Rating agency Fitch Ratings downgraded Ethiopia’s credit rating on Thursday to junk status. (bad), suggesting an “increased probability” of non-payment. The East African country has not paid the coupon on its unique euro bond outstanding, for a billion dollars, which was due to mature on December 11, declaring last week that it was unable to perform payment. Fitch said it would downgrade Ethiopia to “DR” (restricted default) if she did not pay the coupon within a 14-day grace period. A default on a very modest sum (33 million dollars in interest). The Ethiopian state still benefits from a grace period of two weeks before being officially declared in default of payment. Read more: Africa News
Financial regulators in the United States have named artificial intelligence (AI) as a risk to the financial system for the first time. In its latest annual report, the Financial Stability Oversight Council said the growing use of AI in financial services is a “vulnerability” that should be monitored. While AI offers the promise of reducing costs, improving efficiency, identifying more complex relationships and improving performance and accuracy, it can also “introduce certain risks, including safety-and-soundness risks like cyber and model risks,” the FSOC said in its annual report released on Thursday. The FSOC, which was established in the wake of the 2008 financial crisis to identify excessive risks in the financial system, said developments in AI should be monitored to ensure that oversight mechanisms “account for emerging risks” while facilitating “efficiency and innovation”. Authorities must also “deepen expertise and capacity” to monitor the field, the FSOC said. Read more: Al Jazeera
U.S. Treasury Secretary Janet Yellen underscored her priorities aimed at stabilizing frigid ties between the United States and China late Thursday. Yellen, in prepared remarks for a dinner hosted by the U.S.-China Business Council, said “continuing to stabilize our relationship to prevent escalation won’t make news. But our economies, our people — and, again, also economies and people around the world — will be safer and more secure.” “This is what it means for the U.S. and China to build and responsibly manage our relationship,” she said, adding that she has plans to visit China for a second time as Treasury Secretary. She first visited China as Treasury Secretary in July. Yellen acknowledged that the two countries “strongly disagree” on many areas and there are “risks of shocks” that could impact both. Read more: CNBC
Ukraine has moved one step closer to European Union membership after leaders in Brussels agreed to open negotiations with the war-torn nation. In a surprise announcement late Thursday, EU summit chair Charles Michel, who is the European Council president, said leaders had decided to start accession talks with Ukraine and Moldova. “The European Council has decided to open accession negotiations with Ukraine & Moldova,” he said via X, formerly Twitter. Details of the agreement were not immediately clear and there was no confirmation on whether talks would start now or in March. European heads of state had been gearing up for a difficult two-day gathering where support for Ukraine is at the top of the agenda. The meeting comes at a crunch time for Ukraine, as President Volodymyr Zelenskyy hops across the world seeking further aid in the fight against Russia’s invasion. Read more: CNBC
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