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Home » Daily Briefing » Daily briefing - 6 December 2016

Daily briefing - 6 December 2016

There's no easy answer for what to do with Banca Monte dei Paschi di Siena: the world's oldest bank is careening down a cliff face as its share continues a downward trajectory that has been in motion since last year. The bank's problems have been well documented, but "Italian politicians and regulators have fiercely resisted bail-in, fearing it would frighten off investors, spook depositors and enrage voters," according to the Financial Times. There's a sense of dominos collapsing and rules being bent. Another bailout? Unlikely. This time it's probably going to be a bail-in of some sort, and that's why established politicians are terrified: they've kicked this can all the way down the road and into a virtual cul de sac. As for dominos, thoughts now turn to France's election next year. The unravelling of the European Union might be beginning, and lots of political intelligence will be needed to keep it together. Who is going to step forward?

Deloitte's Brazilian arm has admitted to wrongdoing and will pay $8 million to settle civil charges that it issued — and then tried to cover up — false audit reports, writes the Irish Times. The fine was issued by US regulator, the Public Company Accounting Oversight Board (PCAOB). "Deloitte Brazil is now the first-ever global network firm to admit to wrongdoing in a settlement, the first to be hit with securities fraud charges and the first to be accused of failing to cooperate with a PCAOB probe."

Alipay today announced a major expansion of its European partnerships. The tie-up with Barclays, BNP Paribas, UniCredit and Six Payment Services will enable Alipay users to shop at a lot more merchants: 930,000 more, according to Alipay. "We already have partnerships with some of Europe's most well-known retailers, which have proven extremely popular with travelling Chinese consumers. By working with financial institutions who already have a massive footprint in Europe, we are taking our presence in the continent to the next level," said Douglas Feagin, senior vice president of Ant Financial and president of Alipay International.

Amazon continues to press ahead with technology-led concepts, now including a store — a real bricks-and-mortar store, that is — where shoppers can pick up the goods and walk out with them, without going through a checkout. According to this story in the Washington Post, Amazon plans to use computer vision, machine learning and artificial intelligence. Does this seem a little over the top for grocery shopping? Amazon is already a big user of robots, so perhaps this is just an expansion of its robot workforce, as we guess there won't be many people in the store. We've highlighted this issue before, with comedian Bill Burr tackling the topic of automated checkouts: "I couldn't believe the first time I saw that. I walked into a grocery store, here I was, I thought I was a comedian. Apparently, now I also work at a grocery store."

Another company turning to high technology is Deutsche Bank, following a route currently being blazed by BBVA. Here's John Cryan's Christmas message to employees, and yes, it's straight from the Deutsche Bank newsroom: "This year I have visited the world's biggest idea factory, Silicon Valley, several times and did so just recently with my colleagues from the management board. We met business partners and managers of companies such as Apple, Salesforce and Workday. But we also saw a lot of start-ups — many of whom presented surprising ideas. What we can conclude after the days on the US West Coast is that we don't have to hide away. With our Digital Factory and innovation labs in San Francisco, London and Berlin we are staying close to the latest trends. We also established our data lab in Dublin with an official launch in October. We are ready to accelerate our transformation into a technology-driven company to win back market share with new, cutting-edge ideas."

Mr Cryan appears to be drinking the Silicon Valley kool-aid: this "idea factory" mainly consists of one big idea, which is a technology-driven monopoly business model. Hardly the competitive edge that Mr Cryan is thinking about.

Finally, it is worth noting that a major protest movement led by Native Americans has apparently succeeded, with the help of the Obama administration. The Dakota Access pipeline will now have to be rerouted after the Army Corp of Engineers denied the developers a permit to drill under a river on Sioux land. Now, the chief of the tribe has asked the protestors to return home, according to the Guardian. One bank came out of this particularly well: two weeks ago, Norway's DNB announced that it had sold off its assets in the project. The protest gained wide support on social media, with people from around the world 'checking in' at the Reservation.

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