Christen, partner since 2018 (Los Angeles, California)
This week in charts
Yields
Mass Immigration Experiment Gives Canada an Edge in Global Race for Labor
A country about as populous as California has added more than all the residents in San Francisco in a year. Last week, Canada surpassed 40 million people for the first time ever — with growth only expected to continue at a rapid pace as it welcomes more immigrant workers, refugees and foreign students across its borders.
Now, as people flow into the country like never before, Canada has an immediate challenge: how to propel growth in rural regions in dire need of newcomers while minimizing the strains to urban centers already bulging with people.
The rewards are apparent. Population gains have boosted hiring and consumption, helping the economy withstand a rate-hike campaign by the Bank of Canada — so much so that the central bank this month had to resume tightening after a pause. Yet in a country that’s long been home to one of the world’s hottest housing markets, the government’s plan has drawn criticism that increasing immigration targets merely boosts economic output without raising living standards for individuals.
Even some prominent, pro-immigration economists are now saying Canada is going too far, too fast.
The looming threats of an aging population — leading to dwindling tax revenue and shrinking budgets — are playing out in different ways around the world. France’s plan to raise the retirement age by two years to 64 led to nationwide protests. Germany risks having 5 million fewer workers by the end of the decade, and already is struggling with strains in its industrial-heavy economy. Japan, where the government has long resisted immigration, is facing acute labor shortages, a rapid population decline, and dying rural towns.
CIBC under banking regulator’s remediation orders to fix mortgage underwriting lapses
Canadian Imperial Bank of Commerce has been under remediation orders from Canada’s banking regulator for more than a year after an audit of its mortgage portfolio uncovered breaches of rules that limit how indebted borrowers can be, sources say.
The problems surfaced last year in a routine regulatory audit of the bank’s mortgage portfolio conducted by the Office of the Superintendent of Financial Institutions (OSFI), which regulates large banks in Canada, according to two sources with direct knowledge of the issue.
The issues involve thousands of clients, many of whom had lines of credit that were secured against their homes. When these lines were combined with a CIBC mortgage, the total credit available exceeded allowed regulatory ratios.
The problems discovered did not involve fraud, the sources said.
The bank still doesn’t know the full extent of the issue, and has already spent tens of millions of dollars screening for problems and creating remedies, according to one of the sources. Internal estimates suggest it could take as much as two more years to fully solve the problems, the source said. However, the cases are not expected to result in noticeably higher losses on loans or have any material financial impact on the bank.
While the issues CIBC and OSFI uncovered affect only a small part of the bank’s $266-billion Canadian mortgage book, and are largely administrative in nature, stemming from back-office oversights and flaws in IT systems, their discovery has created more turbulence in one of CIBC’s core businesses. The issue also came to light at a moment when OSFI has voiced concerns about Canada’s competitive housing market amid higher interest rates.
MiFID U-Turn Plan Would Reverse Ban on Free Research for Clients
A piece of European Union legislation that forced financial firms to separate the cost of investment research from that of trading could be reversed under plans being championed by member states.
Their proposals would mean an investment firm would only have to inform clients whether they are paying for research and trading jointly, and record the charges attributable to each.
That’s a dramatic shift from current regulations, which separated the two in a bid to eliminate conflicts of interest that could distract money managers from seeking the cheapest transaction costs for investors. But evidence suggests research provision across the region has suffered as a result.
The prospect of a major rollback of the rules comes at a key moment for the research industry globally. In the US, a waiver that has allowed brokers to charge European clients separately for trading and research is about to expire, forcing them to finally adapt to the regulatory mismatch between the regions. Meanwhile, the UK is undertaking a review of investment research that’s expected to lead to its own easing of unbundling rules.
OpenAI plans app store for AI software, The Information reports
Enterprise customers using ChatGPT often tailor the technology to their specific uses, which range from identifying financial fraud from online transaction data to answering questions about specific markets based on internal documents. According to the news report, makers of such models could offer them to other businesses through OpenAI's proposed marketplace.
Such a marketplace could compete with app stores run by some of the company's customers and technology partners - including Salesforce and Microsoft - and help OpenAI's technology reach a broader customer base.
The Information also reported that two of the company's customers, Aquant, which makes software that manufacturers use to guide customers through device maintenance and repairs, and education app maker Khan Academy, might be interested in offering their ChatGPT-powered AI models on OpenAI's marketplace.
Since its release late last year, hundreds of businesses have adopted ChatGPT to automate tasks and increase efficiency. Companies are also racing to offer their customers new tools and capabilities based on the AI software's advanced large language models (LLMs).
This week’s fun finds
EdgePoint Football Club launches with a win
In our inaugural game, EdgePoint won a squeaker 3-2.
How clams help keep Polish water clean
A water pump known as Gruba Kaska (Fat Kathy) is a local landmark in Warsaw. To get there, you must walk 300 metres through a slimy tunnel under the Vistula river. There you will find eight clams hooked up to computers. They are monitoring the city’s drinking water.
The system is nifty. When the molluscs encounter heavy metals, pesticides or other pollutants, they close their shells, explains Piotr Domek of Adam Mickiewicz University in Poznan, who has worked on the project for three decades. To create a natural early-warning system, Mr Domek and his colleagues collect the clams from rivers or reservoirs, and attach a coil and a magnet to their shells. Computers register whether their shells are open or closed by detecting changes in the magnetic field.
“In the case of a terrorist attack, an ecological disaster or another contamination of the water supply, the clams will close,” says Mr Domek. This, in turn, will automatically cut off the water supply. The clams, he thinks, are life-savers. “If contaminated water goes straight to our taps, we will get poisoned,” he says in “Fat Kathy”, a short film that celebrates the invaluable bivalves.
The Story of Why Over 500 Pubs in the United Kingdom Share the Same Name
As with most things in England, there's plenty of history and tradition to back up the trend. The name Red Lion adorns the sign above hundreds of drinking holes throughout the country and even the world. In London alone, there are more than 20, according to the latest count of open restaurants on Google. The reason why is up for debate but on a recent trip to London, my tour guide shared the following story, which was corroborated by Historic UK.
All the way back in 1603, James VI of Scotland inherited the throne to become James I of England. The only problem was that he wasn't incredibly fond of England, seeing as though his predecessor and mother, Mary, Queen of Scots, spent over 18 years in captivity before ultimately being beheaded. The charge against her being a plot to assassinate Queen Elizabeth I. So when he ascended to the throne, he ordered that all buildings of importance display the red lion of Scotland — and that included pubs. The idea was that any Englishman or woman would constantly be reminded that their king was Scottish every time they went for a tipple.
