🏦 Your Move: HSBC’s Pressure on Major Banks

^{“May all your ‘soons’ turn into ‘finally.’”}

— Unknown

👋 Friends, Rallie here. The newsletter serving your inbox with the latest crypto, finance, and tech news.

On the menu:

• 🏦 Your Move: HSBC’s Pressure on Major Banks

• 🗞️ Headlines That Hit

• 📈 Refresh: The Big Six

• ✌️ Trivia Tuesday

• 💯 Top Tweets

The Rallie Recap

₿ Full speed ahead for AI & crypto and why HSBC’s activity in Hong Kong could affect you. Hop on for a round trip on today’s news!

• What is HSBC? One of the world’s largest banks by total assets and the largest bank in Europe through market cap, the Hongkong and Shanghai Banking Corporation has a massive sway in the global economy. 🗺️

• How are they changing the industry? Always ahead of the game, HSBC Hong Kong has been providing customers with access to bitcoin and ether exchange-traded funds since December.

• An important reminder that crypto can move on from trading hubs such as the U.S. to places like Hong Kong. On June 1st, Hong Kong’s Securities and Futures Commission (SFC) started to accept applications for crypto trading platforms and invited Coinbase to register in the area. Completely opposite from U.S.’s SEC lawsuit against the same company. 😳

• With HSBC’s large influence, it put eyes on other financial institutions to see how they size up against them.

• But crypto is not the only place HSBC has been a leader, the bank has been a test customer for Google Cloud’s AI-powered anti-money laundering tool with reported success. A critical area of concern for the financial services sector, tracking money from illegal activities is difficult and time-consuming. 💸

• Moving on from legacy monitoring systems that give 95% false positives for money laundering, the new tool HSBC is embracing with Google could be the next step forward in the banks use of AI.

• 🇨🇦 On the Canadian front…RBC looking to take over HSBC’s Canadian division has caused a public consultation from the government.

• However, some are split on what this means for Canada’s banking competition. As the seventh largest bank in the country by assets, there is some level of competition provided by HSBC that could be taken away with this takeover. 🤼

• The President of RBC argued against concerns, saying “It doesn’t change any of the market structure…this is good for Canada.”

• Although talks have been ongoing since November, the changes caused by this merger might be happening soon with the deal closing in late 2023.

• Along with making waves globally, HSBC also has strong comments on many markets. Warning signs for a recession are “flashing red” while fiscal and monetary policies are disjointed from the bond and stock market, according to HSBC’s asset manager. 🚩

• But… time will tell how HSBC’s moves and predictions pan out to impact the world.

Headlines That Hit

• 🇷🇺 3x the volume! The short mercenary rebellion in Russia causes many citizens to exchange rubles to Tether, a crypto stablecoin, tripling its trading volume to ~$15M.

• 🌪️ Overly optimistic. IMF warns hopeful investors, “inflation is taking too long to get back to target” and the battle is still not over.

• ☠️ Canada ban. News content from Facebook and Instagram will be gone and sharing links from publishers will also be blocked. Negotiations ongoing.

• ⛽ A new challenger approaches! Hydrogen energy could be the next big, green and renewable power source with 150T metric tons waiting to be harnessed.

• 👾 Critical hit?! The cyberattack on Suncor Energy could be Canada’s first large-scale, successful attack on a domestic oil and gas company. The impact of the hack is still being investigated.

• 👮 Harsh consequences for employers. Wage-fixing and no-poaching agreements are now prohibited with up to 14 years of prison and no cap on financial penalties for companies found guilty.

Rallie Refresh: The Big Six

🏛️ Canada’s six largest financial institutions — chances are that you’re a client of one of them. What are they and how can these banks be controversial? Here’s what you need to know:

💵 What are the Big Six?

1. Royal Bank of Canada (RBC)

2. Toronto-Dominion Bank (TD)

3. The Bank of Montreal (BMO)

4. The Bank of Nova Scotia aka Scotiabank

5. The Canadian Imperial Bank of Commerce (CIBC)

6. The National Bank of Canada

• Sometimes, the National Bank of Canada is excluded from the list, so the top financial institutions of the nation are often referred to as the Big Five. 🖐

• 📊 All of these banks trade under their respective ticker symbol in the stock market.

• From billions to trillions, the range of assets under management (AUM) by each bank varies widely.

• Many are influential in their international reach and investments. 🌐

• These banks hold 93% of all banking assets in Canada.

🚨 How can they be controversial?

• The generous benefits given to these “pillars” in Canada’s economy roots out competition and often gets away with issues like high account fees and low interest for customers. 🤑

• ⛓ Government bailouts are expected because of their large deposit bases and Canada restricts payment systems to limit the competition these banks face.

• Despite the fact that some of their investments may violate the moral code and standards of many Canadians, their overwhelming power allows them to neglect protests without much backlash. 🤷‍♀️

• The general reliance on these institutions and market impact of each of these banks’ actions is also highly concerning.

🤔 Banking gets controversial, but we’ll keep you informed. Remember to do your own research on your bank for the most accurate and personalized information.

✌️Trivia Tuesday✌️

💡 The answer for Thursday’s newsletter (which country invested the most in Canada (2022) through foreign direct investment?) is the United States! Tune in next time for today’s fun fact answer.

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That's all for today. Stay hungry & we'll catch you next time. ✌️

DISCLAIMER: This is not financial or legal advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.\