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More Than One-Third of Companies Aren’t Prepared for Anti-Financial Crime

Source: The Association of Certified Anti-Money Laundering Specialists and Oliver Wyman Survey

Only half of financial professionals surveyed believe that technology and automation have the necessary budget to address anti-financial crimes (AFC). AFC culture — the workplace norms and expectations related to processes and tools in place to address financial crimes — has significant room for improvement, according to a new survey by Oliver Wyman and ACAMS. 

Respondents expressed a relatively positive outlook on their company’s AFC culture in the past decade, with “73% agreeing that managers, peers and colleagues would withdraw from a business opportunity due to concerns about financial crime.” However, respondents also say there is room for improvement, with 36% of respondents claiming that their organization is ill-equipped to deal with AFC risk.  

Over the next year, respondents expect investment in AFC culture to increase, predominately in technology, training and resourcing. The survey findings show that to strengthen AFC culture, financial institutions need to focus on implementing and exemplifying change from the top, communicating changes effectively to the rest of the company, providing training and incentives for teams to follow the new lead, and holding themselves accountable to their commitments.

Incentives and Imperatives Fuel a ‘White Gold Rush’ in Lithium Mining

A combination of energy shortages, new electric vehicle incentives and action toward governmental climate adaptation goals has created a “white gold rush” for lithium. Global mining efforts for the metal have tripled since 2015 as global demand is expected to rise to three to four million metric tons by 2030.

A combination of energy shortages, new electric vehicle incentives and action toward governmental climate adaptation goals has created a “white gold rush” for lithium. Global mining efforts for the metal have tripled since 2015 as global demand is expected to rise to three to four million metric tons by 2030.

Currently, only five countries — Argentina, Chile, Bolivia, Australia and China — are responsible for nine-tenths of the world’s extraction of lithium. However, more nations and coalitions are aiming to hop on the train in order to meet the increasing need for the alkali metal, particularly in Europe. Businesses in Portugal, Germany, Austria and Finland are increasingly investing in conventional extraction operations, while France is touting the innovation of “green lithium,” which is produced from geothermal sources.

The expansion of lithium mining is critical for both the expanded production and controlled pricing of batteries in more sustainable consumer products. The cost of lithium-ion batteries dropped 88% over the past decade, though experts fear that shortages of raw materials could cause costs to spike over 20% in the next few years.

Surprising ‘Baby Bump’ Boosts Hope of Fertility Rate Improvement

Chart showing fertility rates

Source: NBER

Despite strong predictions that the COVID-19 pandemic would lead to a “baby bust,” new data demonstrates a more optimistic outlook. A new report from the National Bureau of Economic Research notes that an increase in births in 2021 represents “the first major reversal in declining U.S. fertility rates since 2007.” 

During the first year of the pandemic in 2020, official data showed U.S. births declining by 4%, hitting their lowest level since 1979. Combined with the impact of travel lockdowns on foreign-born mothers — who accounted for 23% of U.S. births in 2019 — researchers anticipated that as many as half a million fewer babies would be born in the U.S. as a result of the pandemic. However, U.S.-born mothers — particularly those aged 25 and younger and college-educated women aged 30-34 — ended up raising the total fertility rate for 2021 by 6.2% over the pre-pandemic trend.

Such findings, while they are focused on the United States, are heartening short-term news for social scientists who have spent most of this year projecting that the global population will peak later this century. A rebound in fertility rates may potentially have a positive effect on connected social metrics such as school enrollment, labor force participation and entitlement viability.

Are All Countries Representing Their GDPs Accurately?

Source: The Economist

The economies of non-democratic countries have been growing twice as fast as countries with democracies, according to official gross domestic product figures, since 2002. But new research using satellite imagery reveals that non-democratic regimes exaggerate annual GDP growth by approximately 35%.

Assistant professor Luis Martinez, from the University of Chicago, used satellite imagery to determine the brightness of a country’s lights at night, which strongly correlates with economic activity. In growing economies, more areas are lit up over time, whereas regions of conflict are darker, according to the IMF. Martinez found that even with the same amount of night-time light growth, autocracies reported higher GDP than democracies.

On average, autocratic countries reported GDP growth of 147%. But satellite data puts that GDP growth closer to 76%. Further research shows that differences between reported numbers and satellite data were more prevalent in more-easily manipulated figures like investment and government spending.

Only five democratic countries appeared on the list of the 20-fastest growing economies between 1992 and 2013, according to official numbers.

“If we rely only on the self-reported data, we’d conclude that autocracies are dramatically outperforming democracies economically,” said Martinez in an interview. “But when you adjust the data based on my model, you get a much more nuanced picture: Democratic countries actually account for 10 of the 20 fastest-growing economies.”

Climate Implications Driving Changes in Cryptocurrency Mining

While Bitcoin-related emissions hit an all-time high in 2021, they dropped 14% this year.

Source: Financial Review

Bitcoin’s impact on the environment is equivalent to gold mining, say researchers from the University of Cambridge. The process of mining Bitcoins uses large amounts of electricity, primarily from fossil fuels like coal and natural gas. Because of these fossil fuels, Bitcoin mining contributed 0.1% to total global emissions in 2019, similar to that of countries like Chile or Bahrain. While Bitcoin-related emissions hit an all-time high in 2021, they dropped 14% this year. The decline is due to a significant decrease in mining profitability (and therefore energy use).

But other experts say that cryptocurrency’s climate impact is less like gold mining and more like beef production, according to a new paper from the University of New Mexico. The researchers estimated that every Bitcoin mined in 2021 under the proof of work method added 113 metric tons of carbon dioxide to the atmosphere — a 126-fold increase from the 0.9 metric tons per Bitcoin in 2016. In contrast, blockchain competitor Ethereum claims to have reduced its energy consumption by 99% by switching from proof-of-work to the proof-of-stake model.

“We find no evidence that Bitcoin mining is becoming more sustainable over time,” said UNM associate professor of economics Benjamin A. Jones in a press release. “Rather, our results suggest the opposite: Bitcoin mining is becoming dirtier and more damaging to the climate over time.” 

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