FirstFT: Top financial watchdog warns West against Russia sanctions
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The chairman of the world’s most powerful financial watchdog called on Western leaders to “think twice” before imposing sanctions on Russia, warning that some sanctions risk undermining global financial stability.
Klaas Knot, chairman of the Financial Stability Board, told the Financial Times that suspending Russia’s access to the Swift international payment system, which underpins billions of dollars in transactions annually, could lead to a “serious disruption of payment flows”.
“When applying harsh measures, always think twice and be aware of the consequences” — Klaas knot
President Vladimir Putin eased tensions in the crisis and withdrew some Russian troops from border areas to allow “dialogue” with the West while maintaining the threat of invasion hanging over his neighbour.
US and European stocks rallied after Putin said he was ready to hold talks if the US and NATO agreed to discuss Moscow’s grievances, including its demand that the transatlantic alliance not never admit Ukraine.
Analysts treated Moscow’s latest announcement that it was ready to defuse with caution, as Kiev revealed a new round of cyberattacks on government websites and banks.
Washington has released more information about an alleged Russian coup plot against Ukraine, but President Joe Biden yesterday reiterated that there is still “a lot of room for diplomacy”.
Explanation: Can the Minsk agreements help defuse Russian-Ukrainian tensions? The French and German leaders want to relaunch the stalled talks. Poland, meanwhile, is preparing for an influx of refugees fleeing Ukraine.
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Five other stories in the news
1. Global financial watchdog calls for ‘urgent’ action to contain crypto risks The FSB also warned that big banks and other systemically important financial institutions were “increasingly willing” to expose themselves to crypto and pointed out that global stablecoins pose particular risks to financial stability.
2. Argentina’s president struggles to sell IMF deal to skeptical Congress The country’s deal with the IMF to restructure $44.5 billion in debt is threatened by a rift in the government’s own ranks just weeks before an impending deadline to finalize the deal.
3. Eric Schmidt Creates $125 Million Fund for “Hard Problems” in AI Research Former Google CEO launches $125 million philanthropic project to fund artificial intelligence research that solves tough problems on the ground, including issues of bias, prejudice and abuse, geopolitical conflict and scientific limits of the technology.
4. Iran calls on US to commit to nuclear deal In an interview with the FT, Iranian Foreign Minister Hossein Amirabdollahian asked for assurances that Washington would not abandon the nuclear deal as it did under former President Donald Trump, as Tehran proposed Congress to make a “political statement” on the deal.
5. Biden’s gas problem: President eyes gas tax cut as pump prices soar Rising gasoline prices, already at their highest level in seven years, are fueling broader inflation and threatening to derail Biden’s presidency, political analysts say. On Tuesday, the White House said it could scrap federal gasoline taxes in a bid to provide immediate relief to drivers.
Summary of coronavirus
Review: the San Francisco one the unified front on wearing the mask is starting to unravel. The city, which was quick to enforce the rules at the start of the pandemic, is now relaxing them, writes Dave Lee.
the European Medicines Agency is unlikely to grant conditional marketing authorization to Merck’s Covid-19 antiviral pill molnupiravir this month as it grapples with “problematic” data.
president of china Xi Jinping said hong kong to “take all necessary steps” to contain the city’s biggest wave of coronavirus in a rare directive that analysts say could pave the way for tougher measures.
Opinion: We face the looming threat of protracted and disorderly but necessary debt restructuring, writes Martin Wolf.
the European Central Bank must take into account “unprecedented” increases in house prices to assess high levels of inflation, said board member Isabel Schnabel.
The day ahead
NATO defense ministers meet The alliance is meeting in Brussels for two days to decide whether to deploy troops to southeastern Europe amid tensions on the Ukraine-Russia border. (Reuters)
1MDB trial A former Goldman Sachs banker at the center of the multi-billion dollar scandal is set to appear in federal court in New York to testify in the criminal trial of his former colleague, Roger Ng.
EU funding decision for the rule of law The EU’s top court has dismissed Poland and Hungary’s legal challenge to the bloc’s rules, clearing the way for Brussels to withhold funding from member states for breaches of the rule of law.
France’s dinner for military partners Emmanuel Macron will welcome France’s military partners in the Sahel to the Elysee Palace on the eve of an EU-Africa summit in Brussels as Paris tries to revamp its counter-terrorism operation in West Africa.
Inflation UK and Canada release January Consumer Price Index data. Economists polled by Reuters expect the annual pace of inflation in Britain to hit 5.4%, as it did in December, a 30-year high. Stay up to date with our inflation tracker.
In the USA: Retail sales are expected to have rebounded last month thanks to online orders and auto purchases. Minutes from the Federal Reserve’s January meeting, when the central bank signaled rate hikes, are also out. (WSJ, FT)
What else we read
Inflation tracker: Latest figures as countries grapple with rising prices The FT analyzes rising consumer and housing prices around the world and assesses the duration of trends.
Unilever’s tea business tests PE awareness Workers at a tea plantation in Kenya are still seeking medical compensation from the consumer goods group after seven people were killed and 56 women raped in a 2007 attack fueled by ethnic tensions. Now CVC’s $4.5 billion deal to buy brands such as PG Tips means it will also be responsible for plantations in Africa.
Citi’s Jane Fraser gives up on her big league dreams Citigroup has conceded its ambition to become one of Wall Street’s top three investment banks in order to focus on companies that offer growth opportunities while being less capital intensive. But making the case for the strategy will test the communication skills of its chief executive.
The bruised but dynamic “worried” chief of BP Shortly after taking the helm, Bernard Looney’s plan to turn the 112-year-old oil major into an integrated energy company stalled and its shares fell to their lowest level in 25 years. But Looney is still optimistic, although somewhat chastised by his murderous introduction.
Why the childhood of NFTs can last a long time Measured in financial terms, the market looks big: around $24 billion worth of non-fungible tokens have been traded to date. But when you count users instead of dollars, the industry is tiny, writes FT global technology correspondent Tim Bradshaw.
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