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Home » Daily Briefing » Daily briefing - 07 March 2019

Daily briefing - 07 March 2019

NASA/Goddard Space Flight Center, Splette

Italexit? EU mandarins (yes, we jest) are feeling queasy this morning as Britain inches down the diving board and other bits of the EU suddenly look less secure. It's the great merchant princes of Italy that are often credited with inventing modern banking, flush with wealth from trading across the Silk Road that once ran from Venice to Xi'an in central China. Modern Italy has been a US protectorate, but like Greece and the other peripheral countries of the EU, it suffered badly during the financial crisis and has never fully recovered. So when Chinese officials and companies came calling with an offer to revive the historical trade associations, Italians decided to entertain them, despite the fact that the EU is trying to hang together as a bloc while Britain extricates itself from modern supply chains. The reaction of the United States is telling: "The Financial Times reported on Wednesday that the United States was irritated by the prospect of Italy joining the BRI, and had warned the project could significantly damage Rome's international image," writes Reuters. "We view BRI as a 'made by China, for China' initiative," the newspaper quoted Garrett Marquis, White House National Security Council spokesperson, as saying. But Italy can hardly say no. Greece has welcomed huge infrastructure investment in its ports in recent years as Chinese companies built up Piraeus and laid out thousands of kilometres of new and upgraded rail through the Balkans. Italy is already enormously popular with Chinese tourists.

Building that Belt and Road Initiative on the ground is one thing, but China's independent players such as Huawei are now ironically being forced into acting as proxies. Chinese champion Huawei is not accepting the US ban lightly. "Guo Ping confirmed to reporters in Shenzhen on Thursday that the company had filed a lawsuit against the US government in the District Court for the Eastern District of Texas against the 'unconstitutional' restrictions, which were enacted last year as part of the annual US National Defense Authorisation Act (NDAA). 'In enacting the NDAA, Congress acted unconstitutionally as judge, jury and executioner,' said Guo Ping, one of Huawei's rotating chairmen." Huawei's VP Wanzhou Meng is currently under house arrest in Canada and is about to be extradited to the US to face charges that Huawie violated sanctions by trading with Iran.

Raisin started as a novel but simple idea: offer Europeans the best savings account rates on offer across all of Europe. That idea has proven popular, with Raisin able to offer its service as a plug-in on other fintech and banking platforms such as Starling Bank and N26. Following in the footsteps of Klarna, Raisin is inverting itself and buying out its banking partner, Frankfurt-based MHB Bank. "We know the business models and challenges of both sides, fintech and bank," said MHB Bank Chairman Reiner Guthier. "Through this more extensive collaboration with Raisin we will be able to add to our technical expertise along with making important investments in our team. These changes enable MHB even better to support the digital business models of our current partners as well as new ones. This move thus allows us to take the strengths of our current position in credit fronting and expand them further into payments and 'banking as a service'." With its German banking license, MHB is governed by the German deposit guarantee scheme and supervised by BaFin.

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