Lawmakers hit out at ECB as bad loans standoff hardens

The European Central Bank recently announced timelines to set aside money for losses on new loans that have gone roughly three months unpaid, angering EU lawmakers. Above, the ECB headquarters in Frankfurt, Germany. (Reuters)
Updated 13 October 2017
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Lawmakers hit out at ECB as bad loans standoff hardens

FRANKFURT: The head of the EU Parliament’s influential economic affairs committee has urged the European Central Bank to “correct” its stance on bad loans, adding to a backlash against attempts to clean up soured credit.
Roberto Gualtieri’s comments echoed concerns expressed by the parliament’s president Antonio Tajani this week, in what is emerging as the biggest challenge yet to the ECB as banks supervisor.
At the center of the dispute is how best to tackle banks’ bad loans, which stand at more than $1 trillion, a thorny issue that has divided euro zone countries and is now driving a wedge between the ECB and the EU’s parliament.
The ECB recently announced timelines to set aside money for losses on new loans that have gone roughly three months unpaid, angering EU lawmakers, who are trying to draft their own rules on soured credit.
“I share the concerns expressed by President Tajani,” Gualtieri said. Lawmakers want the ECB to first wait for the EU parliament before introducing such rules.
“I hope ... the consultation process will help the SSM (banks supervisor) to ... correct its guidance in order to make it more balanced.”
Both Tajani and Gualtieri are Italian but their views, unusually, are shared by some Germans. Italy and Germany clashed over Rome’s handling of its banking crisis, with Berlin pushing for tougher treatment of those banks’ creditors.
Markus Ferber, vice chair of the economic and monetary affairs committee and an influential member of German chancellor Angela Merkel’s Christian Democrats party, accused the ECB of overstepping its powers.
“I ... think that the ECB went beyond its mandate and in my opinion that undermines confidence in the work of the ECB as a supervisor,” Ferber told Reuters.
“The ECB tried to come up with universal new capital requirements. Such universal rules, however, should be a prerogative of the European legislator.”
The remarks came as rating agency Moody’s warned that the ECB drive could hurt the credit standing of banks in countries with many problem loans.
“This could cause problems for some firms, especially for those that do not have large capital buffers,” said Moody’s Alain Laurin.


Twitter suspended 58 million accounts in 2017 fourth quarter

Updated 18 July 2018
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Twitter suspended 58 million accounts in 2017 fourth quarter

  • Twitter executives say efforts to clean up the platform are a priority
  • Company struggling with user growth compared to rivals like Instagram and Facebook

NEW YORK: Twitter suspended at least 58 million user accounts in the final three months of 2017, according to data obtained by The Associated Press. The figure highlights the company’s newly aggressive stance against malicious or suspicious accounts in the wake of Russian disinformation efforts during the 2016 US presidential campaign.
Last week, Twitter confirmed a Washington Post report that it had suspended 70 million accounts in May and June. The cavalcade of suspensions has raised questions as to whether the crackdown could affect Twitter’s user growth and whether the company should have warned investors earlier. The company has been struggling with user growth compared to rivals like Instagram and Facebook.
The number of suspended accounts originated with Twitter’s “firehose,” a data stream it makes available to academics, companies and others willing to pay for it.
The new figure sheds light on Twitter’s attempt to improve “information quality” on its service, its term for countering fake accounts, bots, disinformation and other malicious occurrences. Such activity was rampant on Twitter and other social-media networks during the 2016 campaign, much of it originating with the Internet Research Agency, a since-shuttered Russian “troll farm” implicated in election-disruption efforts by the US special counsel and congressional investigations.
Suspensions surged over the fourth quarter. Twitter suspended roughly 15 million accounts last October. That number jumped by two-thirds to more than 25 million in December.
Twitter declined to comment on the data. But its executives have said that efforts to clean up the platform are a priority, while acknowledging that its crackdown has affected and may continue to affect user numbers.
Twitter said in April it had 336 million monthly active users, which it defines as accounts that have logged in at least once during the previous 30 days. The suspended accounts do not appear to have made a large dent in this number, which was up 3 percent from a year earlier. Twitter maintains that most of the suspended accounts had been dormant for at least a month, and thus weren’t included in its active user numbers.
Michael Pachter, a stock analyst with Wedbush Securities, said he thinks the purge late last year may have been part of an initial sweep of inactive accounts that had little effect on activity or advertising revenue. But he said he expected advertising revenue to fall 1 to 2 percent due to the more recent purge last week, when Twitter said it was removing frozen accounts from follower counts.
He expects the company to be upfront about the impact when it announces quarterly earnings on July 27, and said the cleanup is good for users and advertisers. “They’re certainly doing the right thing,” he said.
Scott Kessler, an analyst with CFRA who has a “sell” rating on Twitter stock, said multiple reports and vague clarifications by executives are creating uncertainty about what Twitter’s numbers really mean.
The purge activity “adds a level of uncertainty,” he said. “As an analyst, I want a more genuine view of the user base.”
Chief Financial Officer Ned Segal said in February that some of the company’s “information quality efforts” that include removing accounts could affect monthly user figures. Segal offered no specifics.
Six months later, in late June, Twitter disclosed that its systems found nearly 10 million “potentially spammy or automated accounts per week” in the month of May, and 6.4 million per week in December 2017. That’s up from 3.2 million per week in September. The company didn’t say how many of these identified accounts were actually suspended.
Following the Post report, which caused Twitter’s stock to drop sharply, Segal took to Twitter to reassure investors that this number didn’t count in the company’s user metrics. “If we removed 70M accounts from our reported metrics, you would hear directly from us,” he tweeted last Monday .
Shares recovered somewhat after that tweet. The stock has largely been on an upswing lately, and more than doubled its value in the past year.
Twitter is taking other steps besides account deletions to combat misuse of its service, working to rein in hate and abuse even as it tries to stay true to its roots as a bastion of free expression. Last fall, it vowed to crack down on hate speech and sexual harassment and CEO Jack Dorsey echoed the concerns of critics who said the company hasn’t done enough to curb such abuse.