26 June 2024 – The Fund Society

American Electric Power names Berkshire Hathaway veteran as new chief executive

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Federal Reserve says all 31 banks in annual stress test withstood a severe hypothetical downturn

The Federal Reserve said Wednesday that the biggest banks operating in the U.S. would be able to withstand a severe recession scenario. Each of the 31 banks in this year’s regulatory exercise cleared the hurdle of being able to absorb losses while maintaining more than the minimum required capital levels, the Fed said in a statement. This year’s stress test included giants such as JPMorgan Chase and Goldman Sachs, credit card companies including American Express and regional lenders such as Truist. Federal Reserve Board Vice Chair for Supervision Michael Barr testifies before a House Financial Services Committee hearing on the response to the bank failures of Silicon Valley Bank and Signature Bank, on Capitol Hill in Washington, D.C., on March 29, 2023. Kevin Lamarque | Reuters

The Federal Reserve said Wednesday that the biggest banks operating in the U.S. would be able to withstand a severe recession scenario while maintaining their ability to lend to consumers and corporations.

Each of the 31 banks in this year’s regulatory exercise cleared the hurdle of being able to absorb losses while maintaining more than the minimum required capital levels, the Fed said in a statement.

The stress test assumed that unemployment surges to 10%, commercial real estate values plunge 40% and housing prices fall 36%.

“This year’s results show that under our stress scenario, large banks would take nearly $685 billion in total hypothetical losses, yet still have considerably more capital than their minimum common equity requirements,” said Michael Barr, the Fed’s vice chair for supervision. “This is good news and underscores the usefulness of the extra capital that banks have built in recent years.”

The Fed’s stress test is an annual ritual that forces banks to maintain adequate cushions for bad loans and dictates the size of share repurchases and dividends. This year’s version included giants such as JPMorgan Chase and Goldman Sachs, credit card companies including American Express and regional lenders such as Truist.

While no bank appeared to get badly tripped up by this year’s exercise, which had roughly the same assumptions as the 2023 test, the group’s aggregate capital levels fell 2.8 percentage points, which was worse than last year’s decline.

That is because the industry is holding more consumer credit card loans and more corporate bonds that have been downgraded. Lending margins have also

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Which Countries Have the Highest Corporate Tax Rates in the G20?

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June 26, 2024 Graphics/Design:

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Which Countries Have the Highest Corporate Tax Rates in G20?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In the wake of the 1999 Asian financial crisis, government representatives from the 20 largest economies in the world decided to informally gather to coordinate policy on trade. Thus began the G20.

Together the bloc accounts for more than 85% of the world economy and has been credited with unified policy action in response to world events.

However, despite this shared affiliation, this group is still made of fundamentally different economies with varied policies towards their business entities.

For a quick overview, we visualize and rank the G20 countries by their headline corporate tax rates. Data is sourced from Trading Economics, accessed June 2024. Data for the EU and the African Union (both G20 members) has not been included.

Ranked: G20 Members by Their Corporate Tax Rates

Argentina and India have the highest corporate income tax rates, at 35% in the G20.

However, both countries have a progressive ladder for taxation, so this headline number may only apply to a smaller subset of firms. For foreign companies with a “permanent entity” in India, the rate climbs past 40%.

RankG20 MemberCorporate Tax Rate 1🇦🇷 Argentina35% 2🇮🇳 India35% 3🇧🇷 Brazil34% 4🇯🇵 Japan31% 5🇦🇺 Australia30% 6🇩🇪 Germany30% 7🇲🇽 Mexico30% 8🇨🇦 Canada27% 9🇿🇦 South Africa27% 10🇨🇳 China25% 11🇫🇷 France25% 12🇹🇷 Türkiye25% 13🇬🇧 UK25% 14🇮🇹 Italy24% 15🇰🇷 South Korea24% 16🇮🇩 Indonesia22% 17🇺🇸 U.S.21% 18🇷🇺 Russia20% 19🇸🇦 Saudi Arabia20%
Note: EU and African Union not included. Figures rounded. Data accessed June 2024.

Interestingly, BRICS countries cover the spectrum of corporate tax rates. Starting from the highest (India, Brazil) to middle of the pack (South Africa, China) to lowest (Russia).

On the other hand, most of the G7 cluster in the mid-ranges (24–30%), with Japan the highest outlier

Top US banks withstand annual ritual of Fed ‘stress tests’

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NYSE trading glitch costs Interactive Brokers $48mn

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Stocks making the biggest moves midday: Rivian Automotive, FedEx, Whirlpool and more

Check out the companies making headlines in midday trading: Rivian Automotive — The stock surged more than 20% following the announcement that the electric vehicle startup secured a $5 billion investment from Volkswagen Group. Volkswagen’s initial investment will be $1 billion in the form of a convertible note, with the additional $4 billion expected by 2026. Shares of fellow EV startup Lucid rose nearly 5% in sympathy. FedEx — Shares of the company moved more than 14% higher after topping Wall Street’s fiscal fourth-quarter expectations . The shipping giant earned $5.41 per share, after adjustments, on $22.11 billion in revenue. Analysts polled by LSEG were expecting earnings of $5.35 per share and revenue of $22.07 billion. The company’s fiscal 2025 forecast was roughly in line with estimates. Whirlpool — Shares soared nearly 15% after Reuters, citing people familiar with the matter, reported Bosch is considering making an offer for the appliance manufacturer. Aptiv — Shares of the automotive technology company plunged 10% following Piper Sandler’s downgrade of the stock to underweight from neutral . The firm slashed its price target to $63, which implies a 14% drop from Tuesday’s close, and said the joint venture between Rivian and Volkswagen points to less reliance on companies such as Aptiv for electrical architecture. General Mills — The consumer food stock slipped about 5% after posting a mixed fiscal fourth-quarter earnings report. The company earned $1.01 per share, excluding items, on revenue of $4.71 billion, while analysts had expected per-share earnings of 88 cents on revenue of $4.85 billion. The firm’s revenue forecast for fiscal year 2025 also fell short due to cost pressures. Paychex — Shares of the company fell around 5% despite posting better-than-expected fiscal fourth-quarter earnings. Paychex posted adjusted earnings of $1.12 per share, which is above the $1.10 earnings per share that analysts polled by LSEG were expecting. Revenue was in line with expectations at $1.3 billion. Tesla — The EV maker’s stock rose 3% after Stifel initiated coverage of the stock with a buy rating. The firm cited the revamping of Tesla’s Model 3 and Model Y as well as the start of production on its next-generation Model 2 vehicle as catalysts. Its price target of $265 implies 41.4% upside from Tuesday’s close. Grindr — Shares jumped 15% after the LGBTQ+ dating app laid out a

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Charted: The Death of Cash Transactions Around the World

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June 26, 2024

See this visualization first on the Voronoi app.

Cash Transactions are Becoming More Rare Around the World

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

As credit cards and digital wallets (e.g. Apple Pay, Paytm, Alipay) see increasing adoption around the world, the share of cash being used in transactions is plummeting.

The chart above looks at cash as a share of transaction value in selected countries at three time periods (2019, 2023, and 2027P). Highlighted in red is cash’s projected drop from 2019 to 2027. This data showing the death of cash comes from WorldPay’s Global Payments Report 2024.

Where Cash is King (For Now)

The prominence of cash for use in transactions is dropping in every country measured. This includes countries where cash was preferential method of payment in POS transactions.

One clear example is Nigeria. In 2019, over 90% of transaction value was still in cash payments. That number has now fallen to 55% today. Cash is still the leading payment method in Nigeria and a handful of other nations, but current trends indicate this may not be the case for much longer. For now, cash also remains the leading method of payment in various South American and East Asian countries.

Below is a full list of countries included in the report, along with cash’s share of transaction value in those countries.

CountryShare of POS Transaction ValueCash is leading playment method in country Nigeria55%✔️ Thailand46%✔️ Philippines44%✔️ Japan41%✔️ Mexico38%✔️ Spain38%✔️ Indonesia38%✔️ Vietnam38%✔️ Germany36% Peru35%✔️ Colombia34%✔️ South Africa33% Turkïye33% Poland32% Malaysia32%✔️ Saudi Arabia29% Argentina27%✔️ Italy25% Taiwan25% Brazil22% Chile22% Ireland18% India18% UAE17% Belgium16% Singapore15% United States12% France12% United Kingdom10% South Korea10% Hong Kong SAR9% Denmark8% Finland7% Netherlands7% Australia7% China7% Canada6%

cash cashless society Currency digital wallets Money war on cash

FCA pressed to block Shein’s London IPO over labour practices

Shein has been reportedly looking to IPO in London, after a failed attempt to list in New York earlier this year. Raspberry Pi confirms London listing In the letter, sent on behalf of UK charity Stop Uyghur Genocide, Leigh Day argued that concerns over the company’s labour practices in its supply chains, among others, ultimately led to the refusal from the US Securities and Exchange Commission to allow Shein to IPO in New York. “The UK is a signatory to various International Labour Organisation conventions,” the letter stated. “Our client is concerned that listing a company on the …

‘The most logical move’: Alliance Witan shareholders poised to benefit from better liquidity and lower costs

Both trusts joined this year’s investment trust M&A drive today (26 June) with news of the formation of Alliance Witan, a £5bn vehicle that will likely be catapulted into the FTSE 100 to join the likes of Scottish Mortgage and F&C investment trust. The blockbuster merger, described by Stifel analysts as “the most logical move”, comes as a result of Witan CEO Andrew Bell’s retirement, which prompted an invitation for proposals from interested parties for the future management of its portfolio. “While not an unexpected move following the retirement of Witan CEO Andrew Bell, this announc…

Cresset’s flagship private credit fund surpasses $500m

Cresset Partners, the private investment arm of Cresset Capital, a $50bn wealth management and multi-family office platform, has seen its flagship private credit fund, Cresset Partners Private Credit Fund, surpass $500m in AUM, since its launch last April.

The fund’s portfolio comprises senior secured, sponsor-backed loans to US middle market borrowers, as well as other private credit opportunities.

In a statement, Bradley Schneider, Managing Director and Head of Private Credit at Cresset, said that CPCF had “delivered annualised distributions of 12.5% for the most recent two quarters”.

CPCF has also partnered with financial services group ORIX USA’s subsidiary, NXT Capital, a Chicago-based middle market direct lending platform operating through its direct lending group and targeting US-based borrowers with EBITDA between $5m and $50m. The partnership aims to provide individuals and family offices on Cresset’s platform with access to direct private lower middle market investment opportunities.

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