Federal Reserve Approves New Measure for Big Banks
The U.S. Federal Reserve has announced new rules that would apply to the country's 8 largest banks, which hold over $10 trillion in loans and securities. The group includes Goldman Sachs, Citigroup and JPMorgan Chase, which may face an estimated $12.5 billion financial shortfall under the new measures. The new measures, which were proposed in December, will focus on a bank's capital, which will increase for the 8 banks as a means to ensure they are more resistant to economic and market shifts. Currently, international banking rules dictate the banks must have a capital equivalent to 7% of its assets. Under the new provisions, JPMorgan - the largest U.S. bank by assets, will have to hold 4.5% more.
Gold Falls Alongside Chinese Gold Reserve Estimates
Gold futures fell for an eighth straight session as data showed China's gold reserves to be at half of market expectation. The drop pushes gold prices to its lowest level in over 5 years. August gold fell 2.2% ($25.10) to $1,106.80 an ounce. Meanwhile, China has released an update on its gold reserves for the first time in 6 years, reflecting a total of 53.32 million troy ounces - up 57% since the end of April 2009. However, the figures were still lower than expectations, given China is the world' largest producer of gold. Other metal prices have also declined, with September silver down 0.5% (7.6 cents) to $14.758 an ounce and Octobert platinum dropping1.3% ($12.70) to &988.60 per ounce.
First Data Corporation Slated to Go Public
First Data Corporation, a credit card and payments processor, filed on Monday for an I.P.O., paving the way for private equity firm Kohlberg Kravis Roberts (K.K.R.) to sell its majority stake after buying the company for $29 billion 8 years ago. The deal was one of the last big leveraged buyouts before the financial crisis in 2008, and K.K.R. is finally looking to exit from one of the most debt-laden agreements in recent years. Currently, Renaissance Capital estimated First Data could raise $5 billion in its initial offering, as the company plans to the use proceeds from the stock sale to repay a portion of its $20 billion long-term debt. While First Data claims some 4,000 financial institutions as clients globally, and boasts a revenue of $11.1 billion, the company lost $265 million in 2014.
Toshiba Executives Quit Amid Earnings Scandal
Top executives at Japanese electronics firm Toshiba have stepped down amid an accounting scandal, which has forced the company to state it will correct earnings figures by at least 152 billion yen ($1.2 billion). According to a third party report, the firm's current and previous presidents Hisao Tanaka and Norio Sasaki sought to delay booking losses, requiring recalculations and earnings cuts from more than 6 years. The largest single earnings figure to be corrected is 85.8 billion yen of pretax profile in 2012; an internal probe also found inaccurate entries totaling 4.4 billion yen for that fiscal year. The company's stock has fallen 20% since the probe was first announced on May 8th.
Sources:
http://www.bloomberg.com/news/articles/2015-07-21/toshiba-to-correct-profit-after-executives-set-unrealistic-goals
http://www.marketwatch.com/story/big-fund-suspected-of-selling-gold-as-price-crashes-to-five-year-low-2015-07-20
http://www.nytimes.com/2015/07/21/business/dealbook/first-data-ipo-is-likely-to-be-one-of-years-largest.html
http://www.nytimes.com/2015/07/21/business/federal-reserve-finalizes-capital-restraints-for-big-banks.html
