Capital One says it won't use CFTC waiver related to oil lending

WASHINGTON (Reuters) – U.S. lender Capital One Financial Corp (COF.N) said on Saturday it would not use a U.S. Commodity Futures Trading Commission (CFTC) waiver after commodity price volatility lifted the bank’s derivatives exposure toward a key regulatory threshold.

The exemption relieved the firm from a requirement to register as a “Major Swap Participant,” or MSP, even though its growing energy swaps exposure was expected to require that by the end of the next quarter. The CFTC had announced the relief for an unnamed lender two weeks ago, and Reuters later reported Capital One was the bank.

“We are not an MSP,” a spokesperson for the bank said in an emailed statement on Saturday.

The bank has “notified the CFTC that we will not rely on the waiver and will register if derivative volumes reach the MSP threshold.”

The registration is related to Capital One’s commercial lending to the oil and gas industry, a relatively small part of its overall business. The bank enters into commodity swaps with energy clients to help them mitigate the risk of energy price swings and the related borrowing risks.

While those trades typically do not bring the lender’s swaps exposure anywhere close to the CFTC’s registration threshold, a huge plunge in energy prices put it on track to hit the threshold by the end of the next quarter, the agency said in a letter on March 20.

The temporary waiver sparked worries that regulators are going too easy on banks in a bid to prop up lending, potentially exposing them to more risk down the road if energy prices do not rebound.

Following the 2007-2009 financial crisis during which several major institutions were toppled by their derivatives exposure, Congress created a slew of swap trading laws to reduce systemic risk and increase the visibility of the market.

Capital One’s commercial bank “does not engage in speculative derivatives trading” and its normal hedging activity has not changed, the bank spokesperson said on Saturday.

The bank enters into hedges with other banks to reduce exposure to commodity risk from its hedges with oil and gas clients, reducing exposure to commodity risk to “essentially zero, and we are subject to no outstanding margin calls,” the spokesperson said.

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Capital One says it won't use CFTC waiver related to its oil lending

WASHINGTON, April 4 (Reuters) – U.S. lender Capital One Financial Corp said on Saturday it will not use a waiver granted by the U.S. Commodity Futures Trading Commission (CFTC) after commodity price volatility lifted the bank’s derivatives exposure toward a key regulatory threshold.

The regulatory exemption relieved the firm from a requirement to register as a “Major Swap Participant”, or MSP, even though its growing energy swaps exposure was expected to require it to do so by the end of the next quarter. The CFTC had announced the relief for an unnamed lender two weeks ago, and Reuters later reported Capital One was the bank.

“We are not an MSP,” a spokesperson for the bank said in an emailed statement on Saturday. “To alleviate confusion, we are withdrawing our waiver request and will register as derivative volumes require.”

The registration is related to Capital One’s commercial lending to the oil and gas industry, a relatively small part of its overall business. The bank enters into commodity swaps with energy clients to help them mitigate the risk of energy price swings and the related borrowing risks.

While those trades typically do not bring the lender’s swaps exposure anywhere close to the CFTC’s registration threshold, a huge plunge in energy prices put it on track to hit the threshold by the end of the next quarter, the agency said in a letter on March 20.

The waiver was temporary, but sparked worries that regulators are going too easy on banks in a bid to prop up lending, potentially exposing them to more risk down the road if energy prices do not rebound.

Following the 2007-2009 financial crisis during which several major institutions were toppled by their derivatives exposure, Congress created a slew of swap trading laws to reduce systemic risk and increase the visibility of the market.

Capital One’s commercial bank “does not engage in speculative derivatives trading” and its normal hedging activity has not changed, the bank spokesperson said on Saturday.

The bank enters into hedges with banks to reduce exposure to commodity risk from its hedges with oil and gas clients, reducing exposure to commodity risk to “essentially zero, and we are subject to no outstanding margin calls,” she said. (Reporting by Chris Prentice Editing by Alistair Bell)

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UK PM Johnson's pregnant fiance had COVID-19 symptoms but on the mend

LONDON (Reuters) – Carrie Symonds, the pregnant fiance of British Prime Minister Boris Johnson, said she had spent the past week in bed with symptoms of the novel coronavirus but after seven days of rest felt stronger and was on the mend.

“I’ve spent the past week in bed with the main symptoms of Coronavirus. I haven’t needed to be tested and, after seven days of rest, I feel stronger and I’m on the mend,” Symonds said.

“Being pregnant with Covid-19 is obviously worrying. To other pregnant women, please do read and follow the most up to date guidance which I found to be very reassuring.”

Johnson said on Friday he was remaining in isolation with mild symptoms of COVID-19, including a raised temperature, seven days after he first tested positive for the new coronavirus which causes the respiratory disease.

Johnson, 55, and Symonds, now 32, announced in February that they were expecting their first child together and were engaged to be married.

After Johnson last month became the first leader of a major power to announce that he had tested positive, he went into isolation at a flat in Downing Street, though the couple normally live together.

Symonds is the first unmarried partner to live openly with a British leader in recent history.

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Trump says will ask Congress for more small business funds if money runs out

WASHINGTON (Reuters) – U.S. President Donald Trump said on Saturday he would ask Congress for more money to make loans to small businesses struggling with the economic fallout from the coronavirus outbreak if the original $349 billion allocated in a fiscal stimulus bill runs out.

“I will immediately ask Congress for more money to support small businesses under the @ppploan if the allocated money runs out,” Trump wrote in a post on Twitter.

The launch of the small business bailout fund has been rocky since it opened on Friday morning.

Tens of thousands of businesses have swamped lenders, community bankers have complained of an inability to access the Small Business Administration (SBA)’s system and the Treasury Department was still issuing updated guidance and form templates on Friday afternoon.

As of Friday evening, lenders originated more than 17,000 loans valued at about $5.4 billion under the program, Jovita Carranza, the administrator of the Small Business Administration, said in a tweet.

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UK extends condolences to family of 5-year-old who died from coronavirus

LONDON (Reuters) – British Cabinet Office Minister Michael Gove said his thoughts went out to the family of a 5-year-old child who died in hospital after being infected with the novel coronavirus.

The United Kingdom’s hospital death toll from the coronavirus rose by 20% to 4,313 at 1600 GMT on April 3, the health ministry said.

COVID-19 deaths in English hospitals made up 3,939 of the UK total. Those who made up the 637 daily rise in English deaths were aged between five years and 104 years old.

Of the 637, 40 had no known underlying health conditions. They were aged between 48 and 93 years old.

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Indian power grid operators scramble to prepare for Modi's 'lights off' plan

CHENNAI/MUMBAI (Reuters) – Prime Minister Narendra Modi’s appeal to citizens to switch off lights across India on Sunday to mark the coronavirus fight is generating a lot more work and some tough challenges for India’s power sector workers.

On Friday, Modi appealed to Indians to turn out their lights for nine minutes at 9 p.m. on Sunday to show solidarity amid the coronavirus lockdown with a show of lamps, candles and flashlights.

The appeal, however, set off alarm bells for those in charge of India’s power grid, prompting a flurry of orders to officials manning generation plants and managing grid load, amid concerns that a surge in voltage due to a steep dip in demand could harm the grid and cause widespread outages.

India’s Power System Operation Corp (POSOCO), which oversees the national power grid, ordered all senior officials to be present at generating stations, substations and load despatch centers across India between 6 p.m. and 10 p.m. on Sunday.

It advised engineers to start reducing output from baseload plants such as coal-fired power stations just ahead of 9 p.m. and ramp up generation from hydro and gas plants, typically used to address peak power demand, to manage the anticipated gyration in demand.

POSOCO expects consumption to dip by over 10% when Indians switch off lights, it said in an advisory sent to grid operators across the country, calling the expected reduction in load and rapid recovery, “unprecedented”.

POSOCO’s parent body, Power Grid Corp of India (PGRD.NS), asked regional electricity transmission center employees to be on “high alert,” as the lights out plan could “lead to outage of grid elements due to grid constraints”.

India’s Ministry of Power sought to allay concerns though, and said in a statement, “The Indian Electricity grid is robust and stable and adequate arrangements and protocols are in place to handle the variation in demand.”

Modi has ordered India’s 1.3 billion people indoors to avert a massive outbreak of coronavirus infections, but the world’s biggest shutdown has left millions without jobs and forced migrant workers to flee home to their villages.

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India’s power consumption has already plunged amid the lockdown to stem coronavirus cases – which rose to nearly 3,000 on Saturday. Some states are worried about the impact of the “lights off”.

Nitin Raut, the power minister of Maharashtra, a western state which consumes the most electricity in India, appealed to citizens to light lamps and candles, while keeping lights on to ensure proper functioning of the grid.

“Already the electricity demand and supply equation has been stretched,” said Raut, adding the possibility of grid failures “could not be ruled out.”

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Spanish hotel owner turns resort over to refugees during coronavirus crisis

MADRID (Reuters) – In a complex of holiday bungalows to the east of Madrid, Venezuelan refugees and homeless people have replaced the tourists, business meetings and wedding parties that usually fill the premises.

The owner of the La Ciguena resort has turned the facility over to some of Madrid’s most vulnerable families, after he had to close the hotel because of the coronavirus outbreak sweeping through Spain.

“Since we’ve arrived, they’ve attended to our every need,” said Stephanie Paez, an eight-month pregnant Venezuelan refugee accompanied by her partner and mother.

She said her aim was to find a job, an apartment and get her residency papers once the coronavirus crisis was over.

Spain is in strict lockdown as it battles one of the world’s worst coronavirus outbreaks. The country’s death toll has surpassed 11,000, second only to Italy. Bars, restaurants and shops selling non-essential items are closed.

The resort is housing 12 families with children, around 65 people, most of them Venezuelan refugees. Although the staff have been temporarily laid off while the complex is shut to paying visitors, they come in to help voluntarily.

Families receive breakfast, lunch and dinner and come to the dining room, which overlooks a lake, in a staggered schedule so they can keep a distance of two meters between people.

“We thought, ‘What can we do, we have to do something’ and it took one second to offer,” Miguel Angel Carnero, the manager of the La Ciguena resort, told Reuters.

“It’s a way to do our bit, to contribute during this pandemic” he said.

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African migrants in Morocco wait for aid as coronavirus bites

RABAT (Reuters) – Thousands of African migrants without revenue during Morocco’s coronavirus lockdown could run out of money for food and essentials, and rights groups have urged the government to offer them the same cash help it has promised to citizens.

The North African country has imposed a month-long lockdown restricting movement to purchases of food or medicine and to staffing some key jobs, with 761 cases of the coronavirus confirmed, including 47 deaths.

Saddou Habi, 30, who came to Morocco two years ago from Guinea, and decided to stay rather than trying to reach Europe after getting a job in a restaurant, said his money will run out in 10 days.

“I have been helping my four other flat mates whose financial situation is worse than mine,” he said.

“We are respecting all measures to stop the spread of the coronavirus but we need urgent help to go through these difficult times,” he said.

The government has promised monthly support of about $120 a month to households where the main provider has lost work in the informal economy because of the lockdown.

At present, that aid will go to people with a “free health service” card available only to Moroccans. The government plans to roll it out to people who do not have the card, but has not said if this would be extended to migrants.

The state will also pay about $200 a month to workers in private companies who are registered with the state social insurance scheme.

It leaves most of the 50,000 migrants who have obtained official residency permits since 2013 without help. The far larger number of undocumented migrants, many of them homeless or seeking to pass through Morocco to reach Europe, face even less chance of assistance.

The National Human Rights Council and the Moroccan Association for Human Rights have urged the government to help. The finance ministry did not respond when asked if migrants would become eligible for state aid.

‘WE HAVE TO SHOW SOLIDARITY’

Habi has applied for a residency permit, but is still waiting for it to be issued. He lives in the poor Hay Nahda district of Rabat, where houses made of bare concrete blocks press up against each other.

Local rights groups and charities have distributed food in poor districts to both Moroccans and migrants, but the lockdown has made it harder to distribute such supplies.

Living conditions are worst for homeless sub-Saharans in northern Morocco, near the Spanish enclaves of Ceuta and Melilla, which migrants often try to reach across a thicket of high wire fences.

The majority of migrants work in the informal sector earning barely enough money to meet their basic needs for a day, said Ousmane Ba, a Senegalese migrant who heads a community group.

The government needs to do more to shelter homeless migrants living in the forests in northern Morocco and help them avoid contagion, he added, speaking by phone from the city of Nador, near Melilla.

So far, the government has put more than 3,000 homeless people, including migrants, into shelters located in schools, stadiums and other buildings for the duration of the lockdown.

“We are all in the same boat in the face of the coronavirus storm. We have to show solidarity with one another for all to be rescued,” Ba said.

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UK ramps up coronavirus trials but results 'a few months away'

LONDON (Reuters) – Britain said on Friday it was launching the biggest clinical trial of possible treatments for coronavirus in the world but a leading health official cautioned that the results were likely a few months away.

Almost 1,000 patients from 132 hospitals had been recruited in 15 days and thousands more were expected to join in the coming weeks, the health department said.

The trial is testing medicines more commonly used to treat malaria and HIV, and is designed so that when further medicines are identified, they can be added to the study within days.

England’s Deputy Chief Medical Officer Jonathan Van-Tam said the next round of clinical trials should include new medicines, including those that might be in development for other diseases and might “have a role to play”.

But he was cautious on the timeline for results of the trials.

“I know that there’ll be a question about when are we going to get some results from these clinical trials, and my straight answer to you is: ‘I don’t know.’ I think it’s going to be a few months,” he told a news conference.

Health Minister Matt Hancock said that until possible treatments for COVID-19, the disease caused by the coronavirus, were shown to be effective, the only protection against it was to stay at home.

He said that so far clinical trials had been focused on repurposing existing drugs and steroids for treatment of COVID-19.

“We’ve also set up an expert therapeutics taskforce to search for and shortlist other candidate medicines for trials,” Hancock said.

“We need more patients to volunteer to be part of these trials because the bigger the trials, the better the data and the faster we can roll out the treatments, if – and only if -it’s proven to work.”

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UPDATE 2-Russia's central bank sees room for rate cut in coronavirus crisis

* Governor Nabiullina says rate cut possible in 2020

* Says lockdown to hit economy mostly in Q2

* Says unemployment rate seen rising

* Economists warn of deeper economic contraction

* Finance ministry mulls more borrowing – source (Adds details, quotes, background)

By Andrey Ostroukh, Elena Fabrichnaya and Darya Korsunskaya

MOSCOW, April 3 (Reuters) – Russia’s central bank sees scope for an interest rate cut in 2020 as it expects inflation to be subdued by the effects of the coronavirus pandemic, its Governor Elvira Nabiullina said on Friday.

The central bank’s actions are in sharp focus as Russia’s economy slides into recession, the rouble trades near four-year lows and social discontent mounts.

President Vladimir Putin heightened concerns on Thursday by prolonging a paid non-working period across Russia, which is expected to hammer small and medium businesses.

This means the economy and individual sectors will operate at about 55% of capacity in April, which may translate into a 4.2% annual contraction of growth in 2020, Citibank said.

Nabiullina said at the first weekly briefing about the measures to protect financial markets from the coronavirus crisis that the experience of other countries showed that a month of quarantine may cost up to 2% of gross domestic product.

Analysts polled by Reuters in late March predicted that recession will start in the second quarter.

Nabiullina declined to give specific economic forecasts but said unemployment will rise, while inflation is still below the 4% target and could be limited by weaker demand.

“If the situation develops in line with this scenario and financial markets are stable, we see some potential for lowering the key rate during 2020,” Nabiullina said.

The central bank’s next rate-setting meeting is due on April 24 and Sergey Konygin, chief economist at Gazprombank, said the first cut to the key rate, which is now 6%, is possible in June after the impact of the weak rouble filters into inflation.

Nabiullina said the central bank will ease regulatory requirements for Russian banks, which will see their profit shrink in 2020, and is also ready to provide liquidity.

Even though it has more than $550 billion in gold and forex reserves, Russia is looking for new funds as the country scales up its crisis response to the coronavirus pandemic. The finance ministry has reserved 1.4 trillion roubles to fight coronavirus.

The budget revenue shortfall may reach 4 trillion roubles this year if the average oil price is at $20 per barrel, and a half of the gap could be covered by the National Wealth Fund, a source familiar with the finance ministry plans told Reuters.

The rest, or between 1-2 trillion roubles, could be raised in the domestic market, the source said. The finance ministry did not reply to a request for comment.

Russian lawmakers this week approved the raising of state borrowing beyond budgeted limits. The finance ministry had planned to borrow 2.3 trillion roubles in OFZ rouble-denominated bonds. ($1 = 76.8435 roubles) (Additional reporting by Darya Korsunskaya, Gabrielle Tétrault-Farber, Maria Kiselyova, Elena Fabrichnya and Katya Golubkova; Writing by Andrey Ostroukh; Editing by Alexander Smith and Hugh Lawson)

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