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Exclusive Details on Michael Bloomberg’s Plan to Rein in Wall Street - The New York Times

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Exclusive: We’re the first to report Mike Bloomberg’s proposals for changing how the financial industry is regulated, which he is planning to announce this morning. The plan features ideas that wouldn’t be out of place for Senators Bernie Sanders and Elizabeth Warren.

Among Mr. Bloomberg’s proposals:

• A financial transactions tax of 0.1 percent

• Toughening banking regulations like the Volcker Rule and forcing lenders to hold more in reserve against losses

• Having the Justice Department create a dedicated team to fight corporate crime and “encouraging prosecutors to pursue individuals, not only corporations, for infractions”

• Merging Fannie Mae and Freddie Mac

• Strengthening the Consumer Financial Protection Bureau and “expanding its jurisdiction to include auto lending and credit reporting”

• Automatically enrolling borrowers of student loans into income-based repayment schemes and capping payments

Many of the proposals are a reversal from Mr. Bloomberg’s previous stance on financial regulation. In 2011, he complained that Democrats were taking “punitive actions” against Wall Street that could harm the economy. And comments he made in 2015 linking the financial crisis to the end of banks’ so-called redlining practices have drawn fierce criticism in recent days.

It’s a sign of how far left Democratic presidential hopefuls feel they need to go to succeed in this year’s primary — even with a multibillion-dollar war chest. Mr. Bloomberg’s financial transactions tax plan is remarkably similar to one that has the backing of Representative Alexandria Ocasio-Cortez.

Progressive critics are likely to argue that it doesn’t go far enough. Many Democrats have also proposed some sort of wealth tax, while Ms. Warren has called for a complete overhaul of the private equity industry and Mr. Sanders wants to break up the big banks.

Bloomberg’s campaign insists he isn’t flip-flopping: On the Volcker Rule, for instance, a spokeswoman said: “When it was introduced, as now, Mike was skeptical of regulators’ ability to divine traders’ intent.” His new plan would focus “on the outcome of speculative trading — big gains and losses — rather than on traders’ intent.”

We’ll have more soon on nytimes.com/dealbook.

Breaking: This morning, Mr. Bloomberg qualified for the Democratic debate in Las Vegas on Wednesday night, the first time he will appear onstage with his rivals for the nomination.

The iPhone maker was one of the first big companies to reveal how the coronavirus outbreak was affecting its business. The company said yesterday that “a slower return to normal conditions than we had anticipated” forced it to scrap its guidance for revenue this quarter.

There is more to come. China’s central position in global supply chains — and as a huge market in itself — means that the outbreak could ripple through company’s financials for months.

Good luck, analysts! The virus outbreak’s negative but uncertain effects are coming up often in earnings calls: “Coronavirus” has been cited in 170 investor presentations by S&P 500 companies in the past month, according to a search of transcripts in S&P Capital IQ. Apple’s forecast for future profits was already more vague than usual “due to the greater uncertainty,” Tim Cook, its C.E.O., said last month.

Taking a different approach, Walmart said this morning that its forecast for the current financial year didn’t take into account any potential effects of the virus outbreak.

The London-based bank said this morning that it planned to cut about 35,000 jobs over the next three years as it retreats from the West to focus more on Asia.

“We are intending to exit a lot of domestically focused customers in Europe and the U.S. on the global banking side,” Ewen Stevenson, the bank’s C.F.O., told Bloomberg Television. He said the lender would make “surgical and ruthless” cuts to underperforming businesses.

The plan is to accelerate investment in its Asian and Middle Eastern businesses, which already generate nearly half of its revenue. That’s the strategy that Standard Chartered, another London-based, Asia-focused bank, has followed.

The initiative may not be enough. Shares in HSBC dropped 3 percent this morning. Alan Higgins, the chief investment officer of Coutts & Company, told Bloomberg that the strategy was “on the conservative side.”

The Amazon chief has announced his biggest charitable donation to date, a fund to study and fight climate change, Karen Weise of the NYT writes.

Mr. Bezos is a latecomer to large-scale charitable giving, starting in 2018 with a $2 billion program to combat homelessness created with his then-wife, MacKenzie.

Amazon has been under pressure to reduce its carbon footprint. It revealed in September that it emitted about 44.4 million metric tons of carbon dioxide in 2018, making it one of the world’s top 200 emitters. And employees have called on the company to stop providing services to oil and gas industries.

“One hand cannot give what the other is taking away,” said Amazon Employees for Climate Justice, a group of workers protesting the company’s environmental practices.

Atomico said this morning that it had raised Europe’s largest-ever independent tech venture fund, worth $820 million. The London-based venture capital firm’s founder, Niklas Zennstrom, told Michael in an interview that it was a sign of how the European start-up industry is coming into its own.

There are now 99 “unicorns” — VC-backed start-ups worth at least $1 billion — in Europe, compared with 22 five years ago. “Companies are taking on bigger challenges, and there’s more ambition and experience,” Mr. Zennstrom said.

That enabled Atomico to raise more money for its fifth fund than the $750 million it had originally planned. Among the investors in this fund are founders and early employees of Atomico-backed companies like Spotify, the payments company Klarna and the game maker Supercell. Mr. Zennstrom himself is a Swedish billionaire who co-founded Skype.

But Mr. Zennstrom sees hurdles ahead:

• Valuation multiples for European start-ups aren’t as high as those for U.S. companies. (There are twice as many V.C.-backed unicorns in the U.S., according to PwC.) Even so, Mr. Zennstrom said that unlike their American rivals, European start-ups were more focused on creating businesses that can become profitable.

• Although Europe has plenty of gifted coders, getting them to come to a particular start-up — often in a different country — is a challenge.

While on a trip to Europe, the Facebook founder suggested that new rules and standards were needed to promote public trust in tech platforms.

“I believe good regulation may hurt Facebook’s business in the near term, but it will be better for everyone, including us, over the long term,” Mr. Zuckerberg wrote in an FT opinion piece. Facebook also published a white paper with “guidelines for future regulation.”

E.U. officials rejected his proposals. “It’s not enough. It’s too slow, it’s too low in terms of responsibility and regulation,” said a European Commissioner. And in response to Mr. Zuckerberg’s opinion piece, George Soros wrote a letter to the FT calling on the C.E.O. to “stop obfuscating the facts by piously arguing for government regulation” and urging him to resign.

Deals

• Pier 1 Imports filed for Chapter 11 bankruptcy protection. (NYT)

• Univision is reportedly in talks to sell itself to an investor group for about $10 billion, including debt. (WSJ)

• Alstom agreed to buy Bombardier’s train division for up to $6.7 billion to take on China’s CRRC. (Reuters)

• Warren Buffett’s Berkshire Hathaway sold a third of its stake in Goldman Sachs and a fifth of its shares in Wells Fargo. (Reuters)

Politics and policy

• The millennial goal of retiring early would be bad news for the Fed if they could manage to do it. (NYT)

• Some employees at Oracle are protesting plans by their C.E.O., Larry Ellison, to hold a fund-raiser for President Trump. (Business Insider)

Tech

• Germany is poised to let Huawei into its 5G wireless network, a blow to the Trump administration’s fight against the Chinese telecom giant. (NYT)

• The SoftBank-backed hotel platform Oyo reported a fourfold increase in revenue and a sixfold rise in its annual loss. (Bloomberg)

• Palantir revamped its compensation to give employees bonuses in restricted stock, to save cash ahead of a potential I.P.O. (Bloomberg)

Best of the rest

• BlackRock has become a symbol for anticapitalist fervor in France (NYT)

• The N.B.A. commissioner, Adam Silver, said that the league’s rift with China could cost it up to $400 million in lost revenue. (CNBC)

• Have global carbon emissions peaked? The short answer is probably not. (Bloomberg)

We’d love your feedback. Please email thoughts and suggestions to business@nytimes.com.

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