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The Plunge Felt Around the World: Wall Street Panics After 1,000-Point Drop

August 25, 2015 – Yesterday, Wall Street experienced a history-making intraday point drop, its biggest ever as it dropped 1,089 points at the opening bell. According to Fox Business, by close of day, all three major U.S. averages were in correction territory, though well off session lows.

Traders raced into safe-haven assets as fears over the instability in China and other emerging markets mounted. Dubbed “Black Monday” in China, where Chinese stocks recorded their biggest slump in almost a decade, stock market jitters spread throughout the globe as stock markets in the United Kingdom, Germany, France, Italy, and Spain also plummeted. It was reported that China’s Shanghai Composite Index lost 8.5%. Japan, Korea, Hong Kong, and Australia all closed more than 4% down, while markets in Saudi Arabia, Dubai, Egypt, and Israel declined sharply.

Market analysts described the chaos as a “China-driven micro panic,” reporting that global equities have seen more than $5 trillion wiped from their value since China devalued its currency two weeks ago.

Some are calling the Black Monday panic irrational (the Dow managed to close with only a 195-point drop). Wall Street experts offered several reasons not to panic about the market’s downturn, but the lack of confidence among investors is troubling speculators, who began selling vulnerable assets.

According to Yahoo! Finance, Chinese stocks tumbled again this morning despite the rebound in other Asian markets, “as investors despaired at the lack of policy action from Beijing in response to recent data suggesting the downturn in the world’s second-largest economy is deepening.” Many analysts are predicting a continued deceleration, rather than a crash, for China’s economy, and are cautioning patience as companies reassure investors about the economy.

The overall effects, however, will ultimately be that investors will be more watchful with their investments, and many will perceive that caution as stunted growth. This market correction, however, is necessary every so often, as Chinese stocks have been wildly overvalued for a while.


“China’s ‘Black Monday’ felt on stock markets around the world.” News.Com.AU, 25 August, 2015. Web. 25 August 2015.

South Africa’s Economy Unsettled in Changing Financial Climate

August 24, 2015 – Back in July, it was reported that the South African Reserve Bank (SARB) was hinting at a rate increase to curb inflationary pressures. One source commented, “The benchmark interest rate the Brics group nation is 5.75%, and if an increase materialises this week, it could be of 25 basis points margin. The SARB meeting is on 21-23 July and the announcement will be at the end of the meeting.” The SARB raised domestic rates for the first time in a year due to a weaker rand, which has declined nearly 10% against the dollar.

As of August, South Africa’s economy is facing a turbulent patch as financial policies are being complicated by interest rate normalisation in the United States and a slowdown in China’s growth.

Meanwhile, unemployment has been rising in South Africa over the past five years, and currently stands at a ten-year high of 34.9%. According to The Guardian, South Africa is “struggling to escape the effects of the global financial crisis and mining companies – one of South Africa’s key economic sectors – are laying off workers in response to falling commodity prices.”

Many are wondering how the economy of the nation is going to bounce back amidst the turmoil created in the wake of the changing financial climate, citing methods from attempting to solve the energy crisis to increasing tourism to revolutionizing small businesses. On August 17th, the African National Congress (ANC) backed a plan to split legislation governing the oil and gas industry from mining laws as the party begins a review of its policies in the effort to revamp its flailing economy.


“South Africa economy faces turbulence ahead:’s Kganyago.” Naija247News. Naija247News, 11 August 2015. Web. 17 August 2015.


Cybersecurity’s Next Frontier: Cyber Insider Trading

August 17, 2015 – On Tuesday, August 11th, it was announced that Ukrainian hackers infiltrated several computer systems used by corporations to report sensitive information. Allegedly, the hackers used this information to make millions of dollars trading on the confidential data.

The U.S. government is preparing to announce criminal charges against the insider trading ring; the case is thought to be the largest of its kind brought to date. It also opens up a conversation about a new type of cybersecurity crime.

Forbes reports that several hackers gained unauthorized access to news wire services used to make significant announcements concerning mergers and acquisitions. After gaining access to these sensitive press releases, the hackers passed that information on to individuals in the United States who subsequently traded on that information. The targets included Fortune 500 firms such as Bank of America.

The nine suspected insider traders are expected to be charged in New York and New Jersey. The case reportedly marks the first time prosecutors have alleged that a securities fraud scheme was based on hacked inside information. ComputerWeekly reports that, “the case exposes the vulnerabilities of financial markets in the digital age and demonstrates how advance information can be acquired without using any insider contacts.”

Edcomm Group Banker’s Academy has many robust course offerings that address different aspects of cybersecurity, including cybercrimes and other regulations that protect institutions from cyberattacks such as insider trading.


Ashford, Warwick. “FBI uncovers cyber insider trading gang.” Tech Target, 11 August 2015. Web. 11 August 2015.

Maglich, Jordan. “Criminal Charges Filed in Massive Alleged Cyber Insider Trading Ring.” Forbes. Forbes, 11 August 2015. Web. 11 August 2015.


China Devalues Yuan Following Slump in Trade

August 13, 2015 – On Tuesday, China devalued its tightly controlled currency, the yuan, in the wake of the country’s economic turmoil. The devaluation of 2% is said to be the biggest one-day decline in over ten years.

As a result of the devaluation, Asian currencies and stock markets across the region declined sharply: the onshore yuan suffered its biggest one-day loss in almost twenty years, sending the Thai baht, the Singapore dollar, the Korean won, and the Philippine peso to multiyear lows, according to the Wall Street Journal.

The Chinese government cited it as a free-market reform, a “change in methodology to make it more responsive to market forces,” but many critics think it might be the sign of a longer-term slide in the exchange rate which might lead to tensions with U.S. manufacturers. A weaker yuan will make Chinese exports more competitive, a boon for Chinese exporters who already have very thin profit margins.

According to one source, “China’s decision to devalue the yuan Tuesday—effectively lowering the value of exports and increasing the cost of imports for domestic buyers—is likely to deepen price declines among copper, aluminum and other metals. China consumes nearly half of the world’s annual output of metals.”

Edcomm Group Banker’s Academy is always ready and able to help financial institutions and other banking organizations to navigate the tumultuous economic climate. Visit our Banking and Financial Course Catalogue for processes and procedures for traversing these international financial shifts!


Deng, Chao. “Currencies in Asia Tumble on Devaluation of Chinese Yuan.” The Wall Street Journal. Dow Jones & Copmany, Inc., 11 August 2015. Web. 11 August 2015.

Mukherji, Biman. “With Yuan Devaluation, China Digs a Hole for Commodities.” The Wall Street Journal. Dow Jones & Copmany, Inc., 11 August 2015. Web. 11 August 2015.

EMV Fraud Liability Shift Deadline Looms

August 12, 2015 – On October 1, 2015, the EMV Liability Shift, announced by Visa, MasterCard, Discover, and American Express back in 2011 and 2012, will take effect in the United States. Issuers and merchants using non-EMV compliant devices that choose to accept transactions made with EMV-compliant cards will be required to assume liability for any and all transactions that are found to be fraudulent.

Over the past few years, the major credit card issuers have announced plans to move toward full EMV-standard compliance, marking several milestones along the way. Visa and MasterCard, for instance, announced PCI Audit Relief back in 2012, and anticipate an October 2017 compliance date for fraud liability at automated fuel dispensers.

The looming question remains whether or not financial institutions and other retailers will be ready to both issue credit cards and accept chip-and-PIN-enabled cards. Last year, the retail giants Home Depot, Target, Walgreens, and Wal-Mart, some of the victims of recent cybersecurity hacks and massive identity theft, pledged to install chip-and-PIN compatible card readers by this  past January, and for the most part this has been the case.

However a recent Gallup has shown that only 32% of small business owners in the United States are aware of the coming liability shift, and those who are aware are hesitant to invest in the new technology, even if it means that credit and debit card transactions will be safer and more secure.

Edcomm Group Banker’s Academy helps financial institutions and organizations alike to weather banking and financial changes such as these with efficient eLearning delivery systems and robust course offerings, such as EMV, a course which analyzes and discusses the implementation of EMV technology in the United States.


Payments Leader. “Will Retailers Be Reader for EMV by Oct 2015?” Payments Leader. Payments Leader, 16 October 2014. Web. 12 August 2015. 

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