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Facebook is referring Trump ban to its Oversight Board

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President Donald Trump speaks to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C., U.S., on Wednesday, Jan. 20, 2021.

Al Drago | Bloomberg | Getty Images

Facebook on Thursday announced that it will refer its decision to indefinitely suspend the account of former President Donald Trump to its newly instituted Oversight Board.

The independent body, which has been described as Facebook’s “Supreme Court,” will review the decision to suspend Trump and make a binding decision on whether the account will be reinstated. Until a decision is made, Trump’s account will remain suspended, the company said in a blog post.

The board will begin accepting public comments on the case next week, it said in a tweet. It will have up to 90 days to make its decision, but its members have committed to move as quickly as possible, a spokesman for the body told CNBC. A decision can’t be overruled by CEO Mark Zuckerberg or other executives.

After Trump’s comments on social media led to an insurrection at the U.S. Capitol on Jan. 6 that resulted in the death of five people, Facebook said it hopes that the board will uphold its Jan. 7 decision to indefinitely suspend Trump.

“We believe our decision was necessary and right,” Facebook said in a blog post. “Given its significance, we think it is important for the board to review it and reach an independent judgment on whether it should be upheld.”

The company’s Oversight Board was launched in October with the premise of reviewing difficult content moderation decisions. The Facebook Oversight Board is made up of scholars, journalists and former lawmakers from around the world. This will be the board’s first major case.

Nominations are open for the 2021 CNBC Disruptor 50, a list of private start-ups using breakthrough technology to become the next generation of great public companies. Submit by Friday, Feb. 12, at 3 p.m. EST.



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IATA app could restart quarantine-free, international flights

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People wait for passengers at one of the International Arrivals halls at London Heathrow Airport in west London on February 14, 2021

JUSTIN TALLIS | AFP | Getty Images

A new app, set to launch within weeks, could mark the first step in resuming quarantine-free international travel.

The International Air Travel Association (IATA) travel app will allow governments and airlines to digitally collect, access and share information on the status of individual passengers’ Covid-19 test and vaccination.

The industry body, of which 290 airlines are members, said the tool will bring greater “efficiency” to health documentation checks, while speeding up the recovery of the hard-hit travel sector.

“It’s really about digitizing an existing process,” Nick Careen, IATA’s senior vice president for airport passenger cargo and security, told CNBC Wednesday.

If we do manual processing, we will come to a grinding halt the minute we begin to see a restart.

Nick Careen

senior vice president (APCS), IATA

“This is the way forward, because if we do manual processing, we will come to a grinding halt the minute we begin to see a restart,” he said.

Singapore Airlines will be the first carrier to pilot the tool on an end-to-end London Heathrow route. Thirty other airlines, including Air New Zealand, as well as Emirates and Etihad in the UAE, are set to conduct trials through March and April.

IATA is not alone in developing so-called digital health passports intended to restart cross-border travel. International agencies, governments and tech companies are all also pitching in. But Careen said he hopes the app will establish a “minimum set of requirements” to allow for greater interoperability.

“Eventually you’ll see multiple people in this space,” he said, “but we’re setting the baseline in terms of what the standard needs to be.”

With the new app and continued vaccine rollouts, the global airline association estimates that travel could reach around 50% of 2019 levels by the end of this year.

Analysts had previously expected a greater pick up in travel in early 2021, but the continued spread of the virus and the emergence of new strains have pushed back those expectations.

“That’s the current economic forecast,” said Careen. “There’s a lot of variables that play into that.”

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Bitcoin (BTC) surges back above $50,000 after more buying from Square

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Bitcoin virtual crypto currency price is displayed on a phone screen in this photo.

STR | NurPhoto | Getty Images

Bitcoin’s price roared back Wednesday after a sharp sell-off, climbing above $50,000 again as Square announced it had purchased $170 million worth of the cryptocurrency.

At 4 a.m. ET, the world’s most valuable digital coin surged 7.5% to a price of $50,683, according to data from Coin Metrics. The cryptocurrency climbed as high as $51,369 a few hours earlier.

Other cryptocurrencies also got a boost, with ether and XRP climbing 11.3% and 7.4% respectively. So-called altcoins, or alternative cryptocurrencies, often climb in times of strength for bitcoin.

On Tuesday, Square announced it had bought 3,318 bitcoins at an average price of around $51,235. The fintech company, which is run by Twitter CEO Jack Dorsey, said bitcoin now represents about 5% of its total assets.

It’s not the first time Square has invested in bitcoin — the firm bought $50 million worth of the digital currency last year. Dorsey is one of bitcoin’s most well-known proponents, having once said he believes it will eventually become the “single currency” of the internet.

Bitcoin had a rough start to the week, slumping from a record high of $58,356 Sunday to as low as $45,501 on Tuesday. It’s not unusual for bitcoin to undergo wild bouts of volatility — the digital token infamously climbed to nearly $20,000 in 2017 before entering a bear market the following year.

Bitcoin is still up more than 70% year-to-date and over 400% in the last 12 months. The crypto asset’s stunning rally has garnered the attention of everyone from Tesla CEO Elon Musk to U.S. Treasury Secretary Janet Yellen.

Earlier this week, Yellen called bitcoin an “extremely inefficient” means of payment and warned about its use in illicit activity.

“It is a highly speculative asset and … I think people should be aware it can be extremely volatile,” the former Federal Reserve chair said at a New York Times DealBook conference. “I do worry about potential losses that investors can suffer.”

Musk, meanwhile, has come out as a believer in bitcoin. His electric car company recently invested $1.5 billion of corporate cash into the cryptocurrency, and the billionaire tech entrepreneur said he thinks it could be “on the verge of getting broad acceptance” among conventional financial services firms.

But even Musk has suggested bitcoin’s current price levels could be unsustainable, tweeting over the weekend that he thinks the prices of bitcoin and rival token ether “seem high.”

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Climate risks not priced in bond markets, a risk for many countries

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A man uses a snow blower during a winter storm in New York, on February 18, 2021.

ANGELA WEISS | AFP | Getty Images

LONDON — Climate change could lead to a significant rerating in some financial markets the moment that investors start taking the risks more seriously, experts have told CNBC.

The interest rates on debt payments can be a reflection of how much risk is associated with a particular country or company over a particular period of time. The higher the bond yield, the higher the risk in owning that bond and therefore the costlier it will be for a certain firm or government to get new funding.

And there are growing concerns that today’s bond yields are not fully reflecting the looming impact of climate change, and associated regulation, on both countries and companies.

As one expert put it: investors think of the “here and now.” This means that they are not fully pricing in climate risks, because, “short of a climate disaster, (climate change) is a problem, but a slow storm that’s brewing,” Marchel Alexandrovich, a senior European economist at Jefferies, told CNBC on Friday.

A report by the German Environment Agency in 2020 found that the effects of climate change on foreign trade could be as much of a hit on the German economy as the domestic risks coming from climate change. Germany is after all Europe’s top exporter. Yet German bonds are considered to be among the safest financial assets in the world.

“I am not sure this is fully reflected at present,” Bryn Jones, head of fixed income at Rathbones, told CNBC via email about climate risks. “However increasingly more so. The recent downgrade of some oil majors due to climate risk by rating agencies is an indication that the risks are building,” he added.

This means big costs for the firms, but also countries that rely a lot on these reserves.

Zacharias Sautner

professor at the Frankfurt School of Finance

There has been an increasing focus on so-called green investments. Environmental, social and corporate governance factors — known as ESG — have been gaining traction within the investment community, particularly in the wake of the coronavirus pandemic.

In addition, central bankers are also turning their attention to climate change. The European Central Bank is currently exploring how to be “effective in the fight against climate change,” which could result in a change to some of its policies.

“We would need to measure adequately what is green and what is brown and if we push for that it will have a big impact in itself,” a member of the ECB’s Governing Council told the Financial Times earlier this month. “Brown” investments generally refers to the idea that an investment is not good for the environment.

Zacharias Sautner, professor of finance at the Frankfurt School of Finance, told CNBC that the ECB’s policy review, together with countries’ climate targets, could trigger “a full reflection of climate risks in markets.”

More and more governments are announcing targets to become a net-zero emitter in the coming decades. For instance, U.S. President Joe Biden has vowed to make the country’s electricity production carbon-free by 2035 and to have a net-zero emissions economy by 2050. These policy pledges have an impact on how firms operate.

What a pricing-in could look like

“The risks to companies manifest themselves in that the cost of financing increases and the idea would be that the climate risks would therefore force these business either out of business or to transition into innovation that is expected to move the globe to net zero and keep the cost of financing at levels that mean they can maintain themselves as a going concern,” Jones from Rathbones said on Tuesday.

Forcing firms to go out of business or to change their operations significantly could lead to sharp market moves.

“Huge amounts of known coal, oil, and gas reserves should remain unused to 2050 to meet the 2 (degree Celsius) target,” Sautner said via email in reference to the Paris Climate Agreement, which saw as many as 197 countries pledging to limit global warming to “well below” 2 degree Celsius, compared to pre-industrial levels.

“This means big costs for the firms, but also countries that rely a lot on these reserves, due to the lower taxes, higher unemployment etc,” he added. All in all, the firms with the highest reserves of coal, oil and gas “will have problems, but also the countries in which they are located.”

Climate risks could therefore translate into higher government bond yields too.

The U.S., Russia, Australia, China and India are among the nations with the largest reserves of these resources.

Could it trigger a debt crisis?

“I don’t think climate risk considerations on their own will trigger a crisis in the sovereign bond market. But there will be differences in terms of how badly the individual countries are exposed to climate change and the damage it may do to their trend growth or to debt/GDP ratios,” Alexandrovich from Jefferies said.

Much of the Netherlands, for example, is built below sea-level, which means it could be vulnerable to rising water levels. Climate change will have, and is already having, a direct impact on many nations, alongside new regulations and a change in investors’ mindsets.

According to the University of Notre Dame, the U.S., India, Saudi Arabia, the UAE and Luxembourg are among the most vulnerable nations to climate change, when adjusted for their GDP.

Experts warned that once countries’ bond prices fully reflect climate risks, yields could be much higher and these nations could find it harder to balance their books.

“I do not expect a sudden debt crisis in sovereign bonds due to climate change, but there will for sure be substantial effects over the next years for countries that do not act,” Sautner added.

“We know from research, including my own, that climate risks are increasingly getting priced in financial markets, and bond markets are no exception here. But I believe that we do not yet see a full reflection of climate risks in markets.”

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