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International banking in a London outside the European Union

THEY hoped--and believed--it wouldn't happen. But now the world's biggest banks must brace themselves for Britain's departure from the European Union. Today bankers will simply be trying to weather the turmoil after yesterday's vote. But in the weeks and months to come they will have to decide whether Brexit means shifting business and jobs away from Europe's financial capital.



John Wheeler: Service to banking, service to city

Wheeler as a young man left Anniston to seek his degrees in banking, but came back to the Model City, back to his roots. Here, he "caught the kind of civic spirit that characterized Anniston from its founding," Brandt Ayers, chairman and publisher of The Star and a close friend of Wheeler's, said Friday.



YELLEN: A Brexit could shake global markets and have huge economic consequences

Federal Reserve Chairman Janet Yellen adjusts her glasses as she testifies on Capitol Hill in Washington, Tuesday, June 21, 2016, before the Senate Banking Committee. AP/Evan Vucci

Federal Reserve chair Janet Yellen spent Tuesday morning speaking before the Senate Banking Committee in the first of her two-day, semi-annual congressional testimony.

On the big issue dominating markets right now - Brexit - Yellen said a UK vote to leave the European Union could have significant economic repercussions, and create market volatility.

An exit from the EU could have a negative ripple effect on other economies in the region. Global markets rallied this week as polls showed the Remain camp gaining momentum.

Yellen didnt recommend which way the vote should swing on Thursday, saying the Fed will be watching the economic fallout closely.

In opening remarks, Yellen repeated that the Fed will be cautious in raising interest rates, even as it expects data on growth, employment and inflation to improve. The fallout from a Brexit is just one thing that could tarnish this outlook.
Samantha Lee/Business Insider

None of this was new, since it was the fourth time in only a few weeks that Yellen addressed markets.

The Feds latest monetary-policy report put stock-market valuations on watch, noting that forward price-to-earnings ratios are above the median level of the last three decades.

The Feds report also included a section on minority unemployment rates; during her last testimony, the Congressional Black Caucus grilled Yellen on how shes addressing black unemployment.

Yellen said Tuesday that its important to the Fed that employment gains are broad-based, and that its own internal hiring makes room for diversity.

Qamp;A

On a question about forward guidance, Yellen repeated that the Feds projections are not a commitment. Some critics have said the Fed lost credibility because the economy did not always evolve according to its forecasts.

Yellen countered an argument from Senator Bob Corker (R-Tennessee) that the Feds reinvestment of its bonds is effectively a fourth round of quantitative easing. To stoke money supply after the last financial crisis, the Fed embarked on several bond-buying rounds.

She said the Fed has the legal authority to use negative interest rates - another stimulative tool - but sees no need to use them in the US.

On Puerto Ricos debt crisis, Yellen said the Feds authority is extremely limited, and it wont be appropriate to grant loans.

US Sen. Elizabeth Warren (D-Massachusetts) asked whether the Fed would commit to enforcing consequences on the big banks if they fail to resolve problems identified in their living wills. Yellen declined to make a commitment, saying the Fed will consider the appropriate action if the October deadline is missed.

On Wednesday, Yellen will face the House Financial Services Committee.



Congress Just Says No—to Banking Services for Marijuana Businesses

Yet another attempt has failed to pass legislation shielding banks that provide services to marijuana-related businesses from regulatory action or other penalties. Late last week, the US House of Representatives appeared likely to approve an amendment to the House Financial Services and General Government appropriations bill (the Amendment) that would prevent financial institutions from being penalized if they provided services to state-sanctioned marijuana-related businesses. A similar amendment had already been approved by the Senate Appropriations Committee and appeared likely to be approved by the US Senate.

Under recently passed procedures, the House Committee on Rules must approve all amendments to appropriations bills. On June 20, Representative Denny Heck (D-WA) and Representative Ed Perlmutter (D-CO) filed the bipartisan Amendment with the Committee on Rules. They emphasized that, without banking services, marijuana businesses are forced to conduct business and pay salaries in cash, which increases the risk of money laundering and theft. The Committee on Rules declined to consider the Amendment for a vote, effectively blocking it from further consideration in connection with the appropriations bill.

The Amendment is the latest effort by members of Congress to bring some certainty to banks that wish to provide banking services for marijuana-related businesses. Although both the US Department of Justice and the Financial Crimes Enforcement Network have provided guidance that allows banks to provide services to legal marijuana businesses, marijuana is still illegal under federal law, and banks have been reluctant to rely on such guidance, which they generally have concluded provides insufficient regulatory and law enforcement certainty.

Although marijuana businesses that seek traditional banking services will not see any relief in the current appropriations process, a number of bills that have been introduced in the Senate and House remain that would offer clarity for banks that wish to offer banking services to marijuana businesses. Even though none of those bills have passed the initial stages of the legislative process, these efforts, which are generally bipartisan in nature, are expected to continue and may at some point be successful. In any event, the legal marijuana industry is expected to continue to grow, and more states are likely to authorize recreational and medical use of marijuana. Meanwhile, the issue of providing legal certainty to banks that wish to offer banking services to marijuana business will continue to be debated.



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