OPEC+ strikes deal to boost oil output, car market puts U.S. inflation in high gear, and Europe aims to remake its economy: This Week in Finance

Welcome back to This Week in Finance, your weekly roundup of the conversations trending among financial professionals on LinkedIn. Click Subscribe to be notified of each edition. This week:

Junior bankers have had enough: Bloomberg

Big banks?are pulling out the stops?to keep early-career bankers at their firms, offering raises, bonuses, Peloton bikes, and even luxurious vacations to sweeten junior bankers' already sizable pay packages. But such sweeteners may not be enough for a generation of young, burnt-out financiers who see greener pastures in areas like tech, private equity, and venture capital,?writes Bloomberg. Turnover is on the rise at large banks as early-career finance professionals reconsider their priorities and seek a more relaxed work culture in the wake of the pandemic. ?? Here's what people are saying.

OPEC+ agrees to boost oil supply

OPEC+ producers today reached a deal to?increase oil production?starting in August, ending a?lengthy dispute?between Saudi Arabia and the United Arab Emirates that has?roiled energy prices. The group agreed to increase oil output by 400,000 barrels a day and?oil production cuts?would be phased out by September 2022 — moves that will "help ease a potential squeeze in supplies" as global economies reopen, The New York Times reports. ?? Here's what people are saying.

China's economy grows, but slower

China's GDP?rose 7.9% in the second quarter?from a year earlier, a smaller increase than the 18.3% growth it saw between January and March, according to official data. The world's second-largest economy was lifted by?higher export demand?as more economies reopened. But industrial activity and retail sales slowed, owing to some virus outbreaks at home and higher material costs. It comes amid speculation that policymakers are?considering providing more support?for the economic recovery. ?? Here's what people are saying.

• Bank of Canada expects slower growth: As the country emerges from the pandemic, the Bank of Canada?said?it expects the economy to grow at a slightly slower place this year, lowering its previous 6.5% forecast to 6.0%.
• Australian unemployment at 10-year low: A rise in full-time roles in June has caused Australia's rate of unemployment to?dip to a 10-year low, despite a corresponding drop in hours actually worked?thanks to rolling lockdowns.

Trends of the fintech craze

Fintech startups attracted a record $34 billion in funding in the second quarter, according to CB Insights. The fintech boom has particular traits,?notes The Economist. The biggest firms are the ones catching investors' attention, and fintech activity is spreading worldwide instead of being centered in the U.S. and China. The 'craze' now includes services beyond payments, like online brokers, investment advisers, and insurance technology, The Economist suggests. ?? Here's what people are saying.

• Buy now, pay later with an iPhone?: Apple is working on a "buy now, pay later" option,?reports Bloomberg. The service, for which Goldman Sachs will be the lender, will give users the option to pay for items in installments.
• Indonesia's digibank race intensifies: Indonesia's digital-banking scene is now home to seven players, including those backed by big tech companies such as?Line, Sea, and Gojek. While the sector holds promise when it comes to serving the young and mobile population of Southeast Asia's largest economy, it faces hurdles?including?stiff competition and a high proportion of?residents without a bank account.

Is cash a thing of the past?

According to an Atlanta Fed?survey, the share of consumers who used cash at least once a month dropped to 74.7% in 2020 from 82.4% in 2019. The trend, largely influenced by the safety of not carrying cash, the convenience of digital transactions, and —?after the onset of COVID-19 — its sanitary nature, is igniting conversations at the Federal Reserve around the need for a competitive alternative, according to?Axios. Though U.S. officials are still weighing the costs and benefits of central bank digital currencies (CBDCs), many governments have already begun to move ahead:

• On Wednesday, the European Central Bank?announced?it would start the process of?developing a digital euro.
• In April, China?became the first?major economy to formally create a digital currency.
• India?and?Sweden?have already attempted to force a cashless economy by partnering with private-sector banks.
• Here's what people are saying.

Debt soars despite dip in borrowing

Even as scores of Americans are?borrowing less money?amid the pandemic, overall consumer debt remains?higher than ever. Despite increased debit-card use and faster payments on credit-card balances, debt soared to $14.64 trillion in the first quarter, according to Bloomberg, thanks to swelling student loans and huge demand for home and auto loans. Meanwhile, government aid put more money into many people's wallets and deterred them from borrowing, "squeezing the profit engine for banks." ?? Here's what people are saying.

• Cars drive up inflation: Surging prices for cars have kicked inflation into high gear, with consumer prices rising an?annual 5.4% in June?— the most since 2008. Monthly prices for goods and services shot up 0.9% from May, largely due to rising automobile prices stemming from a computer-chip shortage that has triggered a shortage of new vehicles.

BOE: Link exec pay to diversity

Financial firms' diversity and inclusion policies may soon influence the salaries of senior managers in Britain under a new proposal introduced by the?Bank of England. The BOE, in conjunction with the Financial Conduct Authority and Prudential Regulation Authority, is seeking feedback from regulated firms, industry groups, and trade bodies about the proposal, which aims to improve diversity. A key tactic is to financially incentivize managers to implement diversity and inclusion policies in hiring and promotions. Firms would also need to ramp up data gathering to allow for performance measurement. ?? Here's what people are saying.

U.S. warns firms of Hong Kong risk

The U.S. government?has warned firms?of the risks of continuing operations in Hong Kong. President Joe Biden said the advisory, issued by the U.S. Departments of State, Treasury, Commerce, and Homeland Security,?is meant to caution firms?on the "deteriorating" situation in?the Asian financial hub. According to the Financial Times, about?282 American companies?currently house their regional headquarters in Hong Kong. ?? Here's what people are saying.

Europe unveils historic climate plan

The European Union is making one of the boldest moves globally to tackle climate change, unveiling a?sweeping economic plan?to?"give humanity a fighting chance."?The unprecedented plan would transform nearly every aspect of the bloc's economy, from household energy use to the?world's first carbon border tax on imports. While it's expected to spark a fierce debate among policymakers, many say it's still not enough.

• Meanwhile, China is set to launch a national carbon-emission trading market, creating the world's largest emissions trading program,?The Wall Street Journal reports.
• Here's what people are saying.

Behind the world's uneven recovery

Economic recovery in the wake of the pandemic is bound to be anything but straightforward,?according to The Economist. Access to COVID-19 vaccines will determine which economies can reopen, paving the way for business recovery and the return to office life. Then there's the matter of supply and demand: Companies with the financial might to access the limited supplies of raw materials and labor will leapfrog ahead of rivals. And economies will need to wean themselves off of emergency government stimulus efforts, all without creating lasting damage to capital markets and economic growth. It's going to be a bumpy ride. ?? Here's what people are saying.

With Scott Olster, Kelli Nguyen, Yunita Ong,?Gianna Prudente, Cathy Anderson,?Lynn Chouman,?Jessica Hartogs, and Carrington York.

What's your take on the week's news and other developments impacting you or your business? Join the conversation in the comments below.