The probe, disclosed by the company on Aug. 1, is focused on Allianz funds that used complex options strategies to generate returns but racked up massive losses when the spread of COVID-19 triggered wild stock market swings in February and March 2020.

Lebanon’s new prime minister pledged Friday to gain control of one of the world’s worst economic meltdowns, saying lifting subsidies was a critical priority for the small country’s government formed after a year of political stalemate, the Associated Press reported. It is a momentous task facing the 24-minister Cabinet, which includes fresh faces who are prominent experts in their fields, but which still reflects Lebanon’s fractious politics. The country’s economic crisis, unfolding since 2019, has been described as one of the worst in the world in the last 150 years.

European Union finance ministers said on Friday that changes to EU budget rules, now under review, should support investment in the post-pandemic economy and allow for a more realistic path in cutting some countries' huge public debts, Reuters reported. Finance ministers from the 27-nation bloc are starting discussions during a two-day summit in the Slovenian town of Brdo on how to amend the rules to better fit changed economic realities once they are reinstated from 2023. "We will need a debt reduction path that is realistic for all member states.

As Mexico’s economy rebounds from its biggest recession in almost a century, investors are piling back into the debt of the worst affected companies, in the worst affected industries, Bloomberg News reported. Defaulted bonds sold by hotel chain Grupo Posadas SAB, broadcaster TV Azteca SAB and flagship airline Grupo Aeromexico SAB are all among the top ten returning notes over the last three months, landing investors gains of at least 13%. Each company is benefiting from the turnaround of Mexico’s fortunes, driven mainly by an economic boom in the U.S., the nation’s biggest trading partner.

Brazilian Economy Minister Paulo Guedes on Friday outlined a rosier outlook for Latin America's largest economy in 2022, predicting a "robust" GDP growth and inflation meeting its target, Reuters reported. "I have a constructive and positive view that we're going to post a robust growth next year," he said. Market participants see GDP growth at mere 1.93%, according to a central bank survey released last week. In an event hosted by Credit Suisse, Guedes said inflation is likely to be at 5% next year, the upper part of a range.

Colombia’s rapid recovery and growing inflationary pressure mean the central bank will need to pare back the amount of stimulus it’s providing the economy, bank Governor Leonardo Villar said, Bloomberg News reported. “We saw the need to begin reducing the magnitude of stimulus,” Villar said in a presentation Thursday, referring to the central bank board’s discussion in its last policy meeting in July. “That doesn’t mean eliminating stimulus altogether.” The bank will begin to lift interest rates “gradually”, he said, without specifying when it will start.

The Canadian economy is moving closer to a point where the Bank of Canada will no longer need to continue adding stimulus through its quantitative easing (QE) program, but it is not there yet, Governor Tiff Macklem said on Thursday, Reuters reported. Macklem, in a speech the day after the central bank held its key rate at 0.25%, said it would eventually move to a reinvestment phase, where it bought only enough bonds to replace those that are maturing. This maintains stimulus but does not add new stimulus.

Reliance Infrastructure Ltd. won a four-year battle for control of money from an arbitration award that it says it needs to repay lenders, Bloomberg News reported. A two-judge panel of the Indian Supreme Court on Thursday upheld the 2017 arbitration award in favor of the Anil Ambani’s unit. The arbitration tribunal award is worth over 46.6 billion rupees ($632 million) including interest, according to Reliance Infrastructure’s annual report. Reliance Infrastructure Ltd. won a four-year battle for control of money from an arbitration award that it says it needs to repay lenders.

Mexico's government on Wednesday proposed sharply reducing the tax burden for state oil firm Petroleos Mexicanos and forecast economic growth of 4.1% for 2022, as Latin America's second largest economy continues to recover from a COVID-19-induced slump, Reuters reported. The finance ministry's 2022 draft budget, which it presented to Congress earlier in the day, laid out a profit sharing rate (DUC) - effectively a tax paid to the government - of 40% for the oil giant known locally as Pemex.