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China’s pledge to cut project finance is the new normal for coal

Australia and Indonesia are the world’s biggest coal exporters. They are now facing an accelerated decline in the global demand for their coal shipments. This is after China said that they would stop building coal-fired power plants overseas. Chinese President Xi Jinping announced their new move at the United Nations General Assembly. This has prompted many environmental campaigners to predict a direct impact on major coal exporters.

Beijing’s pledge is the latest blow for Australian and Indonesian coal miners. Because more energy systems globally make the shift to renewables. Pandu Sjahrir, chairman of Indonesia Coal Miners Association, when asked whether coal miners must accept that global demand may have peaked, said that he thinks it is the new normal. More than a decade, Australia and Indonesia have been the dominant global coal exporters. More than half of all coal shipments have been covered by them both. They also export more coal than they consume. Australia ships out more than 75% of its coal and Indonesia exports 60% of production.

Julien Vincent, executive director at environmental group Market Forces said that Australia’s coal industry has been gambling on increasing coal-fired power generation in developing countries to replace declining long-term demand in places like Japan, South Korea and Taiwan. Consultants Wood Mackenzie said China’s pledge to stop financing new coal-fired plants abroad puts at risk 29 gigawatts of coal-fired plants. Rystad vice president Xi Nan said that as per this announcement, the decline from 2025 onwards will be slightly steeper than previously expected. Yancoal Australia Ltd is the Australia’s largest pure-play coal producer and leading thermal coal exporter.

They stated that they are expecting continuous demand for coal across Asia. A spokesperson from there stated that Australia will continue to play a critical role as a primary source of premium grade metallurgical and thermal coal. The Minerals Council of Australia (MCA) said that the governments and industry in Asia should step up efforts to cut emissions through measures like carbon capture. MCA Chief Executive Tania Constable said that more of this is what’s needed to both reduce emissions and continue to allow countries a full suite of energy options for their development.

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LexisNexis risk solutions study reveals sharp rise of financial crime compliance costs

Decision makers inside banks, investment firms, asset managers and insurance firms identify the drivers impacting financial crime compliance. LexisNexis® Risk Solutions revealed that the results of its annual True Cost of Financial Crime Compliance Study for the U.S. and Canada. The total projected cost of financial crime compliance for the region is approximately $49.9 billion. The survey illustrates the sharp increase in financial crime compliance costs.

The study projects the average annual cost of financial crime compliance for U.S. financial institutions with $10 billion. Pandemic Continues to Spur Growth. The pandemic continues to negatively impact compliance operations. Sixty eight percent of U.S. respondents report longer times required to complete due diligence. Fifty five percent of U.S. respondents report reduced productivity compared.

More U.S. financial institutions now rank real estate and hospitality as top money laundering risk segments. Crime involving digital payments, trade-based money laundering and money mule schemes are on the rise. Digital currency is a growing problem for Canadian firms. Crimes involving digital payments have the greatest impact on compliance costs. Cryptocurrency crimes have the greatest impact on compliance costs for Canadian firms. The survey results demonstrate that financial institutions are battling a broader set of issues.

Survey respondents indicate that a lack of current and extensive data tops the list of Know Your Customer (KYC). Leslie Bailey, vice president of financial crime compliance strategy for LexisNexis Risk Solutions stated that the study shows clear linkages between the pandemic, digital crime and increasing regulations. Hence, financial institutions need to prepare for expanded compliance obligations and risks from emerging financial crime. Bailey added that digital transformation is a game-changer for financial crime compliance operations.

This will require a sophisticated approach that incorporates insight into digital behaviors. This study surveyed 145 decision-makers in the U.S. and Canada. Responses were collected in June 2019, August 2020 and June 2021. Organizations such as banks, investment firms, asset management firms and insurance firms. The total annual cost of compliance across firms was calculated using survey data. The spend amount was generated by multiplying the average percent allocated to financial crime costs.

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COP26 delegates agree on need to deliver on $100 BLN climate finance pledge

Delegates heading to the COP26 U.N. climate summit in Glasgow. These delegates agreed that they must deliver on the $100 billion per year pledge. COP26 president Alok Sharma said that, it is to help most vulnerable nations for tackling the climate change.

After many days of meetings at the pre-COP26 climate event, which happened in Italy, Sharma said that there was a consensus to do more. Which is to keep the 1.5 degrees Celsius target within reach, adding more needed to be done collectively in terms of national climate plans.

The COP26 conference in Glasgow aims to secure more ambitious climate action. This is from nearly 200 countries, those all that have signed the 2015 Paris Agreement for limiting the global warming, well below 2.0 degrees Celsius. And to 1.5 degrees, above pre-industrial levels.

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City’s exposure to Evergrande is very minimal-Hong Kong finance Chief

Hong Kong’s exposure to debt-laden developer China Evergrande Group is very minimal at 0.05%. This is of banking assets, South China Morning Post reported, citing the city’s finance minister. Financial Secretary Paul Chan told the newspaper that it is very minimal and won’t cause them any systemic risks. He added that he had arrived at the conclusion after a recent audit of the local banking sector’s exposure to the company.

Chan also said that the Hong Kong’s stock market was inevitably subject to some volatility. This is amidst a recent mainland crackdown on some industries. But still he believed any setback would be temporary. With liabilities of $305 billion, Evergrande has sparked concerns its cash crunch could spread through China’s financial system. This may reverberate globally and that is a worry that has eased with the Chinese central bank’s vow, to protect homebuyers’ interests. Evergrande has missed two bond interest payments. Bondholders have said this and its offshore debt, amounting to about $20 billion, trades at distressed levels.

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