Citadel, BlackRock refute Terra trading rumors; leveraged ETFs under SEC lens

TOP NEWS IN BANKING & FINANCIAL SERVICES

* Citadel Securities and BlackRock Inc. have denied their involvement in the collapse of the algorithmic stablecoin TerraUSD, rejecting claims circulating on social media in recent days, Bloomberg News reported, citing separate statements from representatives of the firms. Both firms said they do not trade TerraUSD, which is pegged to the U.S. dollar. TerraUSD's value has plummeted far below $1 since Saturday as all of the mechanisms to maintain its value stopped working.

* SEC Chair Gary Gensler said at an industry event that the regulator is closely examining investment firms using leveraged and inverse exchange-traded funds to hedge against market volatility over concerns that such products "can potentially create system-wide risks by operating in unanticipated ways when markets experience volatility or stress conditions," Bloomberg reported.

➤ Singapore bank loans to grow as Southeast Asia reopens after pandemic

Singapore's banks are likely to see faster loan growth and improved profitability as Southeast Asian economies open up for business and travel after two years. Loans across the three Singaporean banks — DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. Ltd. and United Overseas Bank Ltd. — rose by 8% to 9% year over year in the first quarter of 2022, according to their recently announced results.

➤ UK-based parametric insurance company readies for US market launch

S&P Global Market Intelligence sat down with FloodFlash Ltd. co-founder Adam Rimmer at the RiskWorld 2022 Conference in San Francisco to talk about his company's history and the specifics of parametric insurance, as well as about FloodFlash's move into the U.S. market.

READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.

BANKING

* In Minnesota, Affinity Plus FCU, Spire CU, Hiway CU and TopLine FCU recently created United Financials Capital, a credit union service organization focused on commercial lending, American Banker reported, citing Michael Dalglish, the new entity's president and CEO. United Financials will enable the four credit unions to fund loans up to $50 million — loans for large commercial and infrastructure projects across the upper Midwest that they could not finance before, according to the report.

FINANCIAL SERVICES

* A group of payment industry associations, including the Electronic Transactions Association and the Money Services Business Association, has created a document outlining compliance best practices aimed at helping payment companies fight illicit activity such as money laundering and terrorism financing, The Wall Street Journal reported. The proposed guidelines will help money-services businesses develop and adhere to strong compliance programs that have the potential to facilitate more banking relationships, a spokesperson for the American Bankers Association reportedly told the Journal.

* Slate Asset Management LP, a global alternative investment platform focused on real assets, is buying Presima Inc., a Montreal-based investment manager with $1.1 billion in AUM.

* PSCU Inc., a payments credit union service organization, acquired Juniper Payments LLC, a cloud-based nonbank third-party provider of inter-bank transaction and reporting systems in the U.S.

* SoLo Funds Inc., a Los Angeles-based peer-to-peer lending fintech, received a temporary cease-and-desist order from Connecticut's state banking commissioner over alleged violations of state rules, American Banker reported. The regulator accused the firm of asking consumers to pay a voluntary monetary "tip" when applying for a loan but only giving loans to those who offered a tip.

POLICY AND REGULATION

* The Federal Reserve Bank of Dallas appointed Lorie Logan president and CEO. Logan will begin her role as president on Aug. 22. Logan is replacing former President and CEO Robert Kaplan, who retired from the Dallas Fed on Oct. 8, 2021.

* The U.S. Senate confirmed Philip Jefferson to the Federal Reserve, making him the third nominee of President Joe Biden to win a seat on the central bank's seven-person board of governors, The Wall Street Journal reported. The Senate has already confirmed economist Lisa Cook to the Fed board and Fed governor Lael Brainard as the central bank's vice chairwoman. The upper chamber is set to vote today on confirming Fed Chair Jerome Powell to a second term.

* As the market capitalization of bitcoin and other crypto currency assets continues to rise rapidly, the Financial Accounting Standards Board, or FASB, voted yesterday to consider setting rules related to accounting and disclosure of certain digital assets, The Wall Street Journal reported. The FASB's project should focus on digital assets that do not carry ownership rights, and not those with copyrights such as nonfungible tokens, FASB Chair Richard Jones reportedly said.

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