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dad norman macrae died of cancer june 2010- his obituaries- his last article dec 2008 on the sad consequences subprime would trap youth in - coming notes on remembrance parties across the globe- on his 10th parting we are also zoom-remembering- rsvp chris.macrae@yahoo.co.uk.. | next only to education/health/safety, change in banking immediately changes lives of families and generations whereas infrastructure and natural resources multiply national impacts over time- financial services have at least 3 segments - how its designed for people, for big organisations, for pensions ang government since 1950, in developed countries - quarter of humans) changes in tech have caused changes in finance first- some peoples have leaped into banking consider those most linked to developed west, development of china region, rest of developing world- we will map what happened to innovation of tech to the west which has had access to 4 tech revolutions from 1950 rural, space-communications, engineering , computing brain power- china that had access to rural revolution in 1970s, engineering from 1980s, all tech from about 2005, and bangladesh which accesses rural change from 1970, has for most of its people not yet accessed engineering change, has joined in other tech between 1995-2005 thanks to being the epicentre of ngo sdg economy - epicentre fazle abed- of course in a world of 200 nations there are other hybrid models but decide which if any of these three is one your peoples need to understand first because big data collection has gone global - see society 5.0 and osaka track g20 2019 key system transformations -paper non-digital banking operations, digital operations, consumer digital atm and cards and end of community banking. mobilising change in commerce and banking, integrating all post 1950 tech revolution- finance needed to be a future affair that teachers and students questioned before youth began livelihoods- since 1760 alumni of adam smith and james watt glasgow u birth of industrial revolution have recommended mediating these questions openly - how much of wealth and natural resources do the top 10 and 500 people control- is your society one in which 3 halves of people - women youth and poor each have less than 10% voice in the future of their generation putting our species at risk- wall streets bankers and washington lobbyists and careless media moguls did the worst job ever at end of 2000s- can ny's biggest fund managers return the planet to all families as we enter 2020s - search worldrecordjobs -biggest marketmakers bezos and ma - then join us at economishealth.com -or help us value goal of worlds biggest -search - google versus microsoft; health&safety investor bloomberg vs soros; largest funds fink versus mitsubishi ; education for all schwarzman versus hongkong-singapore partners -supercity adaptability ban ki-moon versus masa-son; big decision makers events schwab vs guterres; rural villages fazle abed partners we also thank the baltimore branch of www.chinacybercenter.com for sharing its investigative scholars of everything that's crazy about 21st financial services that thurgood marshall wouldn't have let rip chris.macrae@yahoo.co.uk this economics policy series shows how banking in america has been serially designed to tip off the poor and the young - and even when the rich elders mess up they demand the poor and young bail them out- i now see why my father as early as 1980s described macroeconomics as totally fame political chicanery nothing to do with the origins system designs of the first 200 years of followers of adam smith moral sentiments- see also economistscotland.com | ![]() |
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Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) often serve as a bridge between low-income communities, economic resources, and access to capital. This is all the more evident and important following the events of 2020 with corporations, philanthropists, and government institutions further recognizing the power of these community lenders to accelerate a much-needed economic recovery. For well over 25 years, CDFIs and MDIs have reached communities who have been historically excluded from the financial mainstream – and today, they are reaching those who are struggling to survive financially during the COVID-19 pandemic. With unprecedented financial support in 2020, including $12 billion in federal aid through the Cares Act, the CDFI industry will be at the forefront of the much-needed work to address the issues of economic equity and inclusion that have stymied community and small business growth especially in Black, Latino, and Native American communities across the US.
There is more work still to be done. In this virtual event, leaders will identify ways to deploy more capital, build innovative products and services, and educate investors and borrowers alike. These actions will support the CDFI industry so that it can continue to make meaningful strides to close America’s longest-standing wealth and opportunity gaps while powering an inclusive economic recovery.
Featuring
China just showed the billionaire who’s boss in derailing fintech giant Ant Group’s monster IPO. Regulators might do better to heed his words instead.
Jack Ma is a very busy man.
China’s richest man has been busy launching the world’s biggest IPO. He has been busy preparing for Alibaba Group Holding Ltd.’s grandest four-day Double Eleven shopping extravaganza. And yet two weeks ago, Ma somehow found the time to opine on China’s banking system at a high-profile financial forum in Shanghai, once again throwing himself into the eye of the storm.
In that speech, apart from labeling the global banking Basel Accords as an “old people’s club,” Ma said “systemic risk” is not the issue in China. Rather, China’s biggest risk is that it “lacks a financial ecosystem.” Chinese banks are like “pawn shops”, where collateral and guarantees are the hard currencies. As a result, some decided to go so big they are not allowed to fail. “As the Chinese like to say, if you borrow 100,000 yuan from the bank, you are a bit scared; if you borrow a million yuan, both you and the bank are a little nervous; but if you take a 1 billion yuan loan, you are not scared at all, the bank is,” Ma said.
What Ma said was a bit sensational, perhaps. But he was right. China’s bankers are so averse to extending credit to smaller borrowers that Beijing redefined “inclusive financing” to make its banks’ loan books look prettier. In fact, it’s been so difficult for small businesses to obtain bank credit in the last decade that they have become hard wired not to invest for the future. Here’s the latest tidbit of evidence: In the third quarter, even as China’s economy recovered and 86% of 300 smaller manufacturers CLSA spoke to became profitable, most remained wary. A record-breaking 59% of their capital expenses went into mere “regular maintenance,” the brokerage found.
Ma’s words were blunt, but these phrases, such as “pawn shops,” are not his concoctions. Bureaucrats at the People’s Bank of China, for instance, had used the same words themselves. So why is Ma being singled out?
Could it be that Ant is too profitable and is now being targeted? Ant is raising at least $34.5 billion in an IPO that attracted more than $3 trillion of retail orders. Meanwhile, regional banks are still in the doghouse, struggling and sometimes being restructured because they lack capital buffers.
In the fast-growing consumer credit business, Ant is essentially a matchmaker while banks lend and put aside cash in case some loans go sour. Fintech giants are making much more than lenders, city commercial banks complained to local media.
Ant’s vast consumer base appreciates its small loan offerings. But going forward, to appease its banks, Beijing may want to level the regulatory playing field. For instance, Ant may no longer operate just as a matchmaker and might be asked to keep 30% of the loans on its balance sheet, compared with only about 2% now. That should have been no problem because Ant’s IPO would have brought in billions of dollars of capital for loan provisions.
In its statement, the Shanghai exchange cited the changing regulatory landscape as one reason Ant no longer qualified for a listing. But in reality, nothing has changed. Since 2017, Beijing’s watchdogs have been debating whether to allow online micro lenders to take a simple loan facilitation model or require them to put away loan provisions. This new draft rule is just a continuation of the debate.
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At the opening of his speech, Ma admitted he was conflicted as to whether to attend the forum and speak up. Now he probably regrets it. But here’s the thing: If China is serious about financial innovation, “inclusive financing” or the digital yuan, let the man who pioneered the business and made billions along the way share his experiences and thoughts. If Ma says systemic risk is not China’s Achilles’ heel, hear him out. He knows where the real problem is and could be part of the solution.
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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Shuli Ren at sren38@bloomberg.net
To contact the editor responsible for this story:
Beth Williams at bewilliams@bloomberg.net
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