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WASHINGTON — Governments and central banks need to collaborate on developing regulations for crypto-assets to prevent them from becoming a new vehicle for money laundering and terrorist financing, International Monetary Fund (IMF) Managing Director Christine Lagarde said.

In a blog posting ahead of a meeting of Group of 20 finance leaders next week, Lagarde said the technology behind crypto-currencies, including blockchain, offer exciting advancements that could power financial inclusion. New, low-cost payment methods could empower millions of people in low-income countries who lack traditional bank accounts.

“Before we get there, however, we should take a step back and understand the peril that comes along with the promise,” Lagarde said, adding that their appeal also makes them dangerous.

“These digital offerings are typically built in a decentralised way and without the need for a central bank. This gives crypto-asset transactions an element of anonymity, much like cash transactions,” she said. “The result is a potentially major new vehicle for money laundering and the financing of terrorism.”

Before the July 2017 shutdown of dark web marketplace AlphaBay, some $1 billion worth of illegal drugs, hacking tools, firearms and toxic chemicals were sold through crypto-assets on the exchange, she said.

Some early efforts are encouraging, including those led by the Financial Stability Board to study fintech advancements and by the Financial Action Task Force to provide guidance on electronic money laundering.

She said the IMF was focused on encouraging countries to develop policies that ensure financial integrity and protect consumers in crypto-assets in much the same manner as it has done for the traditional financial sector.

She also said technology behind crypto assets can be used to “fight fire with fire”, including distributed ledger technology that speed up information sharing between market participants and regulators. This can be used to create registries of standard, verified customer information and help fight cross-border tax evasion, she said.

Regulators can also use biometrics, artificial intelligence and cryptography to enhance digital security and identify suspicious transactions “in close to real time”, Lagarde added.

Applying the same securities rules to crypto assets as standard securities also can help increase transparency and alert buyers to potential risks.

“To be truly effective, all these efforts require close international cooperation. Since crypto-assets know no borders, the framework to regulate them must be global as well,” Lagarde said. 

The G-20 major economies will explore regulation of crypto-assets this year, including at a meeting next week in Buenos Aires for G-20 finance ministers and central bank governors. 

LONDON — Equity markets drifted lower on Monday as profit-taking cut short a rally sparked by solid US jobs data and optimism about the prospect of a US-North Korean summit meeting. Dealers said underlying sentiment remained upbeat but many investors, lacking fresh impetus to keep buying stocks, consolidated their positions.

"US stocks are mixed on the heels of last week's sharp rally that came courtesy of Friday's upbeat labour report, thawed geopolitical concerns and eased global trade uneasiness," analysts at the Charles Schwab brokerage said.

The US trend reversal in turn weighed on European stocks which came off their session highs towards the closing bell.

Frankfurt's DAX index, however, outperformed its peers after energy giant E.ON announced plans to take over Innogy, the renewables subsidiary of competitor RWE, in a deal valued at around 20 billion euros.

The deal fuelled a rally of shares in the companies involved, with E.ON shares up by more than 4 per cent in closing trade, and RWE stock just over nine percent higher. 

'Best of both worlds' 

Worldwide, investors were cheered by US Labour Department data that showed employers added a forecast-busting 313,000 jobs in February.

The closely-watched monthly report also revealed moderating wage growth compared with the January report, mitigating concerns the Federal Reserve will speed its pace of interest rate hikes.

"The best of both worlds for equity markets, with the economy in full swing but nary a sign of wage inflation," said Stephen Innes, head of Asia-Pacific trade at OANDA. 

"It doesn't get much better than that for investors and at least for now has dampened the inflationary fears that weighed on investor sentiment in February."

LONDON — Even though more people now use cards, mobile phones or even facial recognition technology to pay street performers, buy pizza or donate to church on Sundays, hard cash is showing no signs of dying out, central bankers said.

The Bank for International Settlements (BIS) said cryptocurrencies and the debate around them — such as whether cash will be replaced by virtual substitutes — are part of a broader debate about the nature of money.

The payments sector has argued that the use of cash is falling and therefore they do not need to provide as many ATM machines or bank branches.

But in the BIS' latest quarterly review, researchers took a closer look at whether cash is becoming a relic of the past as some claim.

"Some of the breathless commentary gives the impression that cash in the form of traditional notes and coins is going out of fashion fast," said Hyun Song Shin, BIS economic adviser and head of research said.

"Despite all the technological improvements in payments in recent years, the use of good old-fashioned cash is still rising in most, though not all, advanced and emerging
market economies."

Cash in circulation has actually risen in recent years, from 7 per cent of GDP in 2000 to 9 per cent in 2016, although it has fallen in Sweden and a few other places.

“The resilience of cash as a social institution reminds us of the importance of understanding the economic functions of money, beyond just the innovations in technology," Shin said.

Still, debit and credit card payments are rising as well, from 13 per cent of GDP in 2000 to 25 per cent in 2016. People hold more cards and are using them for more and smaller transactions, Shin said.

LONDON — British Finance Minister Philip Hammond said on Sunday he might be able to relax his grip on public spending at the end of this year, but he stuck to his plan to cut the country's high debt levels.

Britain's budget deficit has probably fallen to about 2 per cent of annual economic output in the current financial year, which would be its lowest since 2002 and way down from the 10 per cent it reached in 2010, when many government departments began cutting spending sharply.

"There is light at the end of the tunnel because what we are about to see is debt starting to fall after it's been growing for 17 continuous years," Hammond told BBC television ahead of a half-yearly update on the public finances on Tuesday.

"That is a very important moment for us. But we are still in the tunnel at the moment. We have to get debt down."

Faced with uncertainty about what leaving the European Union will mean for the world's sixth-biggest economy and frustration among voters who have coped with eight years of austerity, Hammond has already pushed back a target of wiping out the deficit into the mid-2020s. 

He came up with extra spending in a budget plan in November.

But he remains under pressure from the opposition Labour Party and some lawmakers in his Conservative Party to spend more on the over-stretched state health system and other services.

Labour's finance spokesman John McDonnell said Hammond's performance was nothing to celebrate.

"Last year, we had the lowest economic growth in the G-7 countries," he said on Sunday. "Wages are below what they were in 2007-2008, before the banking crisis."

He said managers in the health service, school head teachers and local government official were bearing the brunt of the Conservatives' economic policies, and up to 11 million people would be hit next month by cuts in benefits. 

Stressing the limits on his room for manoeuvre, Hammond told the BBC it was not clear that recent improvements in Britain's economy — such as a pickup in weak productivity growth — represented a long-term change. 

"We need to look at what is happening sustainably in the economy," he said.

"But if there is the flexibility, the space to do something, then we will decide in the autumn how to do that," he said, adding the government would continue to balance the need for investment against the push to bring down debt.

Britain's overall public sector net debt totalled 1.7 trillion pounds in January, 84 per cent of gross domestic product and more than double its level before the financial crisis. Hammond says that restricted Britain's ability to respond to future economic shocks.

Hammond confirmed he plans no new tax or spending measures in Tuesday's budget statement which will be largely a low-key update of economic forecasts. He is also due to launch some policy reviews.

BEIJING — State-controlled China Huarong Asset Management Co. has bought a 36.2 percent stake in the unit of CEFC China Energy through which CEFC is acquiring a $9.1 billion stake in Russia's Rosneft, a filing by the CEFC unit showed.

Huarong acquired the stake in CEFC Hainan International in two tranches, in December and in February, according to a filing on February 13 by CEFC Hainan at an online portal run by the State Administration for Industry & Commerce (SAIC).

CEFC subsidiary CEFC Shanghai International Group Co. owns the remaining 63.8 percent in CEFC Hainan. 

Huarong made the stake purchase through its unit, Huarong Ruitong Equity Investment Management Co.

It was not immediately clear how much Huarong paid for the stake, but the filing showed CEFC Hainan's registered capital expanded by 9.6 billion yuan ($1.5 billion) as a result of Huarong Ruitong's fund injection.

Huarong Ruitong and CEFC did not immediately comment. 

Chinese financial publication Caixin, in a story published late Friday, quoted an unnamed China Huarong official as saying the firm did not purchase the stake and instead was ordered to conduct a debt-for-equity swap by the government. 

China Huarong could not immediately be reached for comment. 

Reuters and other Chinese and international media reported last week that Ye Jianming, the chairman and founder of privately owned CEFC, had been investigated for suspected economic crimes.

CEFC subsequently denied this and said operations were normal.

In just a few years, CEFC has transformed from a niche fuel trader into a rapidly growing oil and finance conglomerate, with assets across the world and an ambition to become one of China's energy giants. It agreed in September to buy a 14.16 per cent stake in Rosneft for $9.1 billion.

Huarong Ruitong, responsible for fundraising, project selection, debt acquisition and equity management for Huarong's debt-for-equity swap deals, planned to raise a 50 billion yuan investment fund for deals, Huarong said in early 2017.

NEW YORK - Bitcoin dropped below $9,000 on Friday to its lowest level in 3-1/2 weeks on concerns about regulatory clamp down around the world following cases of large thefts of digital currencies.

At 8:24 a.m. (1324 GMT), the biggest and best-known virtual currency was last quoted down 4.19 percent at $8,880.10 on Luxembourg-based Bitstamp exchange.

PARIS — French President Emmanuel Macron on Thursday marked International Women’s Day with a pledge to “name and shame” companies that pay women less than men for the same work.

On a visit to a Paris-based property management firm hailed as a model of gender equality, he announced plans to “drastically” increase inspections of companies to ensure they complied with a law requiring equal pay for equal work.

“We will put in place a ‹name and shame’ system to make public [the names of] companies that least respect the law,” said Macron, who has made tackling sexism a key priority.

“No one wants to be bottom of the class on this issue,” he said.

The World Economic Forum last year ranked France 11th out of 144 countries for gender equality but a dismal 129th for wage equality for similar work.

On Wednesday, Prime Minister Edouard Philippe announced plans to get tough on companies that pay women less.

Under a package of workplace reforms to be finalised next month, wage screening software will be rolled out in all companies with more than 250 employees from 2019, and in all companies with over 50 employees by 2022, Philippe said.

Companies found to have “unjustified” disparities will have three years to rectify the situation or face fines of up to 1 per cent of their wage bill, Philippe said.

Men pay more

Sexism and violence against women — brought into sharp relief by the #Metoo campaign launched after the Harvey Weinstein scandal — dominated the headlines in France on Thursday.

Male readers of leftwing daily Liberation were asked to pay 25 per cent more for their paper for the day, the proportion by which French women are underpaid compared to men, according to official statistics.

For the same job, women are paid on average nine percent less.

Liberation published two editions Thursday with different cover pages, one marked “for women, 2 euros, normal price” with a symbol of a woman, the other marked “for men, 2.50 euros” with a symbol of a man.

The paper said it was inspired by Canadian monthly Maclean’s, which charged men more for its March edition to denounce the gender wage gap.

But not everyone was on board with the operation.

A vendor at a newsstand in central Paris told AFP he had sold only one copy of the paper — a “female” version he sold to a regular male customer who plucked it off the stand and pressed the standard 2 euros in his hand.

LONDON — Europe and the International Monetary Fund (IMF) urged Donald Trump on Wednesday to step back from the brink of a trade war, after the resignation of his top economic adviser emboldened those encouraging him to push ahead with tariffs on imported steel and aluminium.

The departure of Gary Cohn, seen as a bulwark against Trump's economic nationalism, hit shares, oil and the dollar on Wednesday, as investors saw an increased likelihood of tit-for-tat trade measures that would depress global growth. 

Trump plans to impose a duty of 25 per cent on steel and 10 per cent on aluminium to counter cheap imports, especially from China, that he says undermine US industry and jobs. 

But the move risks retaliatory measures against US exports and further complicates efforts to save the North American Free Trade Area (NAFTA).

"In a so-called trade war... nobody wins, one generally finds losers on both sides," IMF chief Christine Lagarde said on Wednesday.

The IMF head said Canada — the largest supplier of steel and aluminium to the United States — and Europe — whose car exports Trump has threatened to target — are both likely to impose retaliatory tariffs on US goods.

"If world trade were jeopardised by such measures, they would become a vector for lower growth and a slowdown of commerce. The impact on growth would be a formidable," Lagarde said.

On Tuesday Trump appeared ready for a trade war.

"When we're behind on every single country, trade wars aren't so bad," he said at a news conference with Swedish Prime Minister Stefan Lofven who responded by saying: "I am convinced that increased tariffs hurt us all in the long run."

The European Union has drawn up a list of US products — from bourbon to Harley Davidson motorbikes — on which to apply tariffs if Trump goes ahead.

"A trade war has no winners and if it does not happen, for the better, then we can work with our American friends and other allies on the core issue of this problem, overcapacity," European Commissioner for Trade Cecilia Malmstrom said.

"But if it does happen, we will have to take measures to protect European jobs," she added, after a meeting in Brussels to discuss the retaliation strategy.

For those who fear a trade war, the candidates to replace Cohn as Trump's adviser do not bode well: Peter Navarro, the White House National Trade Council head who wrote a book called "Death by China: Confronting the Dragon — A Global Call to Action", and conservative commentator Larry Kudlow.

German Economy Minister Brigitte Zypries said: "I hope Trump changes his mind ... It's very important that there are advocates for this in the White House. That's why I'm worried about the latest signals coming from the USA."

Britain, keen to foster global trade relations as it prepares to leave the EU, said it was "very disappointed" by Trump's plan. 

BRUSSELS - The European Union on Wednesday offered Britain a free trade agreement for their post-Brexit relationship that fell well short of ambitions set out by Prime Minister Theresa May last week, notably for the key financial sector.

A draft position of the remaining 27 EU members said the bloc was determined to foster a close partnership with Britain, but its depth would be limited by Britain’s own wish to leave the EU’s single market and customs union.

“Because of Brexit, we will be drifting apart,” the chairman of EU leaders Donald Tusk told a news conference, delivering a message that contrasted sharply with May’s call for future trade to be “frictionless as possible”.

“In fact, this will be the first free-trade agreement in history that loosens economic ties instead of strengthening them. Our agreement will not make trade between the UK and the EU frictionless or smoother. It will make it more complicated and costly than today for all of us,” he said.

Crucially, the bloc said Britain would be treated like any other third country when it came to financial services - which London had pressed to be included in a future free-trade deal.

Financial services generate more than 10 percent of Britain’s output and are the only area in which Britain has a trade surplus with the EU, making London very keen to preserve its banks’ current access to continental Europe.

But the text said in the future, Britain’s financial firms would only be allowed to operate in the EU “under host state rules” and be treated according to “the fact that the UK will become a third country and the Union and the UK will no longer share a common regulatory, supervisory, enforcement and judiciary framework.”

LIMITED ACCESS FOR BANKS

British finance minister Philip Hammond will say later on Wednesday that the EU must drop its tough stance and allow Britain’s giant financial services sector to be part of a post-Brexit trade deal, according to speech extracts.

Hammond will argue that Brussels originally aimed to include financial services in a free trade deal with Canada which in the end failed to provide much new access for banks. The EU had also wanted to include the sector in now-stalled trade talks with the United States.

In the end, the “CETA” EU-Canada trade deal has only a minimal section on financial services. If a Canadian financial firm wants to do business in the EU it must set up a presence inside the bloc and comply with EU regulations.

The draft EU guidelines, which will be worked on by EU diplomats to be approved by the bloc’s 27 national leaders in late March, say services will indeed be part of the deal, but spell out clear limits of what can be on offer.

“Such an agreement cannot offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof,” the text read.

“Like other free trade agreements, it (the trade agreement) should address services,” Tusk said. “(But) No Member State is free to pick only those sectors of the Single Market it likes, nor to accept the role of the ECJ only when it suits their interest,” he said.

“By the same token, a pick-and-mix approach for a non-member state is out of the question. We are not going to sacrifice these principles. It’s simply not in our interest,” he said.

Last December the Bank of England proposed allowing EU banks in Britain to continue as branches in London after Brexit – on condition of some form of reciprocity from Brussels – to avoid lenders having to find extra capital to become fully fledged subsidiaries.

Instead, the EU proposal sticks with the bloc’s traditional approach to dealing with banks from non-EU or third countries.

“This means double regulation. You operate in London under UK rules and some elements would be under their rules for cross-border services,” Barney Reynolds, a partner at law firm Shearman & Sterling said.

TOKYO — Tokyo stocks opened sharply higher on Tuesday after four days of losses, boosted by a rebound on Wall Street and the yen’s fall against the dollar.

The benchmark Nikkei 225 index rose 1.92 per cent or 403.32 points to 21,445.41 in early trade while the broader Topix index was up 1.60 per cent or 27.15 points at 1,721.94.

“Buybacks are expected to lead following a sharp rebound in US stocks and a breather in the yen’s strength,” Yoshihiro Ito, chief strategist at Okasan Online Securities said in a commentary.

All three major indices on Wall Street rose on Monday, with investors seemingly persuaded President Donald Trump’s recent threats to launch a trade war were actually a bargaining tactic.

The president on Monday indicated he might consider exempting Canada and Mexico from steel and aluminium import tariffs if he likes the outcome of pending trade talks.

The yen fell with the dollar trading at 106.36 yen on Tuesday against 106.18 yen in New York on Monday afternoon and the 105-yen range in Tokyo earlier.

A lower yen is positive for Japanese exporters as it makes exported goods cheaper and inflates overseas profits when repatriated.

Carmakers were broadly higher. Honda jumped 2.77 per cent to 3,709 yen and Toyota rose 2.05 per cent to 6,954 yen.

Steelmakers also bounced back with Nippon Steel and Sumitomo Metal rising 2.06 per cent to 2,425.5 yen.

Kobe Steel was up 0.72 per cent at 1,117 yen after media reports said its Chief Executive Hiroya Kawasaki would step down to take responsibility for a quality data-faking scandal.