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BW Businessworld

Globescan: Brexit Blues

China has proposed an international scientific cooperation programme for Earth observation to provide digital backing to Beijing’s mega Silk Road Project

Photo Credit : Shutterstock

If Britain votes to leave the European Union in June, some US banks could give up parts of their business in the bloc altogether. The option is an extreme scenario under consideration by some Wall Street firms if the terms of an exit, currently a matter of speculation, leave financial services companies in Britain unable under their current set-ups to do business inside the EU, according to discussions with several US banks and their lawyers. The scenarios being studied by taskforces at US banks underscore the extent to which the London operations of non-European banks are linked to business on the continent. In particular focus are the banks’ market operations, as trading of most European securities is regulated at the EU level but conducted by many investment banks mainly out of London.

Pink Slips

HSBC, Europe’s largest bank, started laying off 840 information technology workers in Britain, the first big tranche of redundancies under a restructuring plan that will eliminate 8,000 British jobs by the end of next year. The majority of the roles are based in London, Sheffield and Tankersley and all the jobs will disappear by the end of this year, the source said. “As part of a global relocation exercise, around 840 non-customer-facing IT roles will transfer from the UK to other sites around the world,” John Hackett, COO of HSBC UK, said in a statement. The bank unveiled its three-year restructuring plan last year, designed to pare back its sprawling global network by shutting underperforming businesses to improve earnings hurt by high compliance costs, fines and low interest rates.

Unfair Practice

Three French anti-racism associations said they would file legal complaints against social networks Facebook, Twitter and Google’s YouTube for failing to remove “hateful” content posted on their platforms. French law requires Websites to take down racist, homophobic, or anti-semitic material and tell authorities about it. But French Jewish students union UEJF and anti-racism and anti-homophobia campaigners SOS Racisme and SOS Homophobie said the three firms had removed only a fraction of 586 examples of hateful content the anti-racism groups had counted on their platforms between the end of March and 10 May. Twitter removed only four per cent, YouTube seven per cent and Facebook 34 per cent, according to the associations.

Slow Slide
Russia’s economy contracted by 1.2 per cent in the first quarter of this year compared with the same quarter last year, in a tentative sign of stabilisation, the state statistics service said. The latest GDP figures compared favourably to the 3.8 per cent contraction in the last quarter of 2015 and were better than the forecast by Economy Minister Alexei Ulyukayev who had expected a decline of 1.4 per cent in the first quarter. Russia has seen its economy slump into a profound recession, partly on the back of the fall in oil prices and Western sanctions over Moscow’s role in the Ukraine conflict. London’s Capital Economic consultancy said the year-on-year figure confirmed “the acute phase of the crisis is now over.” “The annual growth rate could return to the positive territory towards the end of the year,” it said in a note to clients. “Even so, the recovery looks set to be disappointing.”

Sky Watch
China has proposed an international scientific cooperation programme for Earth observation to provide digital backing to Beijing’s mega Silk Road Project. The “Digital Silk Road” proposal was put forward at an international symposium on Earth observation for the Belt and Road, the official designation for Silk Road said. The event was attended by over 300 Earth observation scholars and experts from more than 40 countries and regions along the Belt and Road, as well as international organisations like UNESCO. Guo Huadong , an academician of the Chinese Academy of Sciences, said space-based Earth observation technology will help enhance people’s understanding of the Belt and Road in a faster, broader and more accurate way.

Beyond Oil
Saudi Arabia aims to create the world’s biggest sovereign wealth fund, a $2 trillion behemoth that can throw its weight around global markets, but the fund’s growth abroad is likely to be slowed by its responsibility for aiding the economy at home. Building the Public Investment Fund into “the largest fund in the world by far” is a cornerstone of radical economic reforms announced by deputy crown Prince Mohammed bin Salman last month to cut the kingdom’s reliance on oil.
clear lead: Pfizer’s purchase of Anacor Pharmaceuticals heralds an approaching wave of potentially safer and more effective treatments for millions who suffer from eczema, a common skin condition which causes infection-prone rashes that can feel like having poison ivy 24 hours a day. More than two dozen drugmakers are working on novel medicines to treat the condition affecting about 20 million Americans, also known as atopic dermatitis, and Pfizer’s $5.2 billion deal positions it to become a market leader. Anacor’s steroid-free topical ointment crisaborole is the first of the new treatments to be reviewed by US regulators.

Big Blow
Google faces a record antitrust fine of around $3.4 billion from the European Commission in the coming weeks, British newspaper The Sunday Telegraph said. The European Union has accused Google of promoting its shopping service in Internet searches at the expense of rival services in a case that has dragged on since late 2010. Several people familiar with the matter believed that after three failed attempts at a compromise in the past six years Google now had no plans to try to settle the allegations unless the EU watchdog changed its stance. The Telegraph cited sources close to the situation as saying officials planned to announce the fine as early as next month, but that the bill had not yet been finalised.

Private Unlimited will launch new lines of its private-label brands in the coming weeks, the Wall Street Journal reported. The new brands with names like Happy Belly, Wickedly Prime and Mama Bear will include nuts, spices, tea, coffee, baby food and vitamins, as well as household items such as diapers and laundry detergents, the newspaper reported. Amazon will only offer these labels to its Prime subscribers, the Journal reported, adding the first of the brands could begin appearing at the end of May or early June. “We don’t comment on rumors or speculations,” a company spokeswoman said. Amazon launched Amazon Video Direct for users to post videos and earn royalties with them, setting it up directly against Alphabet Inc’s YouTube.

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magazine 13 june 2016 globescan european union hsbc russia