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German town fears $46 million loss on Greensill Bank accounts

The mayor of Germany’s Monheim am Rhein is concerned that it may lose 38 million euros ($46 million) invested with Greensill Bank after a warning on Wednesday by the country’s financial regulator of “an imminent risk” to the lender.
The sleepy northwestern German town, which has a population of 40,000 and boasts a medieval tower, parked the sum — which equates to almost 1,000 euros per resident — at Bremen-based Greensill Bank, the mayor said in an emailed statement.

German watchdog BaFin warned of the risk that Greensill Bank would become over-indebted on Wednesday, imposing a moratorium on the lender making disposals or payments.

Google to Offer Cyber Insurance From Allianz, Munich Re to Cloud Users

Google is teaming up with two global insurers to cover cyber breaches and related risks for businesses that use its cloud services, the first time a major provider has opened up such insurance to its clients, the companies said on Tuesday.

Major insurers have been treading carefully on cyber risks for years, but the tie-up between Google, Allianz and Munich Re gives the insurers special access to data to see what controls are in place at client firms to help them price the risk.
“This is extremely key. This is data that we as insurance carriers traditionally have not had access to,” said Thomas Kang, head of North American cyber, tech and media at Allianz’s AGCS unit.

US Banks Seeking New Protections in Wake of Citigroup’s $900M Mistake

Bannks are seeking new legal protections to help avoid a repeat of Citigroup Inc.’s accidental $900 million payment to Revlon Inc. lenders.

After last month’s surprise court ruling that let certain Revlon creditors keep $500 million of the mistaken transfer, banks began inserting new language into loan deals that would require investors to return the money if such an error occurred again. The provisions, which were in the works before the decision, aim to strengthen the hand of administrative agents that oversee interest distributions and repayment schedules

At least four leveraged loan issuers came to market with deals that included “Revlon clawback language” in credit documents in recent weeks. Banks including Citigroup, Barclays Plc and Jefferies Financial Group Inc. have led offerings with the provisions, according to people with knowledge of the matter who asked not to be identified discussing private transactions.

The exact wording can vary, but they generally grant the agent bank the “sole” power to determine when a lender payment is a mistake and set procedures to recoup the funds, according to Xtract Research “Finders can’t be keepers,” Xtract covenant analyst Jenny Warshafsky said in an interview.

Representatives for Citigroup and Barclays declined to comment. A representative for Jefferies didn’t immediately return a request for comment.

Being a loan agent, which involves administrative tasks like collecting and distributing interest payments, managing amortization schedules, and providing other housekeeping services, isn’t high-fee work for a bank, but is seen as necessary to gain more lucrative underwriting and advising mandates.

After Citigroup inadvertently wired its own funds to Revlon lenders while serving as an agent and lost its fight to recover some of the money, it was forced to restate earnings after writing down the part of the loan it now owns. Reducing such risks for future deals makes sense, said Justin Forlenza, a senior covenant analyst at Covenant Review.

“It’s a logical response,” Forlenza said. “It shook them up that they could lose this much money on a mistake.”

For leveraged loan buyers who have spent years complaining about weakening investor safeguards in a fast-growing market, the clawback language is yet another sign of worsening protection for lenders. Even though loan-market activity slowed last year amid the Covid-19 pandemic, covenants remained weak, according to Moody’s Investors Service. The credit grader predicts protections will further deteriorate in 2021 as the market heats back up.

“If I was a lender, this is not one of the things I would push back on,” Warshafsky said. “There are so many other things to worry about that are more likely to come up,” but it “is adding insult to injury in such an aggressive market.”

reuters

Bank of America co-head of global oil trading departs

Charles Sussman, managing director and co-head of global oil trading at Bank of America Merrill Lynch (BAML), has left after nearly 10 years with the firm, two sources familiar with the matter said on Wednesday.

A spokeswoman for BAML declined to comment. Sussman did not respond to a request for comment.

Wall Street often sees staffing changes around this time of the year after bonuses are handed out.

Star stockpicker Cathie Wood remains bullish on bitcoin, warns on banks

ARK Invest founder and chief investment officer Cathie Wood reiterated her bullish position on Tesla and bitcoin on Wednesday while warning that the growth of digital wallets will “gut” traditional banks.

Wood, whose $24.4 billion ARK Innovation exchange-traded fund is the largest actively managed ETF tracked by Lipper, said in a webinar her fund remains “opportunistic” despite the recent slide in the S&P 500 as investors have raised concerns over valuation and the prospect of higher inflation.

Bitcoin rises 5% to $50,942.58

Bitcoin rose 5% to $50,942.58 on Wednesday, adding $2,426.23 to its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, has risen 83.7% from the year’s low of $27,734 on Jan. 4.

Amazon’s first cashierless store arrives in Britain in sign of global expansion

Amazon.com Inc will open its first-ever physical store outside the United States on Thursday.

The world’s largest online retailer said the cashierless store, dubbed “Amazon Fresh,” is located in Britain, in the London Borough of Ealing. It will carry a private UK food brand it’s calling “by Amazon” and will let consumers skip the checkout line when they shop.

Texas power grid names firms with unpaid bills, cuts off second

Texas’ power grid operator on Wednesday cited 12 energy companies and two municipal utilities for failure to pay their bills for power and services during February’s deadly blackout that has led to the ouster of the operator’s chief executive.

The companies and utilities owe $2.21 billion for power and services during the storm, the Electric Reliability Council of Texas (ERCOT), which runs the grid providing electricity to 90% of state residents, said.

FCMB launches paperless and card-less transactions

First City Monument Bank Nigeria plc said it has introduced paperless and card-less transactions at branches, ATMs and PoS terminals.

In a statement on Wednesday, it said its customers could now seamlessly carry out transactions with just their fingerprints and Bank Verification Numbers.

This followed the introduction of paperless transactions within the banks’ over 200 branches in Nigeria, it stated.