An automated teller machine. The cash machine. In Britain, a cashpoint. ATMs, known for spitting out $20 bills (and imposing fees if you pick the wrong one), turn 50 years old this year. They’re ubiquitous – and possibly still a necessity, despite the big changes in how people pay for things.

It was a radical move when Barclays installed cash machines in a London suburb in 1967. The utilitarian machine gave fixed amounts of money, using special vouchers – the magnetic-striped ATM card hadn’t been invented yet. There was no way for a customer to transfer money between accounts, and bank employees tabulated the transactions manually at the end of each day.

As the ATMs became familiar, though, they changed not only the banking industry but made people comfortable interacting with kiosks in exchange for goods. Now that means getting movie tickets and boarding passes, self-checkout at grocery stores, and online shopping that brings products to your door with a few clicks. All are based on the idea that people can handle routine transactions by themselves without a teller or cashier.

“The ATM tapped into that innate force in people that gives gratification for doing a task on their own and it grew from there,” said Charles Kane, a professor at the MIT Sloan School of Management.

It was a radical concept at the time. The ATM wasn’t the first self-service device – vending machines and the automat had been popular before. But those dispensed items people could hold in their hand.

Bernardo Batiz-Lazo, a business professor and ATM historian (yes, they exist!) at Bangor University in Britain, said early users of automated tellers were often checking their balances twice: once to see how much was in their account, then again after withdrawing money to see if it registered.

“They were popular, but it took a long time to slowly convince customers to learn about ATMs and use them regularly,” Batiz-Lazo said.

For the banking industry, ATMs meant banks could be in thousands of places at once, not just in branches, and earn billions of dollars in fees from non-customers. Banks used to staff dozens of tellers at each branch to handle routine transactions, now many staffers work on other tasks, like sales or account maintenance.

Around the U.S. today are roughly 3 million cash machines, according to the ATM Industry Association. Most are actually not owned by banks, but by private companies that install them at convenience stores, restaurants and bars in hopes of grabbing customers who don’t want to find a bank branch.

The wide acceptance of the ATMs changed the types of cash Americans typically carry in the pocketbooks. Since ATMs became more widely available in the early 1980s, the twenty-dollar bill has regularly been the second-most printed bank note each year by the Bureau of Engraving and Printing. The first place spot is held by the $1 bill.

Even as people use cash less, and credit cards or mobile payments more often, the ATM isn’t going anywhere for a while. At least, that’s what historians and – unsurprisingly – the ATM industry says. Devon Watson, vice president at Diebold Nixdorf, the world’s largest manufacturer of ATMs, says 85 percent of all transactions worldwide are still in cash.

Newer ATMs have more functions than ever. They accept check deposits, can transfer money between accounts, show an account balance, pay a credit card or mortgage payment, or even sell you stamps. NCR, another major manufacturer of ATMs, say the latest models are also designed to act more like smart devices. Kevin King of NCR says that includes “swipe, gesture, multi-touch.”

And future ATMs will likely start selling products as well. Have a checking account? The ATM will ask you whether you want to open a brokerage account. Much like tellers did.
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French labor unions staged fresh protests against President Emmanuel Macron’s contested labor law reforms Thursday — a day before he adopts them by executive order.

The nationwide action backed by the powerful, hard-left CGT trade union, saw protesters take to the streets in the second round of public opposition to the long-touted reforms that will give more power to employers to hire and fire workers. Macron says that’s needed to power the stagnant French economy and boost jobs.

In cities across the country, demonstrators waved anti-capitalist placards and angry personal messages against Macron, whose popularity has recently taken a hit.

In Paris, demonstrators brandishing posters reading “The state ruins the people” marched past the posh La Rotonde restaurant where Macron was branded arrogant for prematurely celebrating his victory in the first round of the elections before he had won the presidency.

The latest protests come a week after hundreds of thousands of protesters — half a million, according to the unions — took to the streets in the first major challenge to Macron’s fledgling presidency.

Macron is waving away the opposition and his government is pressing ahead with the labor reforms, backed by a robust majority in parliament.

 
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The number of Americans seeking unemployment benefits dropped by 23,000 last week to 259,000 as the economic impact of Hurricane Harvey began to fade.

The Labor Department said Thursday that the less-volatile four-week average rose by 6,000 to 268,750. Overall, nearly 2 million Americans are collecting jobless aid, down almost 6 percent from a year ago.

In early September, jobless claims shot up by the most in five years as Harvey battered Texas. But last week claims in Texas fell 45 percent as more people returned to work. Hurricane Irma continued to have an impact on the job market in Florida, where claims more than doubled from the previous week.

Despite the weather shocks, claims nationwide remain low by historic standards. New weekly claims have remained below 300,000 for the longest stretch going back to 1970.

Claims are a proxy for layoffs, and most employers are confident enough to be holding onto staff. Unemployment is near a 16-year low at 4.4 percent. Employers are adding an average 176,000 jobs a month so far in 2017, down from 187,000 last year and 226,000 in 2015. Some businesses say the job market is so tight that they can’t find workers to fill job openings.
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The federal agency responsible for ensuring that markets function as they should and for protecting investors was hacked last year and the intruders may have used the nonpublic information they obtained to profit illegally.

The disclosure arrived two months after a government watchdog said deficiencies in the computer systems of the Securities and Exchange Commission put the system, and the information it contains, at risk.

In July, the Government Accountability Office issued a critical report about the security measures employed by the SEC, citing a number of deficiencies in “the effectiveness of SEC’s controls for protecting the confidentiality, integrity, and availability of its information systems.” It issued 26 recommendations that it said would make SEC systems more secure.

According to the SEC, the breach was discovered last year, but the possibility of illicit trading was uncovered only last month. It did not explain why the hack itself was not revealed sooner, or which individuals or companies may have been impacted.

In a prepared statement, SEC Chairman Jay Clayton said a review of the agency’s cybersecurity risk profile determined that the previously detected incident was caused by “a software vulnerability” in its filing system known as EDGAR, short for Electronic Data Gathering, Analysis, and Retrieval system. Clayton said SEC has been conducting an assessment of its cybersecurity since he took over as chairman in May.

The SEC files financial market disclosure documents through its EDGAR system, which processes more than 1.7 million electronic filings in any given year. Those documents can cause enormous movements in the market, sending billions of dollars in motion in fractions of a second.

The revelation from the critical agency comes as Americans grapple with the repercussions of a massive, months-long hack at the credit agency Equifax, which exposed highly sensitive personal information of 143 million people. Clayton said the agency’s breach did not result in exposing personally identifiable information.

The SEC hasn’t said whether it is investigating the hack at Equifax, but the agency for years has leaned on publicly traded corporations to strengthen their own cybersecurity systems.

An investigation into the breach and its possible consequences is ongoing, and the SEC said that it is cooperating with the “appropriate authorities.”

 
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The Standard & Poor’s rating agency cut China’s credit rating Thursday due to its rising debts, highlighting challenges faced by Communist leaders as they cope with slowing economic growth.

The downgrade added to mounting warnings about the dangers of increasing Chinese debt, which has fueled fears of a banking crisis or a drag on economic growth. Moody’s Investors Service cut its own rating for China in May.

S&P lowered its rating on China’s sovereign debt by one notch from AA- to A+, still among its highest ratings. The agency had given a warning sign of a possible downgrade in March 2016 when it changed China’s outlook to negative.

“A prolonged period of strong credit growth has increased China’s economic and financial risks,” S&P said in a statement. “Although this credit growth had contributed to strong real GDP growth and higher asset prices, we believe it has also diminished financial stability to some extent.”

The ratings cut, announced after Chinese financial markets closed for the day, could raise Beijing’s borrowing costs slightly, but the more significant impact is on investor sentiment.

Phone calls to the Chinese Finance Ministry were not answered. After the Moody’s downgrade in May, the ministry said the agency had used improper methods and misunderstood China’s economic difficulties and financial strength.

Communist leaders have cited reducing financial risk as a priority this year. They have launched initiatives to reduce debts owed by state companies, including by allowing banks to accept stock as repayment on loans. But private sector analysts say they are moving too slowly.

Beijing relied on repeated infusions of credit to prop up growth after the 2008 global crisis.

That helped propel total nongovernment debt to the equivalent of 257 percent of annual economic output by the end of last year, according to the Bank for International Settlements. That is unusually high for a developing country and up from 143 percent in 2008.

Chinese economic growth fell from 14.2 percent in 2007 to 6.7 percent last year, though that still was among the world’s strongest.

The government is trying to make the economy more productive by giving market forces a bigger role. It is trying to shrink bloated industries such as steel and cement in which supply exceeds demand, which has depressed prices and led to financial losses.

Beijing is trying to steer the economy to slower, more sustainable growth based on domestic consumption instead of investment and exports. But growth has dipped faster than planners wanted, raising the risk of politically dangerous job losses. Beijing has responded by flooding the economy with credit.

Official efforts to rein in debt “could stabilize the trend of financial risk in the medium term,” S&P said. “However, we foresee that credit growth in the next two to three years will remain at levels that will increase financial risks gradually.”

S&P kept its outlook for China stable. It said that reflected expectations the country will “maintain robust economic performance over the next three to four years.”

“We may raise our ratings on China if credit growth slows significantly and is sustained well below the current rates while maintaining real GDP growth at healthy levels,” S&P said. “A downgrade could ensue if we see a higher likelihood that China will ease its efforts to stem growing financial risk and allow credit growth to accelerate to support economic growth.”

 
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The U.S. Federal Reserve left interest rates unchanged on Wednesday but signaled it still expects one more increase by the end of the year despite a recent bout of low inflation.

The Fed, as expected, also said it would begin in October to reduce its approximately $4.2 trillion in holdings of U.S. Treasury bonds and mortgage-backed securities acquired in the years after the 2008 financial crisis.

New economic projections released after the Fed’s two-day policy meeting showed 11 of 16 officials see the “appropriate” level for the federal funds rate, the central bank’s benchmark interest rate, to be in a range between 1.25 percent and 1.50 percent by the end of 2017, or 0.25 percentage points above the current level.

U.S. bond yields rose, pushing up the U.S. dollar after the Fed’s decision, but U.S. benchmark stock indexes were little changed.

U.S. benchmark 10-year Treasury note yields rose as far as 2.29 percent, the highest since August 8, a move which helped push bank stock prices higher also.

“The Fed took another step on its path of beautiful normalization, announcing that the gradual balance sheet reduction will start next month and limiting revisions to both projections and policy guidance,” said Mohamed El-Erian, Chief Economic Adviser at Allianz, in California.

In its policy statement, the Fed cited low unemployment, growth in business investment, and an economic expansion that has been moderate but durable this year as justifying it’s decision. It added that the near-term risks to the economic outlook remained “roughly balanced” but said it was “closely” watching inflation.

Inflation mystery

Fed Chair Janet Yellen said in a press conference after the end of the meeting that the fall in inflation this year remained a mystery, adding that the central bank was ready to change the interest rate outlook if needed.

“What we need to figure out is whether the factors that have lowered inflation are likely to prove persistent,” she said. If they do, “it would require an alteration of monetary policy,” Yellen said.

While the interest rate outlook for next year remained largely unchanged in the Fed’s latest projections, with three rises envisioned in 2018, the U.S. central bank did slow the pace of anticipated monetary tightening expected thereafter. It forecasts only two increases in 2019 and one in 2020. It also lowered again its estimated long-term “neutral” interest rate from 3.0 percent to 2.75 percent, reflecting concerns about overall economic vitality.

“The US Federal Reserve has firmly signaled that a December rate rise is still on the table,” said Luke Bartholomew, of Aberdeen Standard Investments Investment Strategist in London.

“Clearly the Fed still believes that lower unemployment will eventually translate into a pick-up in inflation, but if inflation continues to undershoot it is hard to see the Fed following through on a hike,” he said.

Fed bond portfolio to shrink from October

The Fed, as expected, also said it would begin in October to reduce its approximately $4.2 trillion in holdings of U.S. Treasury bonds and mortgage-backed securities by initially cutting up to $10 billion each month from the amount of maturing securities it reinvests.

That action will start a gradual reversal of the three rounds of quantitative easing, or bond buying, the Fed pursued between 2008 and 2014 to stimulate economic growth after the 2007-2009 financial crisis and recession.

The limit on reinvestment is scheduled to increase by $10 billion every three months to a maximum of $50 billion per month until the central bank’s overall balance sheet falls by perhaps $1 trillion or more in the coming years.

Yellen said it would take a “a material deterioration” in the economy’s performance for the Fed to reverse a schedule that she expects to proceed “gradually and predictably.”

Balancing act

The policy statement and accompanying projections showed the Fed still in the middle of a balancing act between an economic recovery that has kept U.S. unemployment low and is gaining steam globally and a recent worrying drop in U.S. inflation.

Three of the hawkish policymakers appeared to move their expected policy rate down to account for only one more hike by the end of 2017, leaving a core 11 clustered around a likely December increase. The Fed has raised rates twice this year.

The Fed noted that the recent hurricanes in the United States would affect economic activity but are “unlikely to materially alter the course of the national economy over the medium term.”

Forecasts for economic growth and unemployment into 2018 and beyond were largely unchanged. Gross domestic product is now expected to grow at a rate of 2.4 percent this year, 2.1 percent next year and 2.0 percent in 2019.

The unemployment rate is forecast to remain at 4.3 percent this year before falling to 4.1 percent next year and remaining there in 2019.

Inflation is expected to remain under the Fed’s 2 percent target through 2018 before hitting it in 2019. There were no dissents in the Fed’s policy decision.
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Brazil’s President Michel Temer said on Wednesday state-run oil company Petroleo Brasileiro, a symbol of national sovereignty, would stay in public hands even as his government makes an aggressive privatization push.

Temer, speaking at a Reuters Newsmaker event in New York, also said that sprawling investigations that have led to corruption charges against scores of powerful figures — including him — show that Brazil’s governmental institutions are independent and working well.

Increase in confidence

The leader of Latin America’s largest nation said the fight against corruption was giving investors more confidence to do business in Brazil and this was being reflected in the nation’s benchmark stock index trading near all-time highs.

“It was an important and daring decision to open Eletrobras capital to private investors,” Temer said, referring to a decision announced last month to sell a controlling stake in Centrais Eletricas Brasileiras SA, Brazil and Latin America’s largest utility.

Inviting outside investment in Brazil is part of business-friendly Temer’s plan to help the country recover from its deepest recession and to provide much-needed funds to bridge its gaping budget deficit.

However, he ruled out a similar step with the state oil company, known as Petrobras, saying it held “a very strong symbolism” of national sovereignty for Brazilians. “Naturally, we are not thinking of privatizing it,” he said.

‘Not worried’

Temer has been charged with graft based on the plea-bargain testimony of the owners of the world’s largest meatpacker, JBS SA. They accused him of taking bribes in return for political favors and of conspiring to buy the silence of a witness who could implicate the leader.

Temer has repeatedly said he is innocent of any wrongdoing.

He said at the Reuters event he was not concerned about being charged with racketeering and obstruction of justice last week.

“These accusations must be investigated, but I am not worried about this in the least,” he said.

Court approves new charges

Shortly after Temer spoke, a majority of the judges on Brazil’s Supreme Court voted to send the new charges against him to the lower house of Congress, which must authorize any trial against a sitting president.

Last month, the chamber blocked an earlier corruption charge against him and Temer and his allies are confident the new ones will also be blocked by the chamber. But they acknowledge that the government’s reform agenda will be delayed while it spends time and energy defending the president.

During the wide-ranging, 45-minute discussion at the headquarters of Reuters, Temer also said that the Mercosur trade bloc of South American nations hopes to reach a trade deal with the European Union by the end of the year.

Openness praised

Investors attending the event praised Temer’s openness about the corruption cases against him and for his determination to pass a pension reform bill, even though the president gave no indication of when that could happen.

The bill is Temer’s main measure to plug the budget deficit that cost Brazil its hard-won investment credit rating grade two years ago. Analysts expect the bill to be watered down to its bare bones to be able to clear Congress this year.

“That’s enough to keep markets satisfied and to fend off a number of downgrades in credit ratings,” said Alejo Czerwonko, emerging markets strategist at UBS AG.

 
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Latin American cloud forests, energy-saving street lights in Rio de Janeiro and sustainable cattle ranching in the Amazon will get a boost from new financial instruments to channel capital for tackling climate change, their backers said.

The Lab, a network of programs that incubates sustainable finance mechanisms, expects to attract an initial $855 million to six investment vehicles launched in New York on Wednesday, and is hoping to pull more private capital into its projects.

Barbara Buchner, a climate finance expert who directs The Lab, told the Thomson Reuters Foundation mainstream investors have shown growing interest in climate change projects in the past couple of years.

“The next challenge is to get them beyond the markets they’re now comfortable with,” she added, citing potential in land use, agriculture and adapting to climate change impacts.

Various partners

The Lab, set up in 2014, raised $822 million for its earlier initiatives, with around half coming from private investors.

It works with governments, philanthropic foundations, development banks and private sector investors, including asset manager BlackRock Inc. and Deutsche Bank.

The latest projects were required to address climate issues in an innovative way, be commercially viable and not be hamstrung by regulatory hurdles, said Buchner.

The instruments to be rolled out by The Lab include the Cloud Forest Blue Energy Mechanism, which aims to restore 60 million hectares of Latin American cloud forest through a scheme that would improve water security and hydropower profits while helping suck carbon from the atmosphere.

And a private equity fund aims to be the first to invest in climate change adaptation technologies for developing countries.

In Brazil, which has suffered a funding shortfall for green action, the Climate Smart Cattle Ranching scheme is seeking to raise $200 million for projects designed to restore damaged grazing land and reduce deforestation in the Amazon, targeting more than 300,000 hectares in the first five years.

Also in Brazil, the Green Receivables Fund (Green FIDC) will provide lower-cost capital to renewable-energy and energy-efficient projects, including a street-lighting scheme in Rio de Janeiro.

Renewable power

Another Brazilian fund plans to cut agricultural energy costs by up to 20 percent by boosting off-grid renewable power.

“Finance is critical to implementing Brazil’s goals to increase renewable energy [and] energy efficiency, and move toward sustainable land use,” said Jose Antonio Marcondes de Carvalho, a top environment official with Brazil’s Ministry of Foreign Affairs.

The new Lab instruments will help Brazil achieve its climate change and sustainable development goals, he added.

Buchner said The Lab was moving beyond a focus on initiatives that directly cut planet-warming emissions.

“There are some really good projects in other areas that can help address some of the sectors where we really need to scale up,” if the world is to meet its target to keep global warming within 2 degrees Celsius above pre-industrial times, she said.
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