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 " Process of de-dollarization has begun’ “It’s clear that it (de-dollarization) will not happen at once, but the process has begun,” Mozhin said, anticipating a steady decline in the dominance of dollar. Mozhin also highlighted some US officials sounding the alarm on the risk of the dollar losing its status of the world’s reserve currency. He further associated the US currency’s long-standing dominance in the global economy with a lack of competition since most international settlements and deposits worldwide are in dollars. Recently, US Treasury Secretary Janet Yellen acknowledged that the use of financial sanctions could erode the dominance of the dollar." Source https://www.firstpost.com/world/us-responsible-for-de-dollarization-says-imf-12801912.html

 " We told our friends and allies in Israel that if there’s a fire burning in their backyard, it’s going to be a lot tougher , if not impossible, to actually both deepen the existing agreements, as well as to expand them, to include potentially Saudi Arabia ,” Blinken said at an event at the Council on Foreign Relations." " Israel has already secured diplomatic agreements with several Arab nations, including Morocco, Bahrain and the United Arab Emirates. After his recent trip to Saudi Arabia, Blinken reaffirmed the Biden administration’s commitment to normalization between Israel and Saudi Arabia , saying he discussed the matter in his meetings with Saudi officials" Source https://edition.cnn.com/2023/06/28/politics/blinken-israel-saudi-normalization/index.html

  " The bank merger and its implications Although it is too early to judge the full impact of this deal; we can, however, state the following: Credit Suisse is a TBTF bank, the second-largest Swiss bank and employs 50,000 workers around the globe and 17,000 in Switzerland. UBS’s acquisition comes with the aim of shrinking Credit Suisse’s core business (investment banking), or in the words of UBS Chairman Colm Kelleher: “(…)  UBS intends to downsize Credit Suisse’s investment banking business and align it with our conservative risk culture ”. UBS will be able to reinforce its position in investment banking. The takeover will allow UBS to target the Asian and American market while becoming “the  world’s leading wealth manager with $5 trillion of invested  assets”, according to CNN." " Bailouts, mergers, what next? The Credit Suisse collapse occurred because the alarm bells failed to ring properly. There is the feeling that FINMA’s detection of the problem was too littl...

  Written by  Dr Giuliano Bianchi  | Jun 13, 2023 4:00:00 PM  What is actually being debated? Dr. Bianchi:  There are several issues currently being mulled over. In the blue corner, there is the question related to the protection of shareholders (both CS and UBS). And in the red corner, there is the question related to the market power that this monster will have.  That’s just it: The combined balance sheet will be bigger than that of the Swiss National Bank. Does this present a systemic risk? What happens when ‘too big to fail’ becomes ‘too big to rescue’ for a national bank? Dr. Bianchi:  The power of the  Swiss National Bank  depends more on the level of confidence that it inspires than its actual financial firepower. If the markets do not believe in the SNB's strength and start speculating against it, the SNB would not be able to carry out its monetary policy. In the past, the SNB was able to rescue UBS and maintain a fixed exchange rate....

THE CLOCK IS TICKING. "Avoiding a hard landing would be historically unpredictable." "We expect the grind higher to be choppy,” Deutsche cautioned.  " The German multinational bank's top research team believes Washington has sparked a boom-bust cycle that now is nearing its end stage. In its house view, the recession slated to arrive as soon as October is the inevitable consequence of a series of aggressive rate hikes designed to extinguish the very flames of inflation that policymakers ignited through their own actions during the COVID pandemic." " Avoiding a hard landing would be historically unprecedented,” warned group chief economist David Folkerts-Landau in a research report entitled  The Clock is Ticking  published on Wednesday." SOURCE: https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/deutsche-bank-top-minds-put-105714771.html

 " New York  CNN Business  —  During a closed-door meeting with business leaders on Thursday, Treasury Secretary Janet Yellen stressed that the United States wants to work with China on urgent global challenges, a person familiar with the matter told CNN. The comments by Yellen signal increased efforts by US officials to lower the temperature in the complicated and intertwined relationship between the United States and China, the first- and second-biggest economies in the world, respectively." SOURCE: https://edition.cnn.com/2023/06/08/business/yellen-china-ceos-cnn-exclusive/index.html

 " The Federal Reserve has done enough economic damage already with its interest-rate hikes and, regardless of its next move, the US is facing an imminent 'self-inflicted' recession, according to yield-curve guru Campbell Harvey." " Continuing to raise rates placed the Fed in danger of overshooting - increasing rates well beyond when it should have stopped - and jeopardizing the chance to achieve a soft landing," Harvey wrote. He criticized the central bank's decision to raise its benchmark rate for the 10th consecutive time last month despite inflation cooling." SOURCE: https://markets.businessinsider.com/news/stocks/hard-landing-us-economy-research-affiliates-campbell-harvey-yeild-curve-2023-6

By Jon Danielsson  Charles Goodhart   "The downfall of Silicon Valley Bank and Credit Suisse has exposed failures in how we regulate the financial system. This column argues that the problems we now see in the system have arisen because the financial authorities have been trying to do the impossible: maintain growth while keeping inflation under control and financial stability high. The best way forward would be to focus on shock absorption and moral hazard, not the current approach of buffers and risk measurements." "Those post-2000 G20 financial reforms are founded on the philosophy of modern regulations. The notion is that all important risk is identified and measured, to be used by banks and the financial authorities to determine the appropriate level of risk. Then it is easy for the banks and regulators to fine-tune risk. If we need more growth, reduce capital requirements, as we did in March 2020, or demand more capital if risk is too high, as we should have done b...

 " Andrei Kostin , the CEO of state-controlled VTB , Russia's second largest bank , said the crisis was ushering in sweeping changes to the world economy, undermining globalisation just as China was taking on the mantle of a top global economic power. Asked if he thought the world was in a new Cold War, Kostin said that it was now a " hot war" that was more dangerous than the Cold War. The United States and the European Union, he said, would lose from moves to freeze hundreds of billions of dollars of Russian sovereign assets as many countries were moving to settling payments outside the U.S. currency and the euro while China was moving towards a removal of currency restrictions." ""China understands that they will not become world economic power Number 1 if they keep their yuan as a non-convertible currency ," Kostin said, adding that it was dangerous for China to keep reserves invested in U.S. sovereign bonds." SOURCE: https://www.reuters....

  Banks failing: Lessons learnt from Credit Sussie collapse. Part 2. WRITTEN BY Dr Giuliano Bianchi .  Two bailouts in just 15 years UBS in 2008 and now Credit Sussie. " “Never again” was the mantra and the goal was to bring Swiss laws in line with other frameworks (namely the U.S. and the EU) and to follow international financial recommendations (i.e., the Basel accords). The Swiss regulator sought to shore up the stability of the system and bring it in line with international capital market standards, in hopes of bolstering the attractiveness of the Swiss financial marketplace." The bank takeover and its consequences How did FINMA orchestrate UBS’ absorption of Credit Suisse? FINMA decided to write off Tier 1 capital,  tout simplement . This financial instrument was created by the international regulatory community after the 2008 financial meltdown to guarantee banks would have access to capital in case of distress. The idea is quite simple: Tier 1 works as a bond, but ...