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maltatoday, WEDNESDAY, 27 SEPTEMBER 2017 11 Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way Mario Draghi: European Central Bank has 'no power' to regulate Bitcoin Mario Draghi, president of the Eu- ropean Central Bank (ECB), has indicated that his institution does not have the powers to regulate cryptocurrencies. Making his statements to the European Parliament's Committee on Economic and Monetary Affairs, Draghi said that "it would actually not be in our powers to prohibit and regulate" bitcoin and other digital currencies. The comments came in response to a question from the committee over whether ECB intends to issue a regulatory framework or an all- out ban on cryptocurrencies, and whether Draghi felt that higher capital requirements for fintech were required to protect the banking sector. Draghi revealed that the ECB has yet to discuss the potential impact of cryptocurrencies, but likely areas of analysis include the risk posed by cryptocurrency due to its scale, usage and economic impact. "We have to ask what effects cryptocurrencies have on the economy," Draghi stated. Adding, that they are still too immature to be considered a viable method of payment. The primary concern for the ECB surrounding cryptocurrencies, and digital innovation more generally, is cybersecurity, he went on, stressing that protecting against cyber risks is central to the ECB's agenda. Earlier this month, Draghi also criticised the proposed initiative by Estonia's e-Residency project to launch a national cryptocurrency called "estcoin," reportedly stating: "I will comment on the Estonian decision: no member state can introduce its own currency. The currency of the Eurozone is the euro." Draghi is not the only senior ECB official to comment on cryptocurrencies in recent days. The central bank's vice president, Vitor Constancio, made headlines last week when he stated that cryptocurrencies were a purely speculative asset, and compared them to "tulip mania" – the 17th century trading bubble experienced in the Netherlands. Constancio stated that the ECB doesn't see the technology as a "threat to central bank policy." US companies urge EU to refrain from unilateral moves on Web tax The European Union's plans to increase taxes on digital fi rms risks undermining the bloc's growth and stifl e global efforts to fi nd common solutions, US companies operating in the EU said yesterday. Critics say online fi rms such as Google or Facebook pay too little tax in the EU by rerouting most their profi ts to low-rate countries like Luxembourg or Ireland. Frustrated by how long it is taking the world's rich nations to reach a deal on how to tax fairly digital giants, the EU has threatened to move ahead alone with a tax on turnover or with other short or long-term measures. "Unilateral action by the EU would seriously undermine international efforts to address tax issues," Susan Danger, head of the American Chamber of Commerce to the EU, said. AmCham EU said a turnover tax, as proposed by France and backed by other large EU countries, would reduce in- vestment, hit jobs and penal- ize start-ups, low-margin and loss-making companies. Current rules exempt loss- making fi rms from paying taxes. A report by EU law- maker Paul Tang said the US online retailer Amazon, which has its EU tax residence in Luxembourg, has been mostly exempted from taxes in the 2013-2015 period because it did not make profi ts. The EU is also considering more structural measures to change the way companies are taxed, so that levies could be raised when they have a "vir- tual" platform in a country, and not only a physical pres- ence. Changes to existing rules may be added to a review of corpo- rate tax rules that is currently under debate in the EU Parlia- ment, the EU executive com- mission said. AmCham EU also criticised this initiative for a common tax base in the 28-country bloc saying the move could "adversely affect EU com- petitiveness and growth if it is not in line with internationally agreed rules". The Google logo is pictured atop an offi ce building in Irvine, California Nestlé plans $10 billion revamp as activist Loeb takes aim Nestlé may buy or sell businesses with combined sales of almost 10 billion francs ($10 billion) as Chief Executive Offi cer Mark Schneider embarks on the biggest overhaul of the world's largest food company in at least a decade. Selective acquisitions and divestments could affect about 10% of total revenue, Schneider told investors as he unveiled his new strategy to investors at a conference in London on Tuesday. Nestlé, which has about 90 billion francs in sales, aims to focus on faster-growing businesses such as coffee, bottled water and pet care as the company tries to sell its US chocolate business in its first major retreat from sugary snacks. "We'll need to trade out of some product areas and into others," Schneider said. "We'll act decisively, and the US confectionery is a good example of that." Company targets For the first time, the Swiss owner of Nespresso coffee and Perrier water set a fixed profitability target, aiming for an underlying trading margin in 2020 that's as much as 2.5 percentage points higher than what it achieved last year. That's still shy of the level sought by activist investor Dan Loeb, whose hedge fund firm Third Point bought a $3.5 billion stake in Nestlé earlier this year. Loeb declined to comment on Nestlé's plans. The shares traded 0.9% higher as of 11:12 am in Zurich. "The target is certainly attainable," said Jean-Philippe Bertschy, an analyst at Bank Vontobel AG. "While it will please some investors, others - like Loeb - may be a bit disappointed." Nestlé's adoption of a profit target marks a broader shift among the world's biggest food companies, after decades of prioritizing scale. Now, with many of their mass-market brands facing skepticism from consumers seeking healthier and hipper alternatives, sales growth is slowing and consumer-goods giants are under pressure from investors to cut costs and to move into more profitable niches. Schneider said Nestlé isn't immediately changing its stance on its stake in French cosmetics maker L'Oreal, which he described as a "fabulous" investment, contributing 9% of the Swiss company's earnings per share over the past decade. The death of L'Oreal heiress Liliane Bettencourt last week prompted speculation about the future of Nestlé's 23% holding in the French cosmetics company.