Banking direct deposit delays at Bank of America, Wells Fargo

Question-Marks

Important Takeaways:

  • Customers at Bank of America, Wells Fargo and other banks grappling with deposit delays
  • Customers at major U.S. banks including Bank of America and Wells Fargo complained about delays with their direct deposits on Monday, following a glitch with processing payments that began Friday.
  • The Federal Reserve on Friday said the problem wasn’t related to a cybersecurity issue and that it had been resolved. But customers on Monday continued to report delays with direct deposits, reaching out to their banks on social media to report that their paychecks hadn’t landed in their accounts as expected.
  • Wells Fargo and Bank of America referred questions to The Clearing House, a payments company that operates the only private-sector automated clearing house (ACH) system in the U.S.

Read the original article by clicking here.

Michael Snyder reports on 5 disasters that we were warned about that are happing now

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • #1 We were warned that a great commercial real estate crisis would be coming, and now it is here.
    • With recent stress in the regional banking sector, sentiment in US commercial real estate (CRE) – and especially the office sector – has turned negative as investors prepare for potential spillover effects (with JPM, Morgan Stanley, and Goldman Sachs all joining the gloom parade), especially as high-profile defaults continue to make headlines as borrowers face higher debt service costs and refinancing becomes much harder ahead of a $400 billion CRE debt maturities this year alone…
  • #2 We were warned that there would be widespread layoffs as economic conditions in the United States deteriorated. Sadly, that is now happening all around us.  For example, on Monday accounting firm Ernst & Young announced that they will be laying off thousands of highly paid workers…
  • #3 We were warned that the largest corporate debt bubble in the history of the world would eventually burst, and now corporations are beginning to default on their debts at a rate that should deeply alarm all of us
  • #4 We were warned that we would witness a dramatic surge in bankruptcies in 2023, and that is precisely what is happening
    • Bankruptcy filings across the United States rose for the third straight month in March in all major industries. A total of 42,368 new bankruptcies were filed last month, according to data from Epiq Bankruptcy, a provider of U.S. bankruptcy court data, technology, and services.
  • #5 We were warned that the rest of the world would eventually start rejecting the U.S. dollar, and now “de-dollarization” is happening at a “stunning” pace

Read the original article by clicking here.

Iran vows to sell as much oil as it can despite U.S. sanctions

FILE PHOTO: Iranian Vice President Eshaq Jahangiri speaks during a news conference in Najaf, south of Baghdad, February 18, 2015. REUTERS/Alaa Al-Marjani/File Photo

LONDON (Reuters) – Iranian vice president Eshaq Jahangiri acknowledged on Tuesday that U.S. sanctions would hurt the economy but promised to “sell as much oil as we can” and protect its banking system.

Jahangiri said Washington was trying to stop Iran’s petrochemical, steel and copper exports, and to disrupt its ports and shipping services. “America seeks to reduce Iran’s oil sales, our vital source of income, to zero,” he said, according to Fars news agency.

President Donald Trump said in May he would pull the United States out of an international nuclear deal with Iran and reimpose U.S. sanctions. Washington later told countries they must stop buying Iranian oil from Nov. 4 or face financial consequences.

Jahangiri said it would be a mistake to think the U.S. “economic war” against Iran will have no impact, but added: “We will make Americans understand this year that they cannot stop Iranian oil sales.”

The U.S. ambassador to Berlin called on the government of Chancellor Angela Merkel to block an Iranian attempt to withdraw large sums of cash from bank accounts in Germany.

Iran’s foreign ministry and the central bank have taken measures to facilitate banking operations despite the U.S. sanctions, Jahangiri said without elaborating.

The Iranian oil ministry said last week that it exported 2.2 million barrels per day of crude oil in June. The figure is not significantly lower than exports of 2.4 million bpd in April and in May.

ECONOMIC WAR

European powers still support the 2015 deal, under which Tehran agreed to limit its nuclear development in exchange for international sanctions relief. They say they will do more to encourage their businesses to remain engaged with Iran, though a number of firms have already said they plan to pull out.

Foreign ministers from the five remaining signatory countries to the nuclear deal — Britain, France, Germany, China and Russia — offered a package of economic measures to Iran on Friday but Tehran said they did not go far enough.

“We think the Europeans will act in a way to meet the Iranian demands, but we should wait and see,” Jahangiri said.

The pressure on Iran came as Washington had launched an “economic war with China and even its allies”, he said, referring to trade tensions between the United States and many of its main trading partners.

Jahangiri also accused Washington of trying to use the economic pressure to provoke street protests in Iran.

A wave of anti-government demonstrations against economic hardship and alleged corruption engulfed cities across the country in late December and early January.

(Reporting by Bozorgmehr Sharafedin; Editing by John Stonestreet, Andrew Heavens and David Stamp)

Pakistan could face economic pain from return to terrorist financing ‘gray list’

: Vehicles run past the Centaurus mall in Islamabad, Pakistan November 23, 2017. REUTERS/Faisal Mahmood

By Drazen Jorgic, Michelle Price and Sumeet Chatterjee

ISLAMABAD/WASHINGTON/HONG KONG (Reuters) – The prospect of Pakistan being placed back on a global terrorist financing watchlist could endanger its handful of remaining banking links to the outside world, causing real financial pain to the economy just as a general election looms.

Washington and its European allies have co-sponsored a motion calling for the nuclear-armed nation to be placed on a “gray list” of countries deemed to be doing too little to comply with anti-terrorist financing and anti-money laundering regulations, with a decision expected next week when member states of the Financial Action Task Force (FATF) meet in Paris.

The move is part of a broader U.S. strategy to pressure Pakistan to cut its alleged links to Islamist militants waging chaos in Afghanistan.

Pakistan, which denies such links, last month shrugged off a U.S. aid suspension worth $2 billion. But inclusion on the FATF watchlist could inflict real damage, bankers and government officials say.

Islamabad has sought to head off the motion by amending its anti-terrorism laws and by taking over organizations controlled by Hafiz Saeed, a Pakistan-based Islamist whom Washington blames for the 2008 Mumbai attacks that killed 166 people.

But there are concerns Pakistan’s nearly $300 billion economy, expanding at its fastest rate in a decade at above 5 percent, could lose steam if it ends up on the FATF watchlist, from which it was removed in 2015 after three years.

“We don’t think the consequences are going to be drastic but it’s definitely not good,” said one senior finance ministry official.

Military successes against militants and massive Chinese infrastructure investments have restored some vim to an economy hobbled by a long-running Islamist insurgency and wrecked by the 2008/09 global financial crisis.

Officials are aiming for economic expansion to hit 6 percent this fiscal year (July-June) and Prime Minister Shahid Khaqan Abbasi’s ruling party will want to avert a slowdown in the lead up to a general election due in about six months.

Being placed on the FATF watchlist carries no direct legal implications, but brings extra scrutiny from regulators and financial institutions that can chill trade and investment and increase transaction costs, according to experts.

Mike Casey, a partner at law firm Kirkland & Ellis in London, said being put back on the gray list would heighten Pakistan’s risk profile and some financial institutions would be wary of transacting with Pakistani banks and counterparties.

“Others might elect to avoid Pakistan altogether, viewing the legal risks associated with doing business there to outweigh any economic benefits,” he said.

CURRENT ACCOUNT DEFICIT

A decline in foreign transactions and a drop in foreign currency inflows could further widen Pakistan’s large current account deficit, the Achilles heel of an economy that required an IMF bailout in 2013 following a balance of payments crisis.

Another major worry is that the likes of Standard Chartered, the largest international bank in Pakistan with 116 branches, or Citibank and Deutsche Bank, who mostly deal with corporate clients, would pull out.

Banks have been retreating from high-risk countries in recent years amid intense pressure from global regulators to guard against money laundering and terrorist financing.

“The level of due diligence is already high in countries like Pakistan, but if this goes ahead then the banks will really have to reassess the risk-reward scenario,” said a senior executive with a large foreign bank, which has business interests in Pakistan.

In September, Pakistan’s biggest lender, Habib Bank, was fined $225 million and effectively forced to shut its U.S. operations by the New York regulator due to compliance failures over money laundering and terrorist financing.

U.S. watchdogs have dished out more than $16 billion in fines for anti-money laundering (AML) compliance failings since the end of 2009, according to data compiled by Hong Kong consultancy Quinlan & Associates.

“No one wants to be get caught in a situation where for a few million dollars of business the bank will have to pay billions in fines,” added the foreign bank executive.

There is no immediate indication the handful of international banks that remain are considering leaving Pakistan, and banking sources point out that these banks are well-versed with the risks of operating in the country.

Citibank, in a statement, said: “Citi complies with all applicable U.S. and international anti-money laundering requirements and economic sanctions.”

Standard Chartered said it was “closely monitoring the situation and as a matter of policy, we do not comment on market speculation”. Deutsche declined to comment.

RAISING MONEY

The FATF threat has begun to weigh on Pakistan’s stock market, although local businessmen say the country’s companies are accustomed to operating in tough conditions.

Yet some are unnerved.

One Pakistani money manager launching an alternative investment fund said he fears his new venture could now struggle to attract U.S and European investment.

“It’s already tough to raise money in Pakistan and anything to do with a ‘terror financing’ watchlist will just scare people,” said the fund manager. “There will be more scrutiny and some foreign funds will back away.”

A Pakistani finance ministry source said the government also fears a downgrade by the credit ratings agencies, making it harder or more expensive for Pakistan to raise debt on the international markets.

“It reduces our credibility in the world, which is unfair,” added Pakistan’s State Minister for Finance, Rana Afzal.

Some Pakistani officials say there is growing confidence in the country that recent efforts against Saeed, who was the focus of the FATF motion, will be enough to stave off further action.

“We’ve taken the wind out of their sails,” said one senior Pakistani government official. “If we now get punished, it would be a political move and vengeful.”

(Reporting by Drazen Jorgic in Islamabad, Michelle Price in Washington and Sumeet Chatterjee in Hong Kong; Additional reporting by Catherine Ngai and Anna Irrera in New York and Thomas William Arnold in Dubai; Writing by Drazen Jorgic; Editing by Alex Richardson)

Venezuela annual inflation at more than 4,000 percent: National Assembly

A woman and a child look at prices in a grocery store in downtown Caracas, Venezuela March 10, 2017.

By Girish Gupta

CARACAS (Reuters) – Prices in Venezuela rose 4,068 percent in the 12 months to the end of January, according to estimates by the country’s opposition-led National Assembly, broadly in line with independent economists’ figures.

Inflation in January alone was 84.2 percent, opposition lawmakers said, amid an economic crisis in which millions of Venezuelans are suffering food and medicine shortages.

The monthly figure implies annualized inflation of more than 150,000 per cent and that prices will double at least every 35 days.

With cash in short supply and banking and communications infrastructures struggling, day-to-day transactions are becoming increasingly difficult for Venezuelans.

The government blames the problems on an economic war waged by the opposition and business leaders, with a helping hand from Washington.

Critics in turn blame strict currency controls, which were enacted by Hugo Chavez 15 years ago this week. The bolivar is down some 40 percent against the dollar in the last month alone.

A million dollars of Venezuelan bolivars bought when the currency controls were introduced would now be worth just $7 on the black market.

The government has not published inflation data for more than two years though has increased the minimum wage repeatedly in a nod to rising prices.

The government raised the minimum wage 40 percent on Jan. 1, making it roughly equivalent now to just over $1 per month.

(Additional reporting by Leon Wietfeld; Editing by Susan Thomas)

Hackers release files indicating NSA monitored global bank transfers

FILE PHOTO: Swift code bank logo is displayed on an iPhone 6s among Euro banknotes in this picture illustration January 26, 2016. REUTERS/Dado Ruvic/File Photo - RTS11WHG

By Clare Baldwin

(Reuters) – Hackers released documents and files on Friday that cybersecurity experts said indicated the U.S. National Security Agency had accessed the SWIFT interbank messaging system, allowing it to monitor money flows among some Middle Eastern and Latin American banks.

The release included computer code that could be adapted by criminals to break into SWIFT servers and monitor messaging activity, said Shane Shook, a cyber security consultant who has helped banks investigate breaches of their SWIFT systems.

The documents and files were released by a group calling themselves The Shadow Brokers. Some of the records bear NSA seals, but Reuters could not confirm their authenticity.

The NSA could not immediately be reached for comment.

Also published were many programs for attacking various versions of the Windows operating system, at least some of which still work, researchers said.

In a statement to Reuters, Microsoft <MSFT.O>, maker of Windows, said it had not been warned by any part of the U.S. government that such files existed or had been stolen.

“Other than reporters, no individual or organization has contacted us in relation to the materials released by Shadow Brokers,” the company said.

The absence of warning is significant because the NSA knew for months about the Shadow Brokers breach, officials previously told Reuters. Under a White House process established by former President Barack Obama’s staff, companies were usually warned about dangerous flaws.

Shook said criminal hackers could use the information released on Friday to hack into banks and steal money in operations mimicking a heist last year of $81 million from the Bangladesh central bank.

“The release of these capabilities could enable fraud like we saw at Bangladesh Bank,” Shook said.

The SWIFT messaging system is used by banks to transfer trillions of dollars each day. Belgium-based SWIFT downplayed the risk of attacks employing the code released by hackers on Friday.

SWIFT said it regularly releases security updates and instructs client banks on how to handle known threats.

“We mandate that all customers apply the security updates within specified times,” SWIFT said in a statement.

SWIFT said it had no evidence that the main SWIFT network had ever been accessed without authorization.

It was possible that the local messaging systems of some SWIFT client banks had been breached, SWIFT said in a statement, which did not specifically mention the NSA.

When cyberthieves robbed the Bangladesh Bank last year, they compromised that bank’s local SWIFT network to order money transfers from its account at the New York Federal Reserve.

The documents released by the Shadow Brokers on Friday indicate that the NSA may have accessed the SWIFT network through service bureaus. SWIFT service bureaus are companies that provide an access point to the SWIFT system for the network’s smaller clients and may send or receive messages regarding money transfers on their behalf.

“If you hack the service bureau, it means that you also have access to all of their clients, all of the banks,” said Matt Suiche, founder of the United Arab Emirates-based cybersecurity firm Comae Technologies, who has studied the Shadow Broker releases and believes the group has access to NSA files.

The documents posted by the Shadow Brokers include Excel files listing computers on a service bureau network, user names, passwords and other data, Suiche said.

“That’s information you can only get if you compromise the system,” he said.

ATTEMPT TO MONITOR FLOW OF MONEY

Cris Thomas, a prominent security researcher with the cybersecurity firm Tenable, said the documents and files released by the Shadow Brokers show “the NSA has been able to compromise SWIFT banking systems, presumably as a way to monitor, if not disrupt, financial transactions to terrorists groups”.

Since the early 1990s, interrupting the flow of money from Saudi Arabia, the United Arab Emirates and elsewhere to al Qaeda, the Taliban, and other militant Islamic groups in Afghanistan, Pakistan and other countries has been a major objective of U.S. and allied intelligence agencies.

Mustafa Al-Bassam, a computer science researcher at University College London, said on Twitter that the Shadow Brokers documents show that the “NSA hacked a bunch of banks, oil and investment companies in Palestine, UAE, Kuwait, Qatar, Yemen, more.”

He added that NSA “completely hacked” EastNets, one of two SWIFT service bureaus named in the documents that were released by the Shadow Brokers.

Reuters could not independently confirm that EastNets had been hacked.

EastNets, based in Dubai, denied it had been hacked in a statement, calling the assertion “totally false and unfounded.”

EastNets ran a “complete check of its servers and found no hacker compromise or any vulnerabilities,” according to a statement from EastNets’ chief executive and founder, Hazem Mulhim.

In 2013, documents released by former NSA contractor Edward Snowden said the NSA had been able to monitor SWIFT messages.

The agency monitored the system to spot payments intended to finance crimes, according to the documents released by Snowden.

Reuters could not confirm whether the documents released Friday by the Shadow Brokers, if authentic, were related to NSA monitoring of SWIFT transfers since 2013.

Some of the documents released by the Shadow Brokers were dated 2013, but others were not dated.

The documents released by the hackers did not clearly indicate whether the NSA had actually used all the techniques cited for monitoring SWIFT messages.

(Additional reporting by Tom Bergin in London; Dustin Volz and John Walcott in Washington; Joseph Menn in San Franciso; and Jim Finkle in Buffalo, New York.; Editing by Brian Thevenot and Cynthia Osterman)

Cyber security is the biggest risk facing financial system

U.S. Securities and Exchange Commission Chair Mary Jo White is interviewed at the Reuters Financial Regulation Summit in Washington, US May 17, 2016.

By Lisa Lambert and Suzanne Barlyn

WASHINGTON (Reuters) – Cyber security is the biggest risk facing the financial system, the chair of the U.S. Securities and Exchange Commission (SEC) said on Tuesday, in one of the frankest assessments yet of the threat to Wall Street from digital attacks.

Banks around the world have been rattled by a $81 million cyber theft from the Bangladesh central bank that was funneled through SWIFT, a member-owned industry cooperative that handles the bulk of cross-border payment instructions between banks.

The SEC, which regulates securities markets, has found some major exchanges, dark pools and clearing houses did not have cyber policies in place that matched the sort of risks they faced, SEC Chair Mary Jo White told the Reuters Financial Regulation Summit in Washington D.C.

“What we found, as a general matter so far, is a lot of preparedness, a lot of awareness but also their policies and procedures are not tailored to their particular risks,” she said.

“As we go out there now, we are pointing that out.”

White said SEC examiners were very pro-active about doing sweeps of broker-dealers and investment advisers to assess their defenses against a cyber attack.

“We can’t do enough in this sector,” she said.

Cyber security experts said her remarks represented the SEC’s strongest warning to date of the threat posed by hackers.

A former member of the World Bank’s security team, Tom Kellermann, who is now chief executive of the investment firm Strategic Cyber Ventures LLC, called it “a historic recognition of the systemic risk facing Wall Street.”

BROKEN WINDOWS

Under White, a former federal prosecutor, the SEC introduced an initiative called “broken windows” designed to crack down on small violations of SEC rules to deter traders and others from larger transgressions.

But critics have questioned whether the initiative, similar to one used by former New York City Mayor Rudy Giuliani in his crackdown on crime in the city, is an effective use of the agency’s limited resources.

The policy has been applied to instances of “rampant non-compliance” involving serious, significant rules, White said, noting that she considers the initiative a huge success.

For example, the SEC brought three groups of cases in a key area, the prohibition against short selling ahead of an IPO by individuals who then participated in the IPO, since 2013, she said. Each year, there have been fewer cases, with the most recent number at around 12, White said.

GAAP VS. NON-GAAP

Also on Tuesday, the SEC released guidance about how certain accounting practices could potentially mislead investors that White called “consequential.”

Companies are increasingly using non-Generally Accepted Accounting Principles, or non-GAAP, to report earnings, permitting them to back out certain expenses from earnings figures, such as non-cash costs. But critics say the practice can also mislead investors by creating a rosier picture of a company’s profits.

The SEC’s current rules allow companies to report with figures that do not comply with GAAP, as long as certain conditions are met and White said the guidance spells out those conditions, such as a requirement that “the GAAP measure has to be of equal or greater prominence than non-GAAP.”

Non-GAAP “is not supposed to supplant GAAP and obviously not obscure GAAP,” she said.

She declined to say if the SEC is considering enforcement actions against companies that might be misleading investors with non-GAAP, but noted the SEC would not hesitate to bring one if it uncovered an “actionable violation.”

For months now, the SEC has only had three commissioners, down from its full complement of five, and the U.S. Congress has stalled on confirming two nominees.

“We’re really functioning on all cylinders,” White said, ticking off a list of projects the commission has recently completed.

She added that, to comply with rules on meetings and disclosures, commissioners typically meet one-on-one.

“If there are only three of you, it’s shorter-circuited to some degree,” she said. “There are some advantages, too.”

Follow Reuters Summits on Twitter @Reuters_Summits

For other news from the Reuters Financial Regulation Summit, click on http://www.reuters.com/summit/FinancialRegulation16

(Additional reporting by Sarah N. Lynch)

Global banking Fees Fall 29 Percent

A view of the exterior of the JP Morgan Chase & Co. Corporate headquarters in the Manhattan borough of New York City,

By Anjuli Davies

LONDON (Reuters) – Global investment banking fees fell 29 percent in the first quarter of 2016 from a year earlier as market volatility put a brake on dealmaking and equity and debt capital markets activity, Thomson Reuters data published on Monday showed.

Global fees for services ranging from merger and acquisitions advisory services to capital markets underwriting reached $16.2 billion by the end of March, the slowest first quarter for fees since 2009.

Regionally, fees in the Americas totaled $8.7 billion, down 32 percent from last year. Fees in Europe were down 27 percent at $3.9 billion and the Asia-Pacific region saw an 18 percent decline to $2.6 billion.

Investment banking income was dragged down across all products as global markets were hit by volatility sparked by global growth worries, geopolitical tensions in the Middle East and a China slowdown.

Company boards and their chief executives were deterred from pulling the trigger on big transformative deals, in contrast to the record levels of activity seen last year, although the quarter saw a flurry of Chinese companies seeking Western targets.

Equity capital markets fees saw the steepest decline of 48 percent compared to a year ago, followed by a 26 percent fall in debt capital markets fees and an 18 percent decline in M&amp;A revenue.

JPMorgan &lt;JPM.N&gt; topped the global league table for fees, drawing in $1.2 billion during the quarter, a decline of 23 percent compared to a year earlier but gaining slightly in overall wallet share.

The top five banks were all American, but European banks Barclays &lt;BARC.L&gt; and Credit Suisse &lt;CSGN.S&gt; each gained one place to rank sixth and seventh respectively.

&lt;&lt;&lt;For the full league table click on: http://trmcs-documents.s3.amazonaws.com/3501ec8eae589bfbef9cc1729a7312f0_20160404083831_1Q2016_Global_Investment_Banking_Review.pdf &gt;&gt;&gt;

(Editing by Susan Fenton)