Globetrotting: news from around the world — April 2016

The French banking sector is facing stormy conditions for the year ahead, and Germany may need to bail out debt-stricken Italian banks.

BANKING

What goes up...

Life was good for French banks in 2015. The six main banking groups (BNP Paribas, Société Générale, Crédit Agricole, BPCE, Crédit Mutuel and Banque Postale) posted profits of 22.9 billion euros ($33 billion) — not too far from the precrisis level of 28.4 billion euros recorded in 2006, reports Parisian daily Les Échos. But 2016 doesn’t look so promising.

The reason is simple. The six banks have been earning most of their profits from their investment banking. Thanks to favourable markets, BNP Paribas’ investment banking profits rose in 2015 to 3.32 billion euros, an increase of 18%.

Since the beginning of 2016, however, French and other European bank stocks have taken a huge hit. According to one analyst, low interest rates and high volatility are creating stormy conditions that will hit banks in their three main revenue generators for 2016: retail, investment and portfolio management.

Mouse 

BIOLOGY

Longer lease on life

Mayo clinic biologists have extended the median lifespan of mice by 17% to 35%, reports Scitechdaily.com. And they hope to do the same with humans.

The scientists showed that senescent cells — which no longer divide and accumulate with age — can significantly reduce the lifespan of mice. These cells produce factors that damage cells next to them. The immune system regularly cleans out senescent cells, but loses in efficiency over time.

Using a transgene on mice, the scientists provoked a drug-induced elimination of these cells, thereby delaying the formation of tumours and reducing the age-related deterioration of several organs. “The advantage of targeting senescent cells is that clearance of just 60% to 70% can have significant therapeutic effects,” said molecular biologist Darren Baker.

EUROZONE

The new PIIGGS

Until recently, PIIGS stood for the most unstable economies in Europe: Portugal, Ireland, Italy, Greece and Spain. But if Geopolitical Futures founder George Friedman is right, another G should be added, this time for Germany.

Friedman told UK’s Business Insider that the problem lies with Italian banks, which hold 300 billion euros ($430 billion) of nonperforming loans — a massive 17.3% of outstanding loans (compared with an average of 2.3% for Germany). He thinks Germany will ultimately have to be Italy’s saviour, and that will cost a lot of money.

China-Iran train 

SILK ROAD

On the right track?

The first train to travel between China and Iran arrived in Tehran in mid-February, thus reviving the ancient Silk Road trade route, reports ABC.net.

In January, China and Iran agreed to establish economic ties worth up to US$600 billion over the next 10 years. China already accounts for a third of Iran’s foreign trade.

The train, loaded with Chinese goods, took 14 days to complete the 9,500-km trek — 30 days less than it takes to transport goods by sea from Shanghai to the port city of Bandar Abbas.

“Eurasia is an idea whose time, it is said, has come around again,” wrote Robert Skidelsky, professor emeritus at Warwick University, in a June 2015 column in The Guardian. “As China’s labour costs rise, production is being relocated ... to the western provinces. The natural outlet for this production is along the New Silk Road.”

About the Author

Yan Barcelo


Yan Barcelo is a journalist in Montreal.

comments powered by Disqus

Highlights

Gain practical organizational insights and learn from industry experts at this annual event for not-for-profit financial leaders.

Our Firm Directory allows you to search for Canadian CPA firms using our interactive map as well as other criteria.