Russia has warned that it will react robustly to Western moves to seize its assets or deploy missiles. Moscow could sever diplomatic relations with the United States should it confiscate Russian assets frozen under sanctions, Deputy Foreign Minister Sergey Ryabkov said on Friday. Officials also said the Kremlin would respond to the deployment of missiles in Europe or Asia, even as Ukraine reported that Russia had unleashed another barrage of attack drones overnight. Ryabkov threatened that Moscow could cut diplomatic ties with Washington should it hand frozen Russian assets to Kyiv, which is desperate for funds, according to the Russian state news agency Interfax. Western countries are discussing the confiscation of more than $1bn in Russian assets frozen due to sanctions over the war in Ukraine.

Financial regulators in the United States have named artificial intelligence (AI) as a risk to the financial system for the first time. In its latest annual report, the Financial Stability Oversight Council said the growing use of AI in financial services is a "vulnerability" that should be monitored. While AI offers the promise of reducing costs, improving efficiency, identifying more complex relationships and improving performance and accuracy, it can also "introduce certain risks, including safety-and-soundness risks like cyber and model risks," the FSOC said in its annual report released on Thursday. The FSOC, which was established in the wake of the 2008 financial crisis to identify excessive risks in the financial system, said developments in AI should be monitored to ensure that oversight mechanisms "account for emerging risks" while facilitating "efficiency and innovation". Authorities must also "deepen expertise and capacity" to monitor the field, the FSOC said.

Chinese Premier Li Qiang has called for more "communication and exchange" to avoid misunderstanding in his remarks at the opening of this year's'Summer Davos' in Tianjin, the first in-person event in three years following the COVID-19 pandemic. The three-day summit, which got under way on Tuesday, is hosted by the World Economic Forum but will focus heavily on China's place in the world and concerns about how the global economy can move forward in an increasingly fractious world, according to the agenda. Li told delegates it was time to support globalisation and deeper economic cooperation. "In the West, some people are hyping up what is called'cutting reliance and de-risking'," Li said. "These two concepts… are a false proposition, because the development of economic globalisation is such that the world economy has become a common entity in which you and I are both intermingled. The economies of many countries are blended with each other, rely on each other, make accomplishments because of one another and develop together. This is actually a good thing, not a bad thing."

Fox News senior congressional correspondent Chad Pergram has more on the fiscal trajectory as the Congressional Budget Office warns the country could default sometime between July and September on'Special Report.' House Republicans are demanding more information from Treasury Secretary Janet Yellen on what – if any – safeguards are in place to keep the economy from careening off a cliff if the debt ceiling is not increased and the government is forced to make tough spending choices. House Financial Services Chairman Patrick McHenry, R-N.C., asked Yellen in a Tuesday letter exactly how long the government will be able to operate now that it has hit the $31.4 trillion debt ceiling and asked for an exact date. McHenry asked Yellen to provide "Treasury's current projection of the X-Date, along with how Treasury has arrived at this projection." So far, Treasury has said it expects it will need to begin borrowing money again by June 5, but has not explained publicly how it reached that date. McHenry also asked Yellen to provide a Treasury briefing to the committee by next week about federal debt management and "contingency planning."

The U.S. refrained from designating any trading partner as a currency manipulator in the Biden administration's first foreign-exchange policy report, even as Switzerland, Taiwan and Vietnam met thresholds for the label.The Treasury Department said Friday that those three economies met criteria for the manipulator label, including a large trade surplus with the U.S. In December, the last report done under President Donald Trump designated Switzerland and Vietnam as manipulators.The new assessments signal the Biden administration is taking a less confrontational approach to international currency policy after Trump labeling of China and other countries as manipulators proved ineffective and spurred concerns of politicization.The latest report assesses currency activities through 2020.Covid ImpactThe U.S. acknowledged that the unprecedented nature of the coronavirus pandemic's impact on the global economy led to creative policy responses by governments and central banks.

Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section. Traders return to business Monday after learning Friday that orders for long-lasting manufactured goods sank 6.8% in July, the biggest fall in nearly three years. Even so, manufacturers have rebounded from a slump in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar. Cheaper food: The impact of Amazon's purchase of Whole Foods Market will reach consumers Monday, when the high-end grocery chain begins cutting prices. Whole Foods will reduce prices on certain "bestselling staples," including bananas, salmon and organic large brown eggs.

The video game industry's annual jamboree, E3, is set to open in Los Angeles on Tuesday, but some of the biggest companies in the business will begin their quest to build buzz before then. On Sunday, Microsoft revealed a new game console that supports 4K video, called Xbox One X. It will go on sale on Nov. 7. On Monday, Sony is expected to promote exclusive games for its PlayStation 4, while Nintendo on Tuesday plans to show off games for its new Switch console, including the much-anticipated Super Mario Odyssey. The Federal Reserve is expected to raise its benchmark interest rate on Wednesday after a two-day meeting of its policy-making committee.

After three years of almost single-handedly juicing up the slow-growing economy, Janet L. Yellen and the Federal Reserve should be looking at easier days ahead. Yellen, in what will probably be her last full year as Fed chair, may finally get help from somewhere else in Washington. Tax cuts and infrastructure spending planned by President-elect Donald Trump, if backed by the Republican-controlled Congress, would lighten the load for a Fed whose easy-money policies have been the primary economic support for the nation. She is already breathing easier on the Fed's employment mandate; the jobless rate has fallen to a nine-year low of 4.6%. Inflation, too, is under control and, by all accounts, creeping toward the central bank's optimal level of 2%.

Could Kevin Bacon have saved us from the 2008 financial crisis? But the network science behind six degrees of Kevin Bacon just well may have. According to the famous saying, every movie actor is separated from Kevin Bacon by six degrees of separation or less, going from co-star to co-star (actually most are separated from Bacon by only three degrees). Actors form a "small-world" network, meaning it takes a surprisingly small number of connections to get from any one member to any other. Natural and man-made small-world networks of all kinds are extremely common: The electric power grid of the western United States, the neural network of the nematode worm C. elegans, the Internet, protein and gene networks in biology, citations in scientific papers, and most social networks are small. Most of these small networks use hubs, or nodes with an especially large number of links to other nodes.

Treasury Secretary Jacob Lew said Monday that Americans have reaped significant benefits from the international architecture put in place after World War II and the United States would be making a serious mistake to retreat from its global leadership role. In a speech before the Council on Foreign Relations, Lew sought to counter arguments being advanced by Donald Trump and other Republican presidential candidates that Americans are losing badly in competition with China and other countries in the global economy. Lew said that the United States needs to embrace new players on the global economic stage and make sure they meet the standards of the trading system that the country helped create. "The worst possible outcome would be to step away from our leadership role and let others fill in behind us," he said. Lew's comments came in advance of global finance meetings later this week.