A woman exercises with a dog near the City of London financial district, in London, Britain, April 30, 2021. REUTERS/John Sibley
Ambitious plan depends on tax cuts, open door hiring
TheCityUK says New York took top spot in 2018
Brexit, rise of Asian financial centres add pressure
LONDON, Sept 7 (Reuters) – Britain needs to ease taxes on banks and make it easier to hire staff from abroad, its financial and professional services lobby said in a blueprint to help London unseat New York as the world’s top international financial centre within five years.
The strategy paper on Tuesday from TheCityUK reiterated some ideas already aired in government-backed reports and elsewhere in recent months as the City of London looks to recoup ground lost following Britain’s departure from the EU. read more
“By some metrics, the UK is losing ground: London is currently slipping further behind New York each year while other centres are strengthening,” the paper said.
The U.S. financial capital overtook London in 2018 in a leading annual survey, it said, adding that New York dominated in stock market listings.
“The UK therefore needs to adopt a relentless focus on strengthening its international competitiveness to win back the prize of being the world’s leading international financial centre,” TheCityUK lobby group, which promotes the wider financial sector abroad, paper added in the paper.
Britain’s departure from the European Union effectively closed London off from its biggest financial services customer, adding further pressure to catch up.
The finance ministry has already set out reforms to make London’s capital market more competitive, and TheCityUK set a five-year target for London to “out-compete its rivals” by amending tax, visa and other rules.
Becoming the global hub for financial data, sustainability investing and investment and risk management will also be crucial in helping Britain overtake New York, TheCityUK said.
The total tax rate for a London bank is 46.5%, 13% higher than a New York based bank, it added.
But persuading government to cut taxes on finance as it mends a hole in the economy from COVID may be challenging, as will having an open door on hiring given the Brexit referendum pledged to crack down on high levels of international mobility.
The single most important issue for financial firms is being able to hire globally, TheCityUK CEO Miles Celic said.
“In conversations we have had with government, I think that is something that is absolutely understood,” he told reporters.
Reporting by Huw Jones; Editing by Alexander Smith
Our Standards: The Thomson Reuters Trust Principles.
Britain, France, United States and EU scrutinising sector
Bank cloud tech spending to surge to $85bn by 2025 – IDC
Bank regulators want more oversight of cloud risks
LONDON, Aug 20 (Reuters) – More than a decade on from the financial crisis, regulators are spooked once again that some companies at the heart of the financial system are too big to fail. But they’re not banks.
This time it’s the tech giants including Google (GOOGL.O), Amazon (AMZN.O) and Microsoft (MSFT.O) that host a growing mass of bank, insurance and market operations on their vast cloud internet platforms that are keeping watchdogs awake at night.
Central bank sources told Reuters the speed and scale at which financial institutions are moving critical operations such as payment systems and online banking to the cloud constituted a step change in potential risks.
“We are only at the beginning of the paradigm shift, therefore we need to make sure we have a fit-for-purpose solution,” said a financial regulator from a Group of Seven country, who declined to be named.
It is the latest sign of how financial regulators are joining their data and competition counterparts in scrutinising the global clout of Big Tech more closely.
Banks and technology companies say greater use of cloud computing is a win-win as it results in faster and cheaper services that are more resilient to hackers and outages.
But regulatory sources say they fear a glitch at one cloud company could bring down key services across multiple banks and countries, leaving customers unable to make payments or access services, and undermine confidence in the financial system.
The U.S. Treasury, European Union, Bank of England and Bank of France are among those stepping up their scrutiny of cloud technology to mitigate the risks of banks relying on a small group of tech firms and companies being “locked in”, or excessively dependent, on one cloud provider.
“We’re very alert to the fact that things will fail,” said Simon McNamara, chief administrative officer at British bank NatWest (NWG.L). “If 10 organisations aren’t prepared and are connected into one provider that disappears, then we’ll all have a problem.”
RAPID PACE
The EU proposed in September that “critical” external services for the financial industry such as the cloud should be regulated to strengthen existing recommendations on outsourcing from the bloc’s banking authority that date back to 2017.
The Bank of England’s Financial Policy Committee (FPC) meanwhile wants greater insight into agreements between banks and cloud operators and the Bank of France told lenders last month they must have a written contract that clearly defines controls over outsourced activities.
“The FPC is of the view that additional policy measures to mitigate financial stability risks in this area are needed,” it said in July. read more
The European Central Bank, which regulates the biggest lenders in the euro zone, said on Wednesday that bank spending on cloud computing rose by more than 50% in 2019 from 2018.
And that’s just the start. Spending on cloud services by banks globally is forecast to more than double to $85 billion in 2025 from $32.1 billion in 2020, according to data from technology research firm IDC shared with Reuters.
An IDC survey of 50 major banks globally identified just six primary providers of cloud services: IBM (IBM.N), Microsoft, Google, Amazon, Alibaba (9988.HK) and Oracle (ORCL.N).
Amazon Web Services (AWS) – the largest cloud provider according to Synergy Group – posted sales of $28.3 billion in the six months to June, up 35% on the prior year and higher than its annual revenue of $25.7 billion as recently as 2018.
While all industries have ramped up cloud spending, analysts told Reuters that financial services firms had moved faster since the pandemic after an explosion in demand for online banking and emergency lending schemes.
“Banks are still very diligent but they have gained a higher level of comfort with the model and are moving at a fairly rapid pace,” said Jason Malo, director analyst at consultants Gartner.
Reuters Graphics Reuters Graphics
NO MORE SECRECY
Regulators worry that cloud failures would cause banking systems to fall over and stop people accessing their money, but say they have little visibility over cloud providers.
Last month, the Bank of England said big tech companies could dictate terms and conditions to financial firms and were not always providing enough information for their clients to monitor risks – and that “secrecy” had to end.
There is also concern that banks may not be spreading their risk enough among cloud providers.
Google told Reuters that less than a fifth of financial firms were using multiple clouds in case one failed, according to a recent survey, although 88% of those that did not spread their risk yet planned to do so within a year. read more
Central bank sources said part of the solution may be some form of mechanism that offers reassurance on resilience from cloud providers to banks to mitigate the sector’s aggregate exposure to one cloud service – with the banking regulator having the overall vantage point.
“Regardless of the division of control responsibilities between the cloud service provider and the bank, the bank is ultimately responsible for the effectiveness of the control environment,” the U.S. Federal Reserve said in draft guidance issued to lenders last month.
FINRA, which regulates Wall Street brokers, published a report on Monday ahead of potential rule changes to ensure that using the cloud does not harm the market or investors.
Being able to switch cloud providers easily when needed is, however, a task that is more easily said than done and could introduce disruptions to business, the FINRA report said.
‘THE BUCK STOPS WITH US’
Banks and tech firms contest the suggestion that greater adoption of the cloud is making the financial system’s infrastructure inherently riskier.
Adrian Poole, director for financial services in the United Kingdom and Ireland for Google Cloud, said the cloud can be more effective in bolstering a bank’s security capabilities than by building it in-house.
British digital lender Zopa said it had moved 80% of its transactions to the cloud and was working to mitigate risks. Zopa Chief Executive Jaidev Janardana said the company was also deliberately leaning on tech firms’ expertise.
“Cloud providers invest a lot of resources in security at a scale that few individual companies could manage,” he said.
Google’s Poole said the company was open to working more closely with financial regulators.
“We may one day see regulators pulling data on demand from regulated banks with cloud-enabled application programming interfaces (APIs), instead of waiting for banks to periodically push data at them,” he said.
NatWest’s McNamara said the bank was collaborating closely with tech firms and regulators to mitigate risks, and had put alternative services in place in case things went wrong.
“The buck stops with us,” McNamara said. “We don’t put all our eggs in one basket.”
One problem, though, is that not all banks have a full understanding of the risks to resiliency that could come with a wholesale shift to the cloud, said Jost Hoppermann, principal analyst at Forrester, particularly the smaller lenders.
“Some banks do not have the necessary know-how,” he said. “They think doing this will vanish all their problems, and certainly that isn’t true.”
Reporting by Iain Withers and Huw Jones; Additional reporting by Michelle Price in Washington and Francesco Canepa in Frankfurt; Editing by Rachel Armstrong and David Clarke
Our Standards: The Thomson Reuters Trust Principles.
Central bank decided to end fuel subsidy on Wednesday
Central bank chief hits back at criticism of decision
The decision angered the government
BEIRUT, Aug 14 (Reuters) – Lebanon’s central bank governor said nobody was running the country, hitting back after government criticism of his decision to halt fuel subsidies that have drained currency reserves.
In an interview broadcast on Saturday, Riad Salameh said the government could resolve the problem quickly by passing necessary legislation.
He denied he had acted alone in declaring an end to the subsidies on Wednesday, and said it was widely known that the decision was coming. read more
“So far you have nobody running the country,” Salameh told Radio Free Lebanon.
The worsening fuel crisis is part of Lebanon’s wider financial meltdown. Hospitals, bakeries and many businesses are scaling back operations or shutting down as fuel runs dry. read more
Deadly violence has flared in fuel lines, protesters have blocked roads, and fuel tankers have been hijacked this week.
The American University of Beirut Medical Center said it was threatened with a forced shutdown as early as Monday because of shortages of fuel used to generate electricity.
“This means that ventilators and other lifesaving medical devices will cease to operate. Forty adult patients and fifteen children living on respirators will die immediately,” the hospital said.
The central bank’s move to end subsidies will mean sharp price increases. It is the latest turn in a crisis that has sunk the Lebanese pound by 90% in less than two years and pushed more than half the population into poverty.
The central bank has effectively been subsidising fuel and other vital imports by providing dollars at exchange rates below the real price of the pound – most recently at 3,900 pounds to the dollar compared to parallel market rates above 20,000. – This has eaten into a reserve which Salameh said now stood at $14 billion.
To continue providing such support, the central bank has said it needs legislation to allow use of the mandatory reserve, a portion of deposits that must be preserved by law.
“We are saying to everyone: You want to spend the mandatory reserve, we are ready, give us the law. It will take five minutes,” Salameh said.
“HUMILIATION OF THE LEBANESE”
The government has said fuel prices must not change. Fuel importers say they cannot import at market rates and sell at subsidised rates, and want clarity.
The central bank and oil authority told importers to sell their stocks at the subsidised rate of 3,900 pounds to the dollar, prioritising hospitals and other essential functions.
Lebanon’s army said on Saturday it had begun raiding closed petrol stations and distributing stored gasoline to citizens.
Critics of the subsidy scheme say it has encouraged smuggling and hoarding by selling commodities at a fraction of their real price.
Salameh said the bank had been obliged to finance traders who were not bringing their product to the market, and that over $800 million spent on fuel imports in the last month should have lasted three months.
Salameh said there was no diesel, gasoline or electricity, adding: “This is humiliation of the Lebanese.”
Lebanese politicians have failed to agree on a new government since Prime Minister Hassan Diab quit last August after a deadly explosion at Beirut port. He has stayed on as caretaker prime minister.
President Michel Aoun expressed optimism a new government would be formed soon.
Salameh said Lebanon could exit its crisis if a reform-minded government took office, adding the pound was “hostage to the formation of a new government and reforms”.
The government has said ending subsidies must wait until prepaid cash cards for the poor are rolled out. Parliament approved these in June, with financing from the mandatory reserve, Salameh said, but they have yet to materialise.
Reporting by Nafisa Eltahir/Laila Bassam; Writing by Tom Perry; Editing by Kirsten Donovan and Timothy Heritage
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Aug 9 (Reuters) – Two Federal Reserve officials said on Monday that the U.S. economy is growing rapidly and that while the labor market still has room for improvement, inflation is already at a level that could satisfy one leg of a key test for the beginning of interest rate hikes.
Atlanta Federal Reserve Bank President Raphael Bostic said he is eyeing the fourth quarter for the start of a bond-purchase taper but is open to an even earlier start if the job market keeps up its recent torrid pace of improvement. Moreover, he and Richmond Fed President Tom Barkin both said they believe inflation has already achieved the Fed’s 2% threshold, according to their separate assessments. That is one of two requirements to be met before rate hikes can be considered.
Their remarks are a sign that as Fed officials hold discussions about how and when to taper their asset purchases, they are also getting more detailed in their debate about what it will take to satisfy the Fed’s inflation target under the new framework.
Bostic, who has already penciled in late 2022 for the start of rate hikes, pointed to the five-year annual average for the core personal consumption expenditures index, or core PCE inflation, which by his calculation reached 2% in May.
“There are many reasons to think that we may be at that goal target right now,” Bostic told reporters. But he said the committee has yet to agree on the metrics it will use to measure that progress, something policymakers will need to discuss.
Barkin said high inflation seen this year may have satisfied one of the Fed’s benchmarks for raising rates, though there is still room for the job market to heal before rates should rise. Under the Fed’s current policy guidance, rates will rise “when inflation hits 2%, which I think you can argue it already has, and it looks like it is going to sustain there,” Barkin said at the Roanoke Regional Chamber of Commerce in Virginia.
Their remarks echoed comments made by St. Louis Fed President James Bullard last month, who said that the current pace of inflation, at 3.5% annually by the Fed’s preferred measure, is well above the central bank’s 2% target, and adequate in his view to make up for past weak inflation as required by the central bank’s new framework.
LABOR MARKET STILL BEHIND
Under a new framework unveiled last year, Fed officials agreed to leave rates at near-zero levels until the labor market reaches maximum employment, and inflation averages 2%, on track to moderately exceed 2% for some time.
Policymakers said in December they would continue purchasing government bonds at the current pace of $120 billion a month until there is “substantial further progress” toward the central bank’s goals for inflation and maximum employment.
With the elevated inflation levels reached during the pandemic, Bostic said, the Fed has effectively achieved the “substantial further progress” goal for inflation.
More progress is still needed in the labor market, but that goal could be accomplished after another month or two of strong job improvement, Bostic said. That puts the Fed on a path to begin trimming purchases between October and December, or sooner, if the gains in August are stronger than expected, he said.
Boston Fed President Eric Rosengren said on Monday during an interview with the Associated Press that the “substantial further progress” goal had been met for inflation but that more improvement was needed in the labor market. He said the tapering standard for employment could potentially be met by September.
“I would expect if we continue to have (jobs) reports like we’ve had over the last two, with very substantial payroll employment gains, that by the September meeting, we would, in my view, meet the substantial further progress criteria, and that would imply starting to taper sometime this fall,” Rosengren said.
Barkin did not specify a timeline for when the Fed may start to reduce its asset purchases, but said he is watching the employment-to-population ratio to evaluate whether the labor market has made enough progress toward the Fed’s goals.
In terms of how to structure the taper, Bostic said he supports a “balanced” approach that reduces mortgage-backed securities and Treasury securities at the same rate. He also said he would be in favor of tapering asset purchases over a shorter period than what the Fed has previously done. “I am in favor of going relatively fast,” Bostic said.
Reporting by Jonnelle Marte and Howard Schneider; Editing by Steve Orlofsky, Chizu Nomiyama and Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.
Prudential, Citi, HSBC, BlackRock devising coal plan
Initiative aims to secure funding at COP26 summit
ADB preparing feasibility study on early closures
LONDON/MELBOURNE, Aug 3 (Reuters) – Financial firms including British insurer Prudential, lenders Citi and HSBC and BlackRock Real Assets are devising plans to speed the closure of Asia’s coal-fired power plants in order to lower the biggest source of carbon emissions, five people with knowledge of the initiative said.
The novel proposal, which includes the Asian Development Bank (ADB), offers a potentially workable model and early talks with Asian governments and multilateral banks are promising, the sources told Reuters.
The group plans to create public-private partnerships to buy out the plants and wind them down within 15 years, far sooner than their usual life, giving workers time to retire or find new jobs and allowing countries to shift to renewable energy sources.
It aims to have a model ready for the COP26 climate conference which is being held in Glasgow, Scotland in November.
The initiative comes as commercial and development banks, under pressure from large investors, pull back from financing new power plants in order to meet climate targets.
An ADB executive told Reuters that a first purchase under the proposed scheme, which will comprise a mix of equity, debt and concessional finance, could come as soon as next year.
“If you can come up with an orderly way to replace those plants sooner and retire them sooner, but not overnight, that opens up a more predictable, massively bigger space for renewables,” Donald Kanak, chairman of Prudential’s (PRU.L) Insurance Growth Markets, told Reuters.
Coal-fired power accounts for about a fifth of the world’s greenhouse gas emissions, making it the biggest polluter.
The proposed mechanism entails raising low cost, blended finance which would be used for a carbon reduction facility, while a separate facility would fund renewable incentives.
HSBC (HSBA.L) declined to comment on the plan.
Finding a way for developing nations in Asia, which has the world’s newest fleet of coal plants and more under construction, to make the most of the billions already spent and switch to renewables has proved a major challenge.
The International Energy Agency expects global coal demand to rise 4.5% in 2021, with Asia making up 80% of that growth.
Meanwhile, the International Panel on Climate Change (IPCC) is calling for a drop in coal-fired electricity from 38% to 9% of global generation by 2030 and to 0.6% by 2050.
MAKING IT VIABLE
The proposed carbon reduction facility would buy and operate coal-fired power plants, at a lower cost of capital than is available to commercial plants, allowing them to run at a wider margin but for less time in order to generate similar returns.
The cash flow would repay debt and investors.
Reuters Image
The other facility would be used to jump start investments in renewables and storage to take over the energy load from the plants as it grows, attracting finance on its own.
The model is already familiar to infrastructure investors who rely on blended finance in so-called public-private deals, backed by government-financed institutions.
In this case, development banks would take the biggest risk by agreeing to take first loss as holders of junior debt as well as accepting a lower return, according to the proposal.
“To make this viable on more than one or two plants, you’ve got to get private investors,” Michael Paulus, head of Citi’s Asia-Pacific public sector group, who is involved in the initiative, told Reuters.
“There are some who are interested but they are not going to do it for free. They may not need a normal return of 10-12%, they may do it for less. But they are not going to accept 1 or 2%. We are trying to figure out some way to make this work.”
The framework has already been presented to ASEAN finance ministers, the European Commission and European development officials, Kanak, who co-chairs the ASEAN Hub of the Sustainable Development Investment Partnership, said.
Details still to be finalised include ways to encourage coal plant owners to sell, what to do with the plants once they are retired, any rehabilitation requirements, and what role if any carbon credits may play.
The firms aim to attract finance and other commitments at COP26, when governments will be asked to commit to more ambitious emissions targets and increase financing for countries most vulnerable to climate change.
U.S. President Joe Biden’s administration has re-entered the Paris climate accord and is pushing for ambitious reductions of carbon emissions, while in July, U.S. Treasury Secretary Janet Yellen told the heads of major development banks, including ADB and the World Bank, to devise plans to mobilize more capital to fight climate change and support emission cuts. read more
A Treasury official told Reuters that the plans for coal plant retirement are among the types of projects that Yellen wants banks to pursue, adding the administration is “interested in accelerating coal transitions” to tackle the climate crisis.
ASIA STEPS
As part of the group’s proposal, the ADB has allocated around $1.7 million for feasibility studies covering Indonesia, Philippines and Vietnam, to estimate the costs of early closure, which assets could be acquired, and engage with governments and other stakeholders.
“We would like to do the first (coal plant) acquisition in 2022,” ADB Vice President Ahmed M. Saeed told Reuters, adding the mechanism could be scaled up and used as a template for other regions, if successful. It is already in discussions about extending this work to other countries in Asia, he added.
To retire 50% of a country’s capacity early at $1 million-$1.8 million per megawatt suggests Indonesia would require a total facility of roughly $16-$29 billion, while Philippines would be about $5-$9 billion and Vietnam around $9-$17 billion, according to estimates by Prudential’s Kanak.
One challenge that needs to be tackled is the potential risk of moral hazard, said Nick Robins, a London School of Economics sustainable finance professor.
“There’s a longstanding principle that the polluter should pay. We need to make absolutely sure that we are not paying the polluter, but rather paying for accelerated transition,” he said.
Additional reporting by David Lawder in Washington; Editing by Amran Abocar and Alexander Smith
Our Standards: The Thomson Reuters Trust Principles.
Federal Reserve Board Governor Lael Brainard speaks at the John F. Kennedy School of Government at Harvard University in Cambridge, Massachusetts, U.S., March 1, 2017. REUTERS/Brian Snyder
July 30 (Reuters) – Federal Reserve Governor Lael Brainard on Friday laid out a range of reasons for “urgency” around the issue of developing a U.S. central bank digital currency, including the fact that other countries such as China are moving ahead with their own.
“The dollar is very dominant in international payments, and if you have the other major jurisdictions in the world with a digital currency, a CBDC (central bank digital currency)offering, and the U.S. doesn’t have one, I just, I can’t wrap my head around that,” Brainard told the Aspen Institute Economic Strategy Group. “That just doesn’t sound like a sustainable future to me.”
Fed officials are taking a deep dive into the digital payments universe, collecting public feedback on the potential costs and benefits as well as design considerations with a view to publishing a discussion paper in early September.
Fed Chair Jerome Powell in comments earlier this month described the analysis as a key step in accelerating the Fed’s efforts to determine if it should issue its own CDBC.
“One of the most compelling use cases is in the international realm, where intermediation chains are opaque and long and costly,” Brainard said on Friday.
But there are domestic reasons too for a U.S.-backed digital currency, she said: the dramatic rise in stablecoins, a form of cryptocurrency pegged to a conventional currency such as the U.S. dollar but not backed by any government.
Stablecoins could proliferate and fragment the payment system, or one or two could emerge as dominant, she said. Either way, “in a world of stablecoins you could imagine that households and businesses, if the migration away from currency is really very intense, they would simply lose access to a safe government backed settlement asset, which is of course what currency has always provided.”
A CBDC could also help solve other problems, she suggested, including the difficulty during the pandemic of getting government payments to people without bank accounts, who also tend to be the very people who need the payments the most.
Reporting by Ann Saphir;
Editing by Sandra Maler
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VANCOUVER, July 9 (Reuters) – A Canadian judge has denied Huawei Chief Financial Officer Meng Wanzhou’s application to add a trove of documents her legal team received from HSBC as evidence to her U.S. extradition case, the judge announced on Friday.
Meng, 49, is facing extradition from Canada to the United States on charges of bank fraud for allegedly misleading HSBC about Huawei’s business dealings in Iran, potentially causing the bank to break U.S. sanctions. She has been held under house arrest in Vancouver since December 2018, when she was first detained.
Her legal team received over 300 pages of internal documents from HSBC through a court on Hong Kong, which the defence argued should be entered as evidence because they would disprove the basis for the United States’ extradition claim. read more
Associate Chief Justice Heather Holmes, who has been overseeing the case in the British Columbia Supreme Court since its inception, disagreed. Her reasons will be released in writing in approximately ten days, Holmes said.
“We respect the court’s ruling, but regret this outcome,” Huawei Canada said in a statement released after the ruling, insisting that the documents showed HSBC was aware of Huawei’s business dealings in Iran, proving that the United States’ account of the case was “manifestly unreliable.”
The Canadian government did not immediately respond to a request for comment.
Meng is set to appear in court in early August. Her extradition hearings are scheduled to finish by the end of that month.
Reporting by Moira Warburton in Vancouver; editing by Diane Craft
Our Standards: The Thomson Reuters Trust Principles.
NEW DELHI, July 3 (Reuters) – Amazon.com Inc (AMZN.O) and India’s Tata Group warned government officials on Saturday that plans for tougher rules for online retailers would have a major impact on their business models, four sources familiar with the discussions told Reuters.
At a meeting organised by the consumer affairs ministry and the government’s investment promotion arm, Invest India, many executives expressed concerns and confusion over the proposed rules and asked that the July 6 deadline for submitting comments be extended, said the sources.
The government’s tough new e-commerce rules announced on June 21 aimed at strengthening protection for consumers, caused concern among the country’s online retailers, notably market leaders Amazon and Walmart Inc’s (WMT.N) Flipkart.
New rules limiting flash sales, barring misleading advertisements and mandating a complaints system, among other proposals, could force the likes of Amazon and Flipkart to review their business structures, and may increase costs for domestic rivals including Reliance Industries’ (RELI.NS) JioMart, BigBasket and Snapdeal. read more
Amazon argued that COVID-19 had already hit small businesses and the proposed rules will have a huge impact on its sellers, arguing that some clauses were already covered by existing law, two of the sources said.
The sources asked not to be named as the discussions were private.
The proposed policy states e-commerce firms must ensure none of their related enterprises are listed as sellers on their websites. That could impact Amazon in particular as it holds an indirect stake in at least two of its sellers, Cloudtail and Appario.
On that proposed clause, a representative of Tata Sons, the holding company of India’s $100 billion Tata Group, argued that it was problematic, citing an example to say it would stop Starbucks (SBUX.O) – which has a joint-venture with Tata in India – from offering its products on Tata’s marketplace website.
The Tata executive said the rules will have wide ramifications for the conglomerate, and could restrict sales of its private brands, according to two of the sources.
Tata declined to comment.
The sources said that a consumer ministry official argued that the rules were meant to protect consumers and were not as strict as those of other countries. The ministry did not respond to a request for comment.
A Reliance executive agreed that the proposed rules would boost consumer confidence, but added that some clauses needed clarification.
Reliance did not respond to request for comment.
The rules were announced last month amid growing complaints from India’s brick-and-mortar retailers that Amazon and Flipkart bypass foreign investment law using complex business strcutures. The companies deny any wrongdoing.
A Reuters investigation in February cited Amazon documents that showed it gave preferential treatment to a small number of its sellers and bypassed foreign investment rules. Amazon has said it does not give favourable treatment to any seller.
The government will soon issue certain clarifications on the foreign investment rules, Indian commerce minister Piyush Goyal told reporters on Friday.
Reporting by Aditya Kalra in New Delhi;
Editing by Euan Rocha and Louise Heavens
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Pope approved move against cardinal, who says he is innocent
Former head of Vatican Financial Intelligence denies charges
Becciu most senior Vatican official charged with financial crime
Trial to start July 27
VATICAN CITY, July 3 (Reuters) – A prominent Italian cardinal was among 10 people sent to trial in the Vatican on Saturday charged with financial crimes including embezzlement, money laundering, fraud, extortion and abuse of office.
Cardinal Angelo Becciu, formerly a senior official in the Vatican administration, as well as two top officials at the Vatican’s Financial Intelligence Unit will go on trial on July 27 over a multi-million euro scandal involving the Vatican’s purchase of a building in one of London’s smartest districts.
The trial will inevitably bring a swirl of media interest to the tiny city-state surrounded by Rome, and appears to underscore Pope Francis’ determination to cure the rot in Vatican finances, even if it involves messy public hearings.
Becciu, 73, whom the pope fired from his senior clerical post last year for alleged nepotism, and who has always maintained his innocence during a two-year investigation, becomes the most senior Vatican official to be charged with financial crimes.
The pope personally gave the required approval last week for Becciu to be indicted, according to a 487-page indictment request seen by Reuters. The Vatican announced the indictments in a two-page statement.
The charges against Becciu include embezzlement and abuse of office. An Italian woman who worked for him was charged with embezzlement and the cardinal’s former secretary, a priest, was accused of extortion.
Becciu said in a statement that he was a victim of a “machination” and reaffirmed his “absolute innocence”.
Two Italian brokers, Gianluigi Torzi and Raffaele Mincione, were charged with embezzlement, fraud and money laundering. Torzi, for whom Italian magistrates issued an arrest warrant in April, was also charged with extortion.
There was no immediate response to attempts to reach their lawyers, but both men have consistently denied wrongdoing.
Four companies associated with individual defendants, two in Switzerland, one in the United States and one in Slovenia, were also indicted, according to the document.
POLICE RAID
The investigation into the purchase of the building became public on Oct. 1, 2019, when Vatican police raided the offices of the Secretariat of State, the administrative heart of the Catholic Church, and those of the Vatican’s Financial Information Authority (AIF).
The then-president of the AIF, Rene Bruelhart, a 48-year-old Swiss, and AIF’s former Italian director, Tommaso Di Ruzza, 46, were charged with abuse of office for allegedly failing to adequately protect the Vatican’s interests and giving Torzi what the indictment request called an “undue advantage”.
Di Ruzza was also accused of embezzlement related to alleged inappropriate use of his official credit card, and of divulging confidential information.
Bruelhart said in a text message that he had “always carried out my functions and duties with correctness” and that “the truth about my innocence will emerge.”
Di Ruzza did not immediately respond to a voicemail requesting comment.
In 2014, the Secretariat of State invested more than 200 million euros, much of it from contributions from the faithful, in a fund run by Mincione, securing about 45% of a commercial and residential building at 60 Sloane Avenue in London’s South Kensington district.
The indictment request said Mincione had tried to deceive the Vatican, which in 2018 tried to end the relationship.
It turned to Torzi for help in buying up the rest of the building, but later accused him of extortion.
‘ENORMOUS LOSSES’
At the time, Becciu was in the last year of his post as deputy secretary of state for general affairs, a powerful administrative position that handles hundreds of millions of euros.
All told, the Secretariat of State sank more than 350 million euros into the investment, according to Vatican media, and suffered what Cardinal George Pell, the former Vatican treasurer, told Reuters last year were “enormous losses”.
Torzi was arrested in the Vatican in June 2020, and spent a week in custody.
According to the indictment request, Becciu is charged with five counts of embezzlement, two of abuse of office, and one count of inducing a witness to perjury. About 75 pages of the document are dedicated to Becciu.
It says Becciu tried to “heavily deflect” the inquiry into Vatican investments, including the London building, and tried to discredit the investigating magistrates via the Italian media.
Becciu continued to have influence over money transfers at the Secretariat even after he left the post, the document said.
The main charges against Becciu involve the alleged funnelling of money and contracts to companies or charitable organisations controlled by his brothers on their native island of Sardinia.
Another Sardinian, Cecilia Maronga, 40, who worked for Becciu, was charged with embezzlement. Her cellphone was not connected.
The indictment request said she had received about 575,000 euros from the Secretariat of State in 2018-2019.
She has said on Italian television that the money, sent to her company in Slovenia, was to ransom kidnapped missionaries in Africa. But the indictment request said much of it was used for “personal benefit”, including the purchase of luxury goods.
Reporting by Philip Pullella; Editing by Kevin Liffey
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