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Venezuela’s Maduro Sells Gold, as USA Tightens Screws

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UPDATE February 1, 2019, 1:40 PM : As news unfolds, Maduro’s administration halted its plans to move 20 tonnes of Venezuealn gold bars overseas.

As Venezuela mires in political chaos, the South American country’s central bank is selling 15 tonnes of gold from its vaults, having sent the gold to the United Arab Emirates. The Central Bank of Venezuela is awaiting a return for euros in cash. Venezuela is under U.S. sanctions, so euros are preferred. Why send euros versus U.S. dollars? For example, in early 2016, in a bid to evade Iranian sanctions, the U.S. Obama administration sent a jumbo jet carrying US$ 400 million worth in euros, Swiss francs, and other currencies to Tehran, which another US$ 1.3 billion worth of currency was sent afterwards.

In total, the Central Bank of Venezuela seeks to sell 29 tonnes of gold held in Caracas in return for cash liquidity to keep the economy open for the importation of basic goods. On January 26, 2019, a 3 tonne shipment of gold left Maiquetia airport and was flown by Venezuelan cargo airline Solar Cargo to the United Arab Emirates.

In 2018, the central bank exported around US$ 900 million worth of unrefined gold to Turkey. Venezuela has gold in the bank vaults in the Bank of England, but has been unable to move them.

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China’s Central Bank Creates Macro-Prudential Management Bureau

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The People’s Bank of China (PBOC) created a new department to oversee and attempt to eliminate financial risks to the system. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Like its U.S. Peers, Legg Mason Seeks to Trim Costs

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Legg Mason Inc., a Baltimore-based asset manager, has announced a reduction in workforce as is prepares to streamline operations and save money. Legg Mason’s leadership commented that assets under management fell 5 % year-on-year. Legg Mason currently manages US$ 727.2 billion (as of December 31, 2018), which is down from the previous US$ 767.2 billion. CEO Joseph A. Sullivan noted that a global operating platform will centralize fund administration, IT, and other departments that work with affiliates. Sullivan did not discuss the number of layoffs expected, or specify which areas would be impacted. Legg Mason disclosed they planned to close a quarter of its exchange-traded funds in March 2019. These three ETFs include a U.S. strategy, emerging markets, and a developed markets strategy outside the U.S. However, these funds run around US$ 28 million in assets under management.

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Monetary Authority of Singapore Establishes Corporate Governance Advisory Committee

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On February 12, 2019, the Monetary Authority of Singapore (MAS) revealed the creation of a Corporate Governance Advisory Committee (CGAC). CGAC was formed to advocate for good corporate governance practices among listed companies in Singapore. Bobby Chin, Director of Singapore Telecommunications Limited, will be the Chair of CGAC. According to a MAS press release, “CGAC will identify current and potential risks to the quality of corporate governance in Singapore.”

MAS formed the Corporate Governance Council (Council) in February 2017. The Council was dissolved after it pushed out a publication of its final recommendations on August 6, 2018.

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