1 Obama says no way back from globalization (BBC) US
President Barack Obama has made a strong defence of globalisation as he arrived
in Germany on his final visit to Europe before leaving office. In a joint
article, Mr Obama and German Chancellor Angela Merkel said that with the global
economy developing faster than ever, co-operation was vital.
Mr Obama arrived in Germany from Athens where he had
warned of threats to modern democracy. He is seeking to calm unease following
the election of Donald Trump. The two leaders voiced support for the proposed
Trans-Atlantic Trade and Investment Partnership (TTIP) between the US and the
EU.
By contrast, Mr Trump is a fierce critic of global
free trade agreements and welcomed the UK's decision in June to leave the EU. In
Athens, Mr Obama acknowledged that globalisation had created a "sense of
injustice" and a "course correction" was needed to address
growing inequality.
2 RBS may be fined $12bn for mis-selling (Jill
Treanor in The Guardian) Royal Bank of Scotland could face a penalty of more
than $12bn to settle a decades-old mis-selling scandal in the US, the body
which controls the taxpayer stake in the bank has said.
The bailed-out bank has not set aside any money for
a settlement with the US Department of Justice (DoJ) over the mis-selling of
residential mortgage-backed securities (RMBS) before the 2008 banking crisis.
Uncertainty about the scale of the penalty is one of
the reasons cited by the chancellor, Philip Hammond, for abandoning any hope of
further reducing the taxpayer stake, which currently stands at 73%. However,
the chairman of UK Financial Investments laid out the possible financial impact
of the looming fine at a hearing of the Treasury select committee on Wednesday.
James Leigh-Pemberton pointed to negotiations under
way between the DoJ and Deutsche Bank, which have started at $14bn. He said the
RBS fine “might be $5bn, it might be $12bn”. He added: “Based on what happened
to Deutsche Bank it could be more.”
3 Behind India’s rupee shake-up (Sarosh Bana in
Straits Times) The decision by India’s Narendra Modi government to abruptly
demonetise high-value currency aims to combat the twin menaces of a crippling
shadow economy and terrorist financing that have been undermining the nation's
economy and security.
India's parallel economy is estimated to be worth $445.8
billion, amounting to a fifth of the country's $2.02 trillion gross domestic
product and surpassing the economies of countries such as Thailand and
Argentina.
Last week's radical step, however, sucked 22 billion
of the 500-rupee and 1,000-rupee denomination banknotes - worth over 14
trillion rupees - out of the economy, forcing those within the law to rush to
banks to trade in the notes for limited exchanges.
The 7.85 trillion rupees' worth of the scrapped
500-rupee notes and 6.33 trillion rupees' worth of the 1,000-rupee notes
constituted an overwhelming 86 per cent of the value of Indian currency in
circulation. Their combined volumes also accounted for just over 24 per cent of
the overall 90.3 billion banknotes of all denominations in circulation.
India's "black economy" - economic
activities outside formal banking channels - is generated significantly from
bribery that is rampant in government. Much is routed through gold, real
estate, the film industry, the informal sector and businesses that flourish on
cash transactions.
Mr Modi also specified that the demonetisation would
help clamp down on the use of hawala for terror funding. The demonetisation is
also intended to flush out fake Indian currency, much of which is reportedly
counterfeited and pushed into India by Pakistan to fund cross-border terrorism
and also to undermine the Indian economy.
The Prime Minister now warns of further measures
against black money, following demonetisation. In a public address, he asked
his audience: "You tell me, whether money that has been stolen should be
exposed or not?" There was a resounding "Yes".
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