Trump eyes low-profile White House staffer to head consumer body
Monday 18 June 2018
FT
C002D5556
BUSINESS DAY
FINANCIAL TIMES
A3
World Business Newspaper
Ships carrying 630 migrants arrive in Spain after week of turmoil
Valencia landing comes after hardline Italian government refused entry
IAN MOUNT
The rescue ship Aquarius and two Italian vessels carrying more than 600 migrants arrived at the Spanish port of Valencia on Sunday, after a weeklong odyssey across the Mediterranean Sea sparked by the Italian government’ s refusal to allow those onboard to land.
Pedro Sánchez, Spain’ s new socialist prime minister, announced a week ago that the migrants, mainly sub-Saharan Africans, would be allowed to disembark in Valencia, after they were refused permission to enter first Italy and then Malta.
The Italian coast guard ship Dattilo was the first to arrive after a 1,300km journey. The Aquarius, a rescue ship operated by French NGO SOS Méditerranée, and the Italian navy ship Orione docked later. The 630 passengers of the three ships included 123 unaccompanied minors and several pregnant women.
More than 2,000 people, including Red Cross volunteers, translators, medics and police gathered at the port to meet and process the migrants, who were greeted with applause when they arrived. Many of those disembarking the Dattilo and Aquarius appeared relieved, smiling as they stepped down into the dock.
The head of emergencies for the city of Valencia said a total of 44 people had been taken to hospital, although none were thought to be in a serious condition.“ Despite the fatigue, they are generally in good spirits,” the Red Cross said on Sunday.
Magdalena Valerio, immigration and social security minister, said:“ These people cannot be allowed to float around the Mediterranean, where they face the possibility of dying … This country [ Spain ] is showing its solidarity and generosity.”
Spain initially said the migrants would be given a month-long residency authorisation, later increased to 45 days, and then would be treated according to Spanish law“ without major exceptions”.
The fate of the migrants opened a
Nicolás Dujovne says care has been taken to ensure austerity drive is not overambitious
Argentina’ s Treasury and finance minister insisted that the government would meet tough new targets for lowering the fiscal deficit next year, as he defended the country’ s decision to seek a $ 50bn bailout from the International Monetary Fund.
“ We took great care in reaching a deal that [ will not ] force us into positions of political stress that could be counterproductive,” said Nicolás Dujovne in an interview with the Financial Times, recognising that an overambitious austerity drive could endanger President Mauricio Macri’ s hopes of winning a second four-year term in elections in 2019. crisis in the EU shortly after the Aquarius rescued them off the Libyan coast on June 9. Matteo Salvini, Italy’ s new interior minister and leader of the far-right League, refused to allow the ship to dock and demanded that Malta accept the migrants. Maltese officials refused, leaving the migrants in limbo.
The recently installed populist coalition in Rome, comprising Mr Salvini’ s League and the anti-establishment Five Star Movement, has taken a hard line on undocumented immigrants and has said it will be more confrontational with Brussels and other EU member states over the issue.
Over the past four years, Italy has taken in almost 640,000 migrants, and previous efforts to create a system to share the cost and effort required have foundered on anti-immigrant sentiment that has been sweeping the continent.
After Italy’ s refusal, tensions flared when French president Emmanuel Macron accused Rome of“ cynicism and irresponsibility” for not accepting the migrants and Italian prime minister Giuseppe Conte replied that he would not accept“ hypocritical lessons from countries that have always preferred to turn their backs when it comes to immigration”.
Mr Sánchez’ s cabinet at the weekend announced that the French government had offered to accept the immigrants who wished to continue on to France. The Spanish prime minister thanked Mr Macron and said:“ This offer shows that this is the framework of co-operation with which Europe must respond, with a spirit of European solidarity and real content.”
Mr Sánchez, who took power two weeks ago after winning a vote of noconfidence against former centre-right prime minister Mariano Rajoy, has sought to present himself as more progressive than his predecessor.
In an example of their more progressive bent, Fernando Grande-Marlaska, Spain’ s interior minister, this week said that the Sánchez government wanted to remove the wire fencing around Melilla and Ceuta, two Spanish territories in north Africa.
Argentina’ s Treasury minister defends IMF bailout
BENEDICT MANDER
EM crisis clashes with Fed hawkishness
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Mr Dujovne nevertheless pointed to innovative clauses in the deal proposed by Argentina that will allow the government to increase spending on social programmes and relax the deficit targets if necessary, which the fund“ welcomed warmly”.“ It will probably apply this in other countries,” he added.
Such socially sensitive terms contrast with past IMF programmes, not least the fund’ s last standby arrangement with Argentina that ended with the 2001-02 financial crisis that had grievous social consequences and tarnished the multilateral lender’ s reputation in the country and beyond.
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Trump eyes low-profile White House staffer to head consumer body
Move to nominate Kathy Kraninger seen fitting pattern of quietly defanging bank rules
BARNEY JOPSON
President Donald Trump plans to nominate a little-known White House official to head a financial watchdog meant to protect consumers in the latest sign of his administration embracing a lowprofile approach to slashing bank regulations.
Mr Trump wants to place Kathy Kraninger, a budget official who has rarely appeared in the news, as head of the Consumer Financial Protection Bureau. She would succeed Mick Mulvaney, the acting chief who is also her boss as head of the White House budget office.
Mr Mulvaney, an outspoken former conservative lawmaker, was appointed as the CFPB’ s acting head last November and became the face of Trump administration efforts to defang the seven-year old agency and make it more bank-friendly.
The White House announced the plan to nominate Ms Kraninger, an associate director in the White House budget office, on Saturday.
The CFPB was created by the Dodd-Frank reforms that followed the 2008-09 financial crisis and was reviled by bankers and Republicans, who saw it as an example of big government run amok, and blamed it for stifling the financial sector.
Ms Kraninger, a former Capitol Hill aide who will face an uncertain confirmation vote in the US Senate, has not worked as a regulator or in financial services or spoken publicly about the CFPB. Mr Mulvaney, by contrast, famously once called the agency a“ sick joke”.
The nomination of a low-profile bureaucrat and the Saturday announcement fits with the Trump administration’ s broader approach to bank deregulation, which critics say appears aimed at attracting little attention and downplaying significant moves.
Dennis Kelleher, head of Better Markets, a pro-regulation campaign group, said:“ The Trump administration continues its relentless deregulation and anti-consumer crusade with its hope-no-one-ispaying-attention Saturday night announcement.”
Although Mr Trump has championed business deregulation as one of his biggest accomplishments, he has rarely highlighted specific measures to loosen rules for banks, which do not get primetime announcements or the fanfare of press conferences.
Republican lawmakers acknowledge privately that making life easier for banks does little to appeal to voters in an election year, including Americans who are struggling economically and warmed to Mr Trump’ s populist campaign message.
Lindsay Walters, White House deputy press secretary, said:“[ Ms Kraninger ] will bring a fresh perspective and much-needed management experience to the [ CFPB ], which has been plagued by excessive spending, dysfunctional operations, and politicised agendas. As a staunch supporter of free enterprise, she will continue the reforms of the bureau initiated by acting director Mick Mulvaney, and ensure that consumers and markets are not harmed by fraudulent actors.”
Mr Mulvaney has already made big strides in stymying some of the CFPB’ s former work, putting a temporary freeze on new regulations and moving to review proposed rules, including those on payday lenders.
The secret VTB stake that helped lead to Otkritie’ s downfall
The private bank’ s rapid growth was supported by state-run VTB but their links went deeper
MAX SEDDON
When Otkritie, then Russia’ s largest privately held lender, was nationalised last year to stave off its collapse, state-run bank VTB wrote off its 10 per cent stake in the bank’ s parent company.
Then a new central bank-appointed team sorting through the mess made a startling discovery: the upstart Otkritie had itself secretly amassed a 20 per cent stake— more than half the free float— in VTB. This made it the largest shareholder after the Kremlin.
The disclosure last January shocked Russia’ s financial sector— already reeling after the central bank nationalised three top-10 lenders in four months at a cost of $ 24bn— and sparked feverish speculation over the motive behind the purchases, which VTB insists it knew nothing about.
A non-entity just a few years ago, Otkritie grew rapidly thanks to cheap central bank funding and acquisitions
AIG: The long struggle to repair its reputation
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US President Donald Trump is looking to appoint a person who has never worked as a regulator or in financial services to head the Consumer Financial Protection Bureau © Reuters
funded in part by VTB. Yet the central bank later delivered a damning verdict on the bank, saying its capital was“ largely fictitious” and its management style marked by“ adventurism”.
The VTB purchase played a key role in Otkritie’ s downfall, according to Mikhail Zadornov, the bank’ s new, central bank-appointed chief executive. Mr Zadornov told the FT in an interview that Otkritie spent so much on the VTB shares in late 2014 that its“ colossal” losses on the trade numbered in the“ tens of billions of roubles”.
But Otkritie’ s loss was VTB’ s gain. Bankers say that Otkritie’ s massive purchases helped boost VTB’ s stock— long one of Russia’ s underperformers amid concerns about the bank’ s profitability and corporate governance— by helping to wipe out the short interest on the Moscow exchange and nearly double the price.
VTB says that it only learned of the stake, which is now down to 15 per cent, last autumn, and denies any role in Otkritie’ s purchase. The stake was spread out among Otkritie’ s various subsidiaries to keep the individual holdings below the disclosure threshold of 5 per cent.“ Nobody ever enlightened us about these plans officially or unofficially and we don’ t know anything about them,” the bank said.
Otkritie’ s quiet relationship with VTB
Otkritie’ s former owners, led by founder Vadim Belyaev, continue to operate through a company called Otkritie Holding, despite losing control of the bank. They did not respond to requests for comment.
The undeclared purchase was so secret that Mr Zadornov, who ran VTB’ s retail arm for 13 years, says he had no idea about it until central bank governor Elvira Nabiullina tapped him to head up Otkritie last fall. The stake is so large that it entitled Mr Zadornov to appoint himself and a deputy to VTB’ s board in April.