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Scandal-plagued Wirecard says accounts worth billions likely don't exist – CTV News

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BERLIN —
German payment service provider Wirecard said Monday it has concluded that two accounts that were supposed to contain 1.9 billion euros (US$2.1 billion) probably don’t exist, deepening troubles that last week prompted the resignation of its chief executive.

Wirecard AG was once regarded as a star of the growing financial technology sector, but its shares have fallen sharply after the company became the subject of multiple Financial Times reports about accounting irregularities in its Asian operations. Wirecard disputed the reports, which started in February 2019, and said it was the victim of speculators.

Last week, the company disclosed that auditors couldn’t find accounts containing the 1.9 billion euros and postponed its annual report. On Friday, CEO Markus Braun resigned and was replaced by James Freis.

Two Philippine banks that were said to hold the money in escrow accounts said that they had no dealings with Wirecard.

The Bank of the Philippine Islands said a document claiming the company was a client was “spurious.” BDO Unibank said that a document claiming the existence of a Wirecard account was falsified and “carries forged signatures of bank officers.”

On Monday, Wirecard said its management board “assesses on the basis of further examination that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion euros do not exist.”

Wirecard said it is in “constructive discussions” with banks on continuing credit lines, and is “assessing options for a sustainable financing strategy for the company.” It said it’s examining other possible measures to keep the business going, including restructuring and disposing of business units.

After plummeting last week, Wirecard’s shares took another dive on Monday. They were down 36.8% at 16.32 euros in midday Frankfurt trading.

The president of German financial regulator BaFin, Felix Hufeld, described the situation as “a complete disaster” and said “it is a disgrace that something like this happened,” news agency dpa reported.

“We are in the middle of the most appalling situation I have ever seen a DAX company in,” Hufeld said at a conference in Frankfurt, referring to Germany’s leading index of blue-chip stocks.

He acknowledged criticism of regulators including BaFin, saying that “we were not effective enough to prevent something like this happening.”

The company was once considered a star of Germany’s tech sector; its market value at one point exceeded that of Deutsche Bank. Wirecard pushed Germany’s No. 2 bank, Commerzbank, out of the DAX.

The company had rapidly expanded outside Germany, building an Asia-Pacific business and entering the North American market by buying Citigroup’s prepaid card services business in 2016.

“You have to pinch yourself and wonder if what is going on at Wirecard is true,” said Robert Halver, an analyst at Baader Bank in Frankfurt.

He noted that Germany is “not spoilt for high-tech companies” and raised the possibility of the German government considering action to preserve Wirecard’s technology, arguing that “it would be bad if Wirecard became a takeover object for China.”

——

Christoph Noelting in Frankfurt contributed to this report

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21 more cases of COVID-19 reported in B.C. – CTV News VI

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VICTORIA —
Another 21 cases of COVID-19 have been confirmed in British Columbia, health officials announced Wednesday.

The total includes 19 new positive tests for the coronavirus and two additional epidemiologically linked cases, bringing the total number of confirmed cases in B.C. since the pandemic began to 3,149.

There have been no additional deaths from the virus over the last 24 hours, leaving the provincial death toll at 189.

There have now been 2,753 recoveries from the virus in B.C., leaving the province with 207 active cases. Of those, 14 people are hospitalized and five are in intensive care.

Wednesday’s update from provincial health officer Dr. Bonnie Henry and Health Minister Adrian Dix came in the form of a news release. It comes after a surge in new positive tests reported over the weekend, many of them related to private parties in the province’s Interior.

The 21 additional cases announced make Wednesday the sixth day out of the last seven in which the provincial case count grew by at least 20. Tuesday, when 13 new cases were reported, was the only day in the last week not to cross that threshold.

Dix and Henry addressed these increases in their joint statement Wednesday.

“We are concerned about the increase in new cases in recent days as COVID-19 continues to silently circulate in our communities,” the pair said. “As we spend more time with others, we need to find our balance with COVID-19. We need to minimize the number of cases, manage new cases as they emerge and modify our activities accordingly.”

The officials noted that many of B.C.’s early cases of the coronavirus were found in long-term care and assisted-living facilities, the recent growth in the provincial caseload has happened mostly in the broader community.

There continue to be three ongoing outbreaks of COVID-19 in health-care facilities, including two in seniors’ care homes and one in an acute care unit. There is also one ongoing “community outbreak,” according to Dix and Henry.

Most cases of COVID-19 in B.C. have been located in the Lower Mainland, with 1,659 in the Fraser Health region and 1,023 in the Vancouver Coastal Health Region.

Elsewhere in the province, there have been 216 cases in Interior Health, 135 in Island Health and 65 in Northern Health.

An additional 51 cases of COVID-19 reported in B.C. have been found in people who reside outside Canada, according to Wednesday’s update.

Henry and Dix will deliver their next live briefing on Thursday.

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'A long climb back': Macklem stresses recovery as BoC holds – BNN

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Bank of Canada Governor Tiff Macklem sent a clear message with Wednesday’s Monetary Policy Report: Economic recovery from the COVID-19 pandemic is the central bank’s top priority.

“The recovery has started, and we’re seeing some good numbers, but it’s going to be a long climb back,” Macklem told BNN Bloomberg in an interview Wednesday, just hours after the Bank of Canada held its benchmark interest rate at 0.25 per cent and made it clear it’s in no rush to move off that level.

“Considerable policy support is going to be required. Fiscal policy is taking a lead, but monetary policy has an important complementary role to play, and we wanted to be clear to Canadians that the Bank of Canada is going to be there through the full length of the long climb back.”

He also said that the central bank is prepared to add more stimulus, if required, a policy he says was made clear in the Bank of Canada’s central scenario issued with Wednesday’s MPR.

“The purpose of putting out a central scenario is that — even though there is considerable uncertainty around it — it is the scenario that guided us in our policy deliberation,” he said.

“As data comes in we’ll be evaluating that relative to that central scenario. If we need more monetary stimulus, we’ll do that.”

Macklem highlighted Canadians’ high level of household indebtedness as a longstanding concern for the Bank of Canada, but expressed confidence that economic recovery could prove to be a rising tide.

“The best predictor of whether somebody is going to pay their mortgage is whether they have a job,” Macklem said. “Yes, high household indebtedness is a vulnerability, but supporting the recovery and reducing that vulnerability are entirely aligned.”

“By holding interest rates low across the yield curve, that will reduce debt burdens for Canadians.”

While Macklem said the central bank “didn’t put [its] forward guidance on a calendar,” its central scenario indicates that the key interest rate will remain where it is for at least two years.

“There’s a lot of uncertainty around that scenario, but I think the message is pretty clear,” he said. “Interest rates are going to be very low for a long time.”

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'Interest rates will be low for a long time': Canadian home sales jumped in June – Yahoo Canada Finance

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CERB. Canadian Emergency Response Benefit

Canada’s real estate markets continue to snap back after COVID-19 lockdowns put a damper on the typically busy spring market.

The Canadian Real Estate Association (CREA) says national home sales jumped 63 per cent month-over-month in June. Sales are up 150 per cent from April.

“While June’s housing numbers were mostly back at normal levels, we are obviously not back to normal at this point,” said Shaun Cathcart, CREA’s Senior Economist, in a release.

“I guess the bigger picture is one of cautious optimism. The market has recovered much faster than many would have thought, but what happens later this year remains a big question mark.”

The Fraser Valley led the way with a 99.7 per cent increase, followed by the Greater Toronto Area (83.8 per cent), Montreal (75.1 per cent), and Greater Vancouver (60.3 per cent).

The MLS Home Price Index (HPI) rose 0.5 per cent month-over-month and 5.4 per cent year-over-year.

“Frankly, that’s a much earlier turn than we had expected in this key measure, let alone what the housing bears anticipated,” said Douglas Porter, BMO chief economist, in a note.

“Home sales, prices and starts have effectively regained all the ground lost during the shutdown. However, fair point that some of this outsized strength is simply pent-up demand for the lost sales from the key spring season, and it remains to be seen if the momentum can be maintained.”

Emergency COVID-19 measures, like mortgage deferrals and CERB, have helped keep Canadians afloat during the pandemic. But those programs are set to wind down, so the longer term outlook could be much different.

“For those who lost their job or are already stretching their salaries to continue to pay their mortgage, the ending of programs such as CERB could significantly impact the course of their existing and future housing purchase or selling plans. In the short term, until the end of 2020, there appears to be enough pent up demand to maintain a sellers’ market in major centres,” said John Lusink, president of Right at Home Realty,

“If people are unable to get back to work or government support programs are not renewed, we could see an impact on the real estate market, albeit very unlikely to the extent we saw in 2008-2009 or the early 90’s.”

Lusink says low inventory has brought about multiple offers, which has allowed sellers to put a higher prices on their properties.

Immigration rates are also set to decline, but Royal LePage President and CEO Phil Soper, says that won’t have a large effect.

“Research into the home purchase behaviour of new Canadians leads us to believe that the pandemic-driven drop in immigration will have only a muted impact on our housing market. We found that only 15 per cent of immigrants purchased a home in their first three years in Canada. Note that by ten years of residence, newcomers have a higher rate of homeownership than those born in the country – their desire to own is strong, but it takes time to realize that dream,” said Soper.

“There will be an indirect impact on housing, as these new arrivals would have driven demand for rental accommodation. Add to this the near shutdown of short-term, Airbnb-style rentals and we could see landlords selling underutilized properties. It appears that there is a line-up of first-time buyers, encouraged by historically low interest rates, to acquire these homes.”

Anyone currently in the market, or planning to get in can expect low mortgage rates for the foreseeable future. The Bank of Canada maintained its key overnight rate today. During a press conference, governor Tiff Macklem was clear in his messaging.

“The message to Canadians is that interest rates are very low and they’re going to be there for a long time. We recognize that Canadians and Canadian businesses are facing an unusual amount of uncertainty, so we have been unusually clear about the future path for interest rates,” said Macklem.

“If you’ve got a mortgage or if you’re considering to make a major purchase or you’re a business and you’re considering to make an investment, you can be confident that interest rates will be low for a long time.”

James Laird, Co-founder of Ratehub.ca, says buyers should get a pre-approval now to know how much house they can afford and to take advantage of low rates.

“As the real estate market continues to rebound competitive pressure between mortgage lenders is causing both fixed and variable rates to inch down on a continuous basis.”

“For Canadians that are currently shopping for a home they should get a pre-approval to lock in today’s rates for up to 120 days. Anyone with a mortgage coming up for renewal or who is considering a refinance should shop around to take advantage of the historically low rates.” 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter&nbsp;@jessysbains.” data-reactid=”48″>Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Download the Yahoo Finance app, available for&nbsp;Apple&nbsp;and&nbsp;Android.” data-reactid=”49″>Download the Yahoo Finance app, available for Apple and Android.

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