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Israel Aerospace eyes 25 percent share sale and more UAE deals

State-owned Israel Aerospace Industries (IAI) and the United Arab Emirate’s state-owned defense conglomerate EDGE have started work on joint development of an advanced drone defense system, while IAI is likely to sell 25 percent of the company on the Tel Aviv Stock Exchange in the first half of 2022, its chief executive said on Wednesday.

Israel’s privatization panel gave approval last year for IAI to sell up to 49 percent of its shares in an initial public offering.

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“We’re aiming right now for 25 pct. It will be a first step,” Boaz Levy told Reuters after IAI reported a slight rise in third-quarter profit. “It will be somewhere in the first half of next year.”

The share offering still needs final government approval, he added.

IAI, one of Israel’s largest defense companies, earned net profit of $31 million in the three months to Sept. 30, compared with $30 million a year earlier. Sales rose to $1.04 billion from $1.01 billion, boosted by its Systems Missiles & Space and the Military Aircraft divisions.

Sales for export over the first nine months of the year accounted for 73 percent of total sales.

Defense budgets are rising, Levy said.

“We see many conflicts around the world and many changes that require a new approach and new capabilities … We are trying to be a part of that,” he said.

IAI last week opened a new office in Abu Dhabi in the United Arab Emirates and has already signed a $100 million contract to convert Boeing 777-300ER passenger jets to cargo planes, which Levy said was “just the beginning.”

He said an office in the UAE was necessary to continue to bid for contracts and that IAI is also starting work on joint development of an advanced drone defense system with the UAE’s state-owned weapons maker EDGE.

The deals follow normalization of relations between Israel and the UAE last year, as well as with Bahrain and Morocco.

As part of the so-called Abraham Accords, the Israeli and Moroccan defense ministers on Wednesday signed defense memorandums of understanding.

Levy said he expects IAI to make further inroads in the UAE and the Gulf with its products in space, air, land and sea.

“We are just opening a channel and the Abraham Accords are really a game changer in our arena,” he said.

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Swiss government suspends forms of variable remuneration at Credit Suisse

Switzerland's finance department has issued an order to Credit Suisse to temporarily suspend certain forms of variable pay for the bank's employees, the Swiss government said.

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“This measure relates to already granted but deferred remuneration for the financial years up to 2022, for example in the form of share awards,” the Swiss Federal Council said in a statement.

The government said that deferred payments that were already in the process of being paid out were exempt from the order.

The Swiss government also instructed its finance department to propose further measures on variable remuneration for Credit Suisse.

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Yellen vows to safeguard US bank deposits, may need more interventions

The US banking system is stabilizing after strong actions from regulators, but further steps to protect bank depositors may be needed if smaller institutions suffer deposit runs that threaten more contagion, US Treasury Secretary Janet Yellen told bankers on Tuesday.

In prepared remarks to an American Bankers Association conference, Yellen said government steps taken in recent days to protect uninsured deposits in two failed banks and create new Federal Reserve liquidity facilities have shown a “resolute commitment to take the necessary steps to ensure that depositors’ savings and the banking system remain safe.”

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Yellen, speaking more than a week after the Federal Deposit Insurance Corp (FDIC) closed the failing Silicon Valley Bank and Signature Bank, said the “decisive and forceful” actions were strengthening public confidence in the US banking system and protecting the American economy.

“The steps we took were not focused on aiding specific banks or classes of banks. Our intervention was necessary to protect the broader US banking system,” Yellen said in the remarks released by the Treasury.

“And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion,” she added.

She said she believed the actions by the FDIC, the Federal Reserve and the Treasury had reduced the risk of further bank failures that would have imposed losses on the bank-funded Deposit Insurance Fund.

Yellen did not provide details on what further actions may be warranted.

Some banking groups have called for temporary universal guarantees on all US bank deposits, a step that requires approval by Congress under expedited procedures. However, the conservative Republican House Freedom Caucus opposes expanding deposit guarantees beyond the FDIC’s current $250,000 limit per depositor, a major roadblock to swift action aimed at stemming a deeper crisis.

Guarantees for uninsured deposits in specific troubled banks would require Yellen, President Joe Biden and “supermajorities” of the Fed and FDIC board to determine that the bank qualifies for a “systemic risk exception” – actions taken in the SVB and Signature cases.

Yellen said the Fed’s new Bank Term Funding facility and discount window lending were working as intended to provide liquidity to the banking system and aggregate deposit outflows from regional banks have stabilized.

A move by large banks to deposit $30 billion into troubled First Republic Bank last week “represents a vote of confidence in our banking system,” Yellen added.

She also said it was important to maintain a “dynamic and diverse banking system” to support the U.S. economy, with large, mid-sized and small banks all playing a role to support households, small businesses and increasing competition in financial services.

Yellen said she was keeping in close contact with bankers, state and federal regulators, market participants and international counterparts about the banking situation.

She added that the situation was “very different” from the 2008-2009 global financial crisis, when subprime mortgage assets put many banks under stress.

“We do not see that situation in the banking system today. Our financial system is also significantly stronger than it was 15 years ago.”

The Treasury chief said that in coming weeks, regulators will examine the failures of Silicon Valley Bank and Signature Bank, “but we will need to reexamine our current regulatory and supervisory regimes and consider whether they are appropriate for the risks that banks face today.”

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Google suspends Chinese shopping app amid security concerns

Google has suspended the Chinese shopping app Pinduoduo on its app store after malware was discovered in versions of the app from other sources.

Google said in a statement Tuesday that it suspended the Pinduoduo app on the Google Play app store out of “security concerns” and that it was investigating the matter.

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The suspension of the Pinduoduo app –- mainly used in China –- comes amid heightened US-China tensions over Chinese-owned apps such as TikTok, which some US lawmakers say could be a national security threat. They allege that such apps could be used to spy on American users.

Pinduoduo is a popular e-commerce app in China which often offers discounts if users team up to buy multiples of an item. Google warned users Tuesday to uninstall any Pinduoduo app not downloaded from its own Play store.

“Google Play Protect enforcement has been set to block installation attempts of these identified malicious apps,” Google said in its statement. “Users that have malicious versions of the app downloaded to their devices are warned and prompted to uninstall the app.”

It was unclear if there are similar security concerns around the Pinduoduo app for Apple users, and Pinduoduo was still available to download from Apple’s iOS store Tuesday.

PDD Holdings Inc, which operates Pinduoduo, did not immediately comment. Hong Kong traded shares in the company tumbled 14.2 percent on Tuesday.

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