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Italian banks: The state steps in to rescue Monte dei Paschi di Siena

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FOR months, a bail-out had seemed likely; for weeks, unavoidable. On December 23rd it became fact. Monte dei Paschi di Siena, Italy’s third-largest bank and Europe’s most troubled, announced it had requested state help. The European Central Bank (ECB), Monte dei Paschi’s supervisor, had given it until the end of the year to find €5bn ($5.2bn) in equity, but the bank’s attempts to raise the money from the private sector failed. Paolo Gentiloni, Italy’s new prime minister, said that “today represents a turning-point [for the bank] and a reassurance for its depositors and its future”.
That is the hope. The Tuscan lender’s problems have been rumbling for years. In 2007 it ill-advisedly bought Antonveneta, another Italian bank, from Spain’s Santander for €9bn in cash; more tales of mismanagement have emerged since. Monte dei Paschi has already had two state bail-outs, and raised €8bn from share issues in 2014 and 2015. Its gross non-performing …

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Deutsche Bank: Germany’s biggest lender reaches a settlement with America’s Department of Justice

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WELL, it might have been worse. Early on December 23rd Deutsche Bank announced that it had reached a settlement “in principle” with America’s Department of Justice (DoJ), over claims that it had mis-sold residential mortgage-backed securities (RMBSs) in 2005-07, in the run-up to the financial crisis. Deutsche says the agreement is worth $7.2bn—a far cry from the $14bn that the DoJ demanded in September, sending Deutsche’s share price reeling. Credit Suisse said that it too had struck a deal, worth $5.3bn. However, the DoJ is suing Barclays, with which it had also been negotiating, and two of its bankers. Barclays says it will fight the complaint.
Deutsche, Germany’s biggest bank, has always insisted that it would not pay anything like as much as the DoJ had asked for. Although $7.2bn is more than analysts had expected, investors will probably see the deal as good news: Deutsche will fork out only—“only”—$3.1bn in cash and pay the rest as “consumer relief”, such as changes to borrowers’ loans, which will be spread over five …

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The other kind of immigration

IN MOST ways, it is a typical immigrant success story. Ouesseni Kaboréq was once a butcher in Burkina Faso, a poor, landlocked west African country. Encouraged by an uncle who was flourishing abroad, he left his country in search of better-paying work. He has done so well that he now employs 41 people. All but two are immigrants like him. The natives cannot bear to get their hands dirty, he says.

But Mr Kaboréq did not migrate to Paris or New Jersey. Instead he crossed just one land border, into neighbouring Ivory Coast. He works in the large meat market in Port Bouët, on the outskirts of Abidjan, near a store that demonstrates its classiness with a picture of Barack Obama on the awning. Mr Kaboréq is not the kind of immigrant whom economists obsess over, nor the kind who irks voters and brings populists to power in the West. But his kind is already extremely common, and is set to become more so.

International migration can be divided into four types. The most important is the familiar one, from developing countries to developed ones. About 120m people alive today have made such a move, calculates the McKinsey Global Institute, an arm…

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Where Malians move

Viewed from the West, Mali and Nigeria are both poor. In fact Mali is much poorer: its gross national income per head is barely one-quarter as high as Nigeria’s. The people who leave Mali in search of work seldom make it far. Most of the remittances sent to the country come from elsewhere in west Africa, although some come from France—the former colonial power. By contrast, wealthier Nigeria has a large diaspora that is spread across the rich world. They send the big bucks.

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