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Federal Privacy Office Acted Like RBC’s PR Arm, Says Integrity Advocate

February 21, 2020

Federal Privacy Office Acted Like RBC’s PR Arm, Says Integrity Advocate

FOI reveals watchdog pushed media to change headline on story about investigation into bank.

Daniel-Therrien-privacy-commissioner.jpg
After various media outlets reported that federal Privacy Commissioner Daniel Therrien had told MPs that his office was investigating Facebook and RBC over possible misuse of personal data, the bank pushed back. Photo by Sean Kilpatrick, the Canadian Press.

Canada’s privacy watchdog moved to have news reports about its investigation of RBC and Facebook changed after the bank complained they were “problematic,” documents released under freedom of information legislation show.

The Tyee reported last February that Privacy Commissioner Daniel Therrien had told MPs that his office was investigating both Facebook and RBC over possible misuse of personal data.

“We received complaints from individuals on whether or not the Royal Bank was violating PIPEDA [Personal Information Protection and Electronic Documents Act] in some way in receiving information in that way,” Therrien told the parliamentary Standing Committee on Access to Information, Privacy and Ethics.

“So that question is the subject of a separate investigation.” 

The Tyee story was followed up by Bloomberg News reporter Doug Alexander, and the service distributed a report headlined “RBC Faces Canadian Privacy Investigation over Facebook Access.

RBC quickly complained to the privacy commissioner’s office about the story.

“The Bloomberg headline is problematic from RBC’s perspective,” said the OPC [Office of the Privacy Commissioner]’s Valerie Lawton, manager of strategic communications, in an email to 11 high-ranking employees, one of a flurry of emails.

Lawton said she had contacted Bloomberg. “Hopefully they will update based on my email,” she wrote.

In an email to Bloomberg, Lawton pressed for a change to the story. “The headline on the story (i.e. RBC faces investigation) is not correct, can you please revise?”

…click on the above link to read the rest of the article…

RBC Warns Cracks “Starting To Show” In Canadian Credit

April 12, 2018

RBC Warns Cracks “Starting To Show” In Canadian Credit

One often wonders if the government will ever realize that, due to its policies, its “solutions” often wind up turning into bigger problems than the ones they set out to address initially? Not only that, but this has been the case for decades, and it will continue to be the case until we “engineer” ourselves into a crisis that is too big to fix or too overwhelming to print our way out of.

Every day we discuss various aspects of a system that ends up far worse off due to a government apparatus that is convinced it knows best and that intervention and interfering are the solution to the problem. In essence, much of the financial crisis of 2008 was a result of the government interfering in the housing market in years prior, combined with the Fed not being able to forecast the crisis, despite widely ostracized skeptics such as Peter Schiff stating repeatedly that the housing market was heading into the abyss.

Today, we face a new set of challenges as a result of the way governments and central banks dealt (or rather, didn’t) with the 2008 financial crisis. In the United States there are bubbles forming in student loans and subprime auto lending,  while mortgage debt and consumer credit both look to soon be out of control yet again.

Meanwhile, the problem is spreading geographically and today we are presented with yet another “solution turned into problem”, and as Bloomberg reports, RBC now sees “cracks” in consumer credit becoming a problem yet again, this time in Canada. The combination of low interest rates and the cheap and easy access to capital has yet again gone from being a solution to a problem, as Canadian lenders are seeing delinquency rates “roll” out in time and duration.

…click on the above link to read the rest of the article…

RBC Explains What The Hell Is Going On: “Prudent” Fed & Chinese Intervention

May 25, 2017

RBC Explains What The Hell Is Going On: “Prudent” Fed & Chinese Intervention

A “prudent” Fed (and China’s “National Team”) have spurred a risk-on rally, as RBC’s head of cross-asset strategy Charlie McElligott notes the market’s ‘Pavolovian’ response to Fed’s ‘dovish hints’ contained within the Minutes – despite simultaneously staying ‘on message’ with hiking / tapering commentary – prompts a “QE of old” response: stocks and Treasuries bid, while the USD faded.

China further perpetuates the ‘risk rally’ via apparent market interventions:

1.       Intervention in FX markets to strengthen the Yuan overnight, with speculation of a number of Chinese banks selling Dollars in the onshore market overnight which drove the Yuan higher.

2.       Chinese “National Team” stock market inventions as well, with sharp-turns higher off of an initially weaker equities opening and again-weaker industrial metals.   Major reversals off lows saw nearly all domestic markets close at highs (Shanghai Prop +2.8%), while Hong Kong’s Hang Seng closed at highs since July 2015, with Chinese real estate developers leading.

Initial (and expected) ‘sell the news’ on the snoozer OPEC outcome, as they extend the output cut 9 months per expectations—which disappointed the ‘bullish surprise’ camp which anticipated more OPEC-‘gaming’ of the market, thinking it was possible for a deeper-cut in conjunction with the consensus extension.

This move lower in crude is notable if it were to escalate the current rollover in ‘inflation expectations’ (10Y BE’s below 200dma) which continue to show as the largest price drivers of risk-assets and major rates markets currently per the QI factor PCA model—although should be noted that both SPX and HYG (US HY proxy) are both deeply OUT OF REGIME with low r-squareds / low explanatory power.

Due to my much-discussed “Chinese deleveraging / Fed tightening / ECB pivoting ‘less dovish’” trifecta, we are seeing good buying in cash USTs and receiving in swaps (strong 5Y auction as well) keeping rates pinned despite the ongoing risk-asset rally.

…click on the above link to read the rest of the article…

Canada’s Fourth Largest Bank Erases $1 Billion In Excess Capital In Unexpected Accounting Gimmick

October 4, 2016

Canada’s Fourth Largest Bank Erases $1 Billion In Excess Capital In Unexpected Accounting Gimmick

Early in 2016, when oil prices were plunging and when US banks were careful to push up their loan loss reserves to exposed E&P loans, we noted something surprising: Canadian banks had barely taken any loss reserves to their exposure in the oil and gas sector.

As and RBC report calculated at the time, if they used the same average reserve level as that applied by US banks, Canadian banks’ current loss allowance excluding RBC would surge from $170MM to over $2.5 billion, resulting in a substantial hit to earnings, and potentially impairing the banks’ ability to service dividends and future cash distributions.

For months this discrepancy persisted even as oil remained well below last year’s levels, leaving Canadian bank watchers stumped as to just how Canadian banks planned to pull this particular “Exxon” without suffering balance sheet impariment, until this morning when we may have gotten the answer how the local Canadian money centers “planned” to resolve this odd accounting gimmick.

Today Bank of Montreal, perhaps the biggest violator of the loan loss reserve recongition, fell the most in two months after restating it restated its regulatory capital ratios for the first three quarters of the year. As Bloomberg first noticed, the shares slid 1.3% to C$84.72 in morning trade, the most intraday since July 27 and the worst performance in the eight-company S&P/TSX Composite Commercial Banks Index. The stock has gained 8.5 percent since Dec. 31. What was most notable about the restatement is that as one analyst calculated, the move was comparable to erasing C$1.3 billion ($1 billion) of excess capital at Canada’s fourth-largest lender.

…click on the above link to read the rest of the article…

Fresh Mainstream Nonsense on Gold Demand

May 16, 2016

Fresh Mainstream Nonsense on Gold Demand 

They Will Never Get It…

We and many others have made a valiant effort over the years to explain what actually moves the gold market (as examples see e.g. our  article “Misconceptions About Gold”, or Robert Blumen’s excellent essay “Misunderstanding Gold Demand”).  Sometimes it is a bit frustrating when we realize it has probably all been for naught.

Gold bars are displayed at a gold jewellery shop in the northern Indian city of ChandigarhGold wants to know what it has done now…     Photo credit: Ajay Verma / Reuters

This was brought home to us again in a recent missive posted at Kitco, which discusses an RBC research note on gold. In a way, it is actually quite funny. The post at Kitco is titled “Gold’s ‘One-legged’ Rally Is Cause of Concern”.

We can assure you it is not of “concern” to us. But we did wonder why the rally was supposedly “one-legged”, so we decided to read on.

Here is what RBC has decided was worth sharing in its new research report:

Despite gold’s impressive run up so far this year, analysts at RBC Capital Markets are concerned by the “one-legged” nature of its rally. In a research report Friday, commodity strategists for the bank noted that gold’s 2016 upswing has been mainly driven by investors, while other sources of demand haven’t followed through.

“In fact, investment demand seems to be the only leg driving this one-legged rally. For us to turn positive, we would need to see this strength replicated elsewhere,” they said. “Investor sentiment has turned amid a flight to safety, but that seems to be the only sentiment that has in fact shifted.”

(emphasis added)

Color us completely flabbergasted. What “others sources of demand” apart from investment demand are supposedly needed to produce a rally in gold and make it two-legged or maybe even three-legged?

1-Gold, dailyJune gold, daily. You poor one-legged thing! – click to enlarge.

…click on the above link to read the rest of the article…

Royal Bank and BMO defend Canada’s banking sector amid Panama Papers and Fintrac fine

April 7, 2016

Royal Bank and BMO defend Canada’s banking sector amid Panama Papers and Fintrac fine

Bad week for big banks as tax haven discussion hits at same time as fine levied for lack of disclosur

It has been a rough week, reputationally for Canadian banks, but fundamentally they remain among the world's best.

It has been a rough week, reputationally for Canadian banks, but fundamentally they remain among the world’s best. (Mark Blinch/Reuters)

The heads of Canada’s biggest banks say they are confident they are doing enough to fight money laundering and tax evasion amid the release of the Panama Papers and other stories that have cast doubt on the sector’s gold-plated reputation this week.

Royal Bank of Canada CEO David McKay said at the bank’s annual general meeting in Montreal on Wednesday that the bank is currently combing through its records to see what ties the bank may have to Panamanian law firm Mossack Fonseca, which is at the heart of the current banking secrecy scandal.

On Monday, RBC was implicated in the Panama Papers scandal when documents in the leak unearthed that the bank had created at least 370 foreign corporations on behalf of its clients via Mossack Fonseca over the years.

While there’s nothing illegal in and of itself from setting up a foreign bank account, such vehicles can be used to evade taxes, as opposed to avoiding and minimizing them via legitimate means.

McKay said he is unhappy the bank’s name has been “dragged into” the controversy involving offshore tax evasion allegations, especially considering that there is no evidence to suggest the company has done anything illicit.

“As a CEO, I have to be concerned about our brand and reputation, particularly in a situation where there’s absolutely no allegation of wrongdoing,” McKay said.

“We just happen to have a couple hundred files, going back 40 years, that are attached to this legal firm,” he said. “That’s all that’s been reported.”

 

These Are The Two Canadian Banks Most Exposed To A Severe Oil Shock According To Moody’s

February 22, 2016

These Are The Two Canadian Banks Most Exposed To A Severe Oil Shock According To Moody’s

Two weeks ago we asked if, in the aftermath of the dramatic selloff suffered by European banks over commodity exposure concerns, whether Canadian banks would not be next in line. The reason was that according to an RBC report, while US banks had already taken significant reserves against future oil and gas loans, roughly amounting to 7% of their exposure, Canadian banks were stuck in denial.

As RBC grudgingly noted, “The small negative moves in credit would normally not even “register” were it not for plenty of evidence of issues surround the oil and gas sector and the impact it could have on the oil producing provinces in Canada.” Yes, well, China already advised its media to stick to “positive reporting” – sadly for the energy-rich or rather energy-por province of Alberta it is now too late.

As for ths reason for this surprising reserve complacency, RBC said the following:

Canadian banks like to wait for impairment events to book PCLs rather than build reserves (called sectoral reserves in the past) for problematic industries.

In other words, let’s just wait with the reserves until the losses are already on the book: hardly the most prudent approach which may be why today, with its usual several week delay, Moodys opined on which Canadian banks it views as most susceptible to a “severe oil slump.”

As quoted by to Bloomberg, Moody’s said that “Canadian Imperial Bank of Commerce and Bank of Nova Scotia would be nation’s hardest hit lenders if the oil slump became sharply worse, while Toronto-Dominion Bank would best be able weather a worsening rout.”

“The prolonged slump in oil prices will increase the financial stress on oil producers and the drillers and service companies that support them, as well as on consumers in oil-producing provinces,” Moody’s said.

…click on the above link to read the rest of the article…

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