BBA https://www.bba.org.uk The voice of banking Fri, 24 Apr 2015 19:24:56 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 This week in Westminster https://www.bba.org.uk/news/banking-matters/this-week-in-westminster-38/ https://www.bba.org.uk/news/banking-matters/this-week-in-westminster-38/#comments Fri, 24 Apr 2015 15:23:14 +0000 https://www.bba.org.uk/?post_type=news&p=45980 Read More]]> The Conservatives used their weekend campaign events to set out further details on their policies for consumers with George Osborne announcing that a Conservative government would appoint Ros Altman as a minster responsible for financial consumer protection and financial education. George Osborne also announced that a Conservative government would:

  • Account number portability. Work with the Payments System Regulator on whether to introduce total account portability, either through technology based solutions or account number portability.
  • Require transparency on charges. Require all mortgage lenders’ to standardise, and make transparent, the fees they charge on mortgages. And also ensure all foreign exchange transactions include a clear breakdown of the cost of the service alongside a publication of the mid-market rate and the offered rate.
  • Set a target of issuing 15 new banking licenses.  Work with the PRA to ensure that they fulfil their secondary objective of increasing competition, and expect them to issue at least 15 new banking licenses
  • Extending the new Pension Wise service to working people at every stage of their life. Under a Conservative Government Ros Altmann will look at whether the Government should extend the Pension Wise service to younger age groups too, as part of pensions auto-enrolment.

The SNP kicked off the week with their manifesto launch. The SNP leader and Scottish First Minister, Nicola Sturgeon spoke of the revenue raising measures the SNP would support saying “We will also back fair proposals to raise extra revenue. It’s right that those with the broadest shoulders pay a little bit more. That’s why we will back the restoration of the 50p tax rate for the highest earners, a mansion tax, and a bankers’ bonus tax.” The manifesto also confirmed that the SNP would back a rise in the bank levy.

Setting out the party’s commitment to prevent a Conservative government after the election the SNP leader said “We will not do any deals that would put the Tories into power – indeed, if there is an anti-Tory majority after May 7th, we will vote to stop a new Tory government even getting off the ground.”

Sticking with the strict message discipline that has characterised both the Conservative and Labour campaigns in this election.  Ed Miliband’s focus for the first half of this week was the NHS with campaign events up and down the country focussing on the risk the Conservatives pose to the NHS. In contrast the Conservative campaign has continued to focus on the risk of a Labour government backed up by the SNP as David Cameron announced that the Conservatives would introduce an annual review to investigate what impact decisions from the Scottish Parliament are having on the rest of the UK. Today sees the Conservatives launching their manifesto for England.

While the Labour and the Conservatives focus on foreign policy, today the Liberal Democrats have launched a dossier highlighting fears expressed by the City of an unstable Tory and Labour Government.  In a speech in Aberdeen, the Liberal Democrat Chief Secretary to the Treasury said  Britain’s investment banks, rating agencies and economists are concerned by a Tory or Labour Government and that Britain’s markets craved the stability and balanced economic approach fought for by the Liberal Democrats over the last five years.

Populus’ latest election predictor has the Conservatives on 271 seats and Labour on 272 seats the polls continue to put Labour and Conservatives neck and neck. Four polls yesterday saw the Conservatives ahead in two and Labour ahead in two:

  • Survation’s latest poll for the Mirror has topline figures of CON 33%, LAB 29%, LDEM 10%, UKIP 18%, GRN 4%;
  • ComRes’s latest telephone poll for the Mail & ITV has toplines of CON 36%, LAB 32%, LAB 8%, UKIP 10%, GRN 5%;
  • YouGov for the Sun has topline figures of CON 33%, LAB 35%, LD 8%, UKIP 13%, GRN 5%; and
  • Panelbase, with topline figures of CON 31%, LAB 34%, LDEM 7%, UKIP 17%, GRN 4%.

Please find attached relevant policies outlined in the manifestos published this week as well as details of how these compare to previous announcements.

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This week in Brussels https://www.bba.org.uk/news/banking-matters/this-week-in-brussels-40/ https://www.bba.org.uk/news/banking-matters/this-week-in-brussels-40/#comments Fri, 24 Apr 2015 15:17:54 +0000 https://www.bba.org.uk/?post_type=news&p=45978 Read More]]> Fears over Grexit

European Finance Ministers are gathering this Friday and Saturday in Riga for their informal ECOFIN meeting where we expect Greece to be at the centre of discussion. Yesterday, Eurogroup Ministers met to discuss the Greek government reforms list. As French paper Le Monde reports this morning, no deal was within possible reach despite Greek Finance Minister Yanis Varoufakis writing in a blog that “current disagreements with our partners [were] not unbridgeable.”

A note of optimism in the Greek crisis: on Monday, the new Brussels-based Politicoreported that even though an agreement was still unlikely, Commission President Jean-Claude Juncker was dismissing any possibility of a Greek default. “We are prepared for all kinds of events but I am excluding at 100 percent this Grexit, or Greek exit,” Juncker said. “There will be no default.”

Council adopts regulation capping fees for card-based payments

On Monday, the Council formally adopted without discussion the Multilateral Interchange Fees Regulation which aims at “reducing costs for both retailers and consumer, and to help create an EU-wide payments market. The regulation will also help users make more informed choices about payment instruments.” The Council endorsement follows the European Parliament first reading vote on 10 March. We expect publication in the Official Journal of the European Union in June 2015. The Regulation will then become effective 20 days after publication; the fee caps will enter into force six months after publication.

Council adopts anti-money laundering rules

The Council also formally endorsed rules preventing anti-money laundering and terrorist financing. The Directive and Regulation ensure consistency with international rules. This formal adoption follows the informal agreement reached with Parliament in December 2014. The European Parliament will now adopt the texts at second reading probably at its May plenary sitting.

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BBA Forward Look https://www.bba.org.uk/news/banking-matters/bba-forward-look-2/ https://www.bba.org.uk/news/banking-matters/bba-forward-look-2/#comments Fri, 24 Apr 2015 15:16:28 +0000 https://www.bba.org.uk/?post_type=news&p=45976 Read this week’s forward look via the link below.

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BBA Brief – 24 April 2015 https://www.bba.org.uk/news/bba-brief/bba-brief-24-april-2015/ https://www.bba.org.uk/news/bba-brief/bba-brief-24-april-2015/#comments Fri, 24 Apr 2015 08:53:39 +0000 https://www.bba.org.uk/?post_type=news&p=45927 Read More]]> HSBC to launch immediate review of location HQ

Sky News is reporting that at HSBC’s Annual General Meeting today the bank’s chairman Douglas Flint will announce that the bank will be conducting an immediate review into whether to move their headquarters outside of the UK. Reports say that the review is expected to take around 6 months. In an online statement the HSBC chairman said: “As part of the broader strategic review taking place, the Board has therefore now asked management to commence work to look at where the best place is for HSBC to be headquartered in this new environment.” The full text of Douglas Flint’s AGM statement is available online here.

Bank customers shopping around

The BBC reports that bank customers are taking advantage of the Current Account Switch Service, with many surveying the wider market and opting to take up accounts at smaller “challenger” banks. The article quotes figures from the Payments Council which show that a total of 1.14 million have switched to another account provider in the past six months – a 7% year-on-year increase. Andrew Hagger of MoneyComms said: “The figures show that although more people are voting with their feet and looking for a more suitable banking relationship, the vast majority are refusing to budge from their existing provider despite the array of enticing upfront cash incentives on offer.”

BBA chief executive lays out his general election wishlist

Anthony Browne, chief executive of the BBA, writes in CityAM’s I would definitely vote for you if… section to ask electioneering politicians to introduce measures to bolster the banking sector.  His wishlist includes a shift in UK policy towards promoting growth rather than stability, a stable and predictable tax system, and for primary and free schools to have financial education on their curriculum as standard.

New chairman announces change ahead at Barclays

The new chairman of Barclays, John McFarlane, has told shareholders that he will instigate change at the bank – including closing certain underperforming divisions and cutting costs (Times, £, p38). In a letter delivered to shareholders as he officially took office Mr McFarlane said: “We need to get the errors of the past behind us, to achieve a satisfactory rate of revenue growth, greater cost discipline and a more dynamic reallocation of capital”. The comments were made as the bank held their annual shareholder meeting.

Latest from the BBA

Today is the last day to take advantage of the discounted early booking rate for the BBA Retail Banking Conference 2015.  The event will bring together many of the industry’s most senior executives and other thought leaders to discuss the issues that will shape retail banking over the next five years and beyond.  For full details, please vist our website.

Today’s diary

IRHP Judicial Review judgment expected at the Royal Courts of Justice

Eurofi

Informal ECOFIN in Riga

Prime Minister David Cameron expected to launch the Conservative Party’s England manifesto

Chief Secretary to the Treasury Danny Alexander is giving a speech on how markets are reacting to potential political uncertainty arising from the election.

In brief

Deutsche Bank has paid $2.5 billion in fines to authorities in the UK and US following an investigation into the manipulation of the Libor & Euribor benchmark rates (FT, £, p1).

Elsewhere in the FT (£, p17) it is reported that senior management at Deutsche Bank are set to decide against a complete exit from retail operations, instead choosing to spin off its Postbank business.

The Mail (p83) reports that the slowdown in France and Germany’s economies is “overshadowing growth elsewhere and is despite the European Central Bank’s quantitative easing”.

In the FT (£, p16) Credit Agricole has been told to pay $9.8 million to a Greek family after losing a long-running court battle involving allegations that it failed to ask enough questions about a suspicious transaction nearly 15 years ago.

What the commentators say

In CityAM (p19) David Craig, president of financial and risk at Thomson Reuters writes that recent comments from Lord Hill, the European commissioner for financial stability, may mark the beginning of the end of “banker bashing” in the EU. “Lord Hill spoke up for securitisation, that essential tool to enable bank lending long disregarded by policymakers. He also spoke up for venture capital and long-term infrastructure investment, which is the particular purpose of the Capital Markets Union. And he then remarked that “it was time for financial services to be re-invited into polite society”.

In the FT (£, p11) Gillian Tett writes that US economists are more nervous about a possible “Grexit” than those in Europe, citing their experience with Lehman Brothers as the difference – she writes: “US officials learned a painful lesson about how small shocks can spiral out of control.”

In the Mail (p85) Ruth Sunderland considers speculation that if HSBC goes back to Hong Kong we may see a return of the Midland Bank it took over almost 25 years ago.

If you get five minutes…

In the FT (£, p13) Antonia Quirke reviews The Emperor’s New Clothes – a new film directed by Michael Winterbottom and starring Russell Brand as he “seeks to upbraid banking bosses for the perfidious ways in which the losses of the 2008 crisis were taken on by the state”. The film receives a three star rating.

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BBA Brief – 23 April 2015 https://www.bba.org.uk/news/bba-brief/bba-brief-23-april-2015/ https://www.bba.org.uk/news/bba-brief/bba-brief-23-april-2015/#comments Thu, 23 Apr 2015 08:54:59 +0000 https://www.bba.org.uk/?post_type=news&p=45805 Read More]]> Gapper: Europe needs homegrown investment banks

John Gapper argues in the FT (£, p11) that Europe needs Deutsche Bank to remain as a leading investment bank so that it does not become too reliant on Wall Street.  He writes: “The City has always thrived by not being nationalistic or protectionist. But as the European Commission tries to forge a capital markets union to redress the continent’s reliance on bank-based lending, it requires institutions to support the transformation. Europe’s investment banks need not all be global in scale, there is an important role for domestic ones serving smaller companies and asset managers, but one or two would help. They would make it less likely that European finance dries up in a crisis as US banks retreat; less likely that rules are made in New York that Europe has to follow; and more likely that competition thrives. If no others accept the challenge, Deutsche should.”

Governments should spend as much on cyber as physical security

The President of Intel Security, Chris Young, has called for national governments to step up their spending on cyber security.  He told the FT (£, p19): “Cyber space is becoming essential to every dimension of our lives so it should have the same level of resources as physical security. We’re nowhere near that — we’re not even on the path towards the minimum yet. In our physical lives in most cases we basically expect government to do most of the defending and enforcing of the legal system. In cyber security, most of the burden is on the private sector and citizens against attackers.  I’m not saying we’re going to shift it back to the same as in the physical world, we just need to move a little bit.”

MPC votes against rate rise but takes “baby steps in hawkish direction”

The Bank of England’s Monetary Policy Committee has voted unanimously against a rate rise, but two members were reportedly considering changing their position.  Alan Clarke from Scotiabank said: “Overall, the only way is up for interest rates – but not yet. The tone from the MPC seems to be taking baby steps in the hawkish direction”.  A big factor in the decision to hold rates was lower than forecast wage growth.  Markit’s chief economist, Chris Williamson, said: “The Bank of England is currently forecasting the economy to grow by 2.9% this year, fuelled by consumer spending rising on the back of higher real employee earnings. The worry is therefore that weak pay growth means the economy is reliant on ultra-low inflation to boost consumer spending power” (Guardian, p29).

Credit trends – rise in demand for borrowing on cards as consumers pay down overall debt

The FT (£, p4) reports that the Bank of England’s credit conditions survey has found that consumer demand for credit cards has increased, which the paper links to the restriction in availability of payday loans following the clamp down by the Financial Conduct Authority. Markit’s latest household finances survey has recorded one of its biggest falls in household debt since it began in 2008 – suggesting that families are taking advantage of cheaper prices to pay off borrowing (Telegraph, B3).

Latest from the BBA

Tomorrow is the last day to take advantage of the discounted early booking rate for the BBA Retail Banking Conference 2015.  The event will bring together many of the industry’s most senior executives and other thought leaders to discuss the issues that will shape retail banking over the next five years and beyond.  For full details, please vist our website.

In her latest blog for the BBA, Julie Pardy, a partner at financial services training and consultancy FSTP, examines the role of the Responsibility Map that has been proposed by regulators.

Today’s diary

Bank of England: Trends in Lending – April 2015

ONS: Public sector finances – March 2015

Eurofi conference

In brief

The FT (£, p21) reports that Metro Bank is targeting raising £300 million from a stock market flotation next year.

The front page of the Express (p1) reports that the EU mortgage credit directive could push up the cost of re-mortgaging for many British households.

A feature in the FT (£, p9) looks at the future of HSBC, noting that the bank gets hit particularly hard by the UK’s Bank Levy.

What the commentators say

In Politico’s Europe edition Bill Emmott draws parallels between the fall of Lehman Brothers and a possible Grexit, saying: “Have we learned nothing since the Lehman shock?”

A leader in the FT (£, p10) does not believe that one man in Hounslow could be responsible for the US “flash crash” in 2010: “You cannot ‘spoof’ half a trillion dollars off the value of US equities. To accuse Mr Sarao of causing the crash is like blaming a flea on an elephant’s rump for a stampede.”

Also in the FT (£, p11),  John Plender writes that: “While politicians and regulators have devoted huge efforts since the financial crisis to curbing trading by banking behemoths that are too big to fail, the DoJ has alighted on a market amateur who is neither too big to fail, nor too big to jail, but seems to be a one-man threat to the integrity of one of the biggest markets in the world.”

In the Telegraph (B2) Ambrose Evans Pritchard looks at the resilience of the US shale industry, which is increasing output and confounding predictions that it would be put out of business by low prices.

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Strengthening accountability in banking: the new responsibilities framework https://www.bba.org.uk/news/insight/strengthening-accountability-in-banking-the-new-responsibilities-framework/ https://www.bba.org.uk/news/insight/strengthening-accountability-in-banking-the-new-responsibilities-framework/#comments Wed, 22 Apr 2015 10:45:10 +0000 https://www.bba.org.uk/?post_type=news&p=45723 Read More]]> As we all know, the new rules for accountability in banking are set to come to fruition on 7 March 2016.  Whilst a lot has been written about the new Conduct Rules and the new Senior Managers Regime, which explicitly makes named individuals personally accountable for specific functions within their bank, little has been said about the Responsibility Map that will need to exist within your firm.

What is the Responsibility Map and what is its purpose?

The Responsibility Map was an idea proposed within the original consultation papers on this topic.  It sought to ensure that each organisation affected by the new rules, had in place a single document that:

  • described how the firm’s management and governance arrangements are being met; and
  • set out how responsibilities have been issued to individuals within the firm.

Thinking from the regulator proposed that the Responsibility Map should ensure that:

  • there would be no gaps in accountability;
  • it would demonstrate that robust governance arrangements were in place within the firm; and
  • there was a clear organisational structure with defined, transparent and consistent lines of responsibility.

The purpose of the mapping, as you will see from what it is seeking to achieve, is for firms to be able to clearly demonstrate that all areas of their business are being managed by a responsible individual.

In the latest consultation paper published on this matter – FCA CP 15/5 and PRA CP 7/15 – our regulators have identified a set of 21 prescribed responsibilities.  As is always the way with regulation of this nature, firms will review, debate, interpret and then implement, with many similar businesses ending up with very different solutions.

For advice and guidance on how you might implement responsibilities mapping within your organisation, please contact Julie Pardy and the FSTP team by emailing juliepardy@fstp.co.uk.

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BBA Brief – 22 April 2015 https://www.bba.org.uk/news/bba-brief/bba-brief-22-april-2015/ https://www.bba.org.uk/news/bba-brief/bba-brief-22-april-2015/#comments Wed, 22 Apr 2015 09:23:42 +0000 https://www.bba.org.uk/?post_type=news&p=45698 Read More]]> Goldman Sachs warning over election outcome

Goldman Sachs has warned that a Labour-led government could spark a sell-off by investors, the FT (£, p1) reports. In a briefing to its clients the bank cited Labour’s plans to freeze energy bills, raise taxes and reform zero-hours contracts as policies that were likely to alarm investors. The briefing also said that a victory for Ed Miliband on 7 May would be viewed as “more problematic by the business community” than David Cameron’s return to Number 10, the Times adds (£, p6). Goldman Sachs also warned that small companies are at particular risk from the regulatory implications of a left-wing government, the paper says.

It a separate note, analysts from Citi said that markets appear “relaxed” about UK political uncertainty ahead of the general election, and argues that the election of a minority government, especially in coalition, could mean less risk of market-unfriendly policies than otherwise.

Sale of Northern Rock and Bradford & Bingley assets

The sale of mortgage assets is expected to raise billions of pounds, as UK Asset Resolution, the body tasked with disposing of the Government held Northern Rock and Bradford & Bingley assets, has this week started a huge asset sale by providing information to interested buyers, the FT (£, p21) reports. The bidding process is expected to be very competitive amid improved market conditions. David Edmonds, corporate finance partner at Deloitte, is quoted saying: “The combination of pent up demand and the UK economic recovery means sellers are all of a sudden in a great position.”

However, article warns that many challenger banks lack the scale to bid competitively for assets, leaving them at risk of missing out. The paper quotes one unnamed source saying: “If you want to sell a small portfolio, of say £500 million, then there’s a very long list of small banks who would be very interested. As soon as you boost the cheque to £1 billion, most fall away – it’s too big for them.”

ECB memo prompts fall in Greek bank shares

Shares in Greek banks fell by 4% yesterday after hearing news that the European Central Bank has drawn up a memo proposing to cap the emergency assistance (ELA) that they receive, the Telegraph (B1) says. The assistance is provisional on Greek banks continuing to remain solvent, but as domestic savers take their money out of the country the ceiling on the funds has been hit on an almost weekly basis.

The Independent (p50) adds that yesterday Greece’s three-year borrowing costs also jumped to just short of 30%. Greek prime minister Alexis Tsipras could meet German Chancellor Angela Merkel tomorrow, on the eve of a eurozone finance ministers meeting in Riga.

Elsewhere, Jeroen Dijsselbloem, president of the Eurogroup, is quoted by Reuters saying he expects Athens and its creditors to forge a new agreement in the coming weeks.

Today’s diary

Bank of England: Minutes of the Monetary Policy Committee meeting held on 8 and 9 April 2015

Bank of England: Agents’ Summary of Business Conditions, April 2015

Eurofi

Daily Politics debate on the economy with David Gauke, Chris Leslie, Lord Newby and Stewart Hosie

Stat of the day

40% – The percentage of jobs that could be fully automated in the future, according to new research into the UK labour market by Nesta (Telegraph, B1).

Latest from the BBA

The BBA has responded to a discussion paper from the Financial Markets Law Committee which considers ways to promote the consistent implementation of regulation agreed internationally.

In brief

The European Commission is considering softening a proposal to require asset managers to get written agreement from clients before increasing research charges (Chicago Tribune).

Research by Barclays has revealed that wealthy British pensioners added £37 billion to the economy in leisure and hospitality spending last year, and could have spent more if businesses realised the consumer group had such financial resources (City AM, p12).

As Atom Bank, the UK’s first “digital only” bank, prepares to launch BBA Chief Executive Anthony Browne is quoted by the Northern Echo saying “There’s an amazing revolution in the way people are banking. People are increasingly using mobile banking for day-to-day transactions like checking their balance, paying bills, and taking out loans.”

Euribor, the euro interbank lending rate for three months has fallen into negative territory for the first time after it was fixed at minus 0.001% yesterday (FT, £, p28).

Russia’s economy shrank by 2% in the first three months of this year as the pressure of sanctions and the weak oil price take hold, according to the country’s prime minister, Dmitry Medvedev (BBC News).

US authorities are seeking to extradite a futures trader from London so that he can stand trial for allegedly contributing to the 2010 “flash crash” that saw the Dow Jones plunge 600 points in minutes (FT, £, p1).

What the commentators say

In a leader, the FT (£, p10) says productivity matters more for the country’s fiscal health “than any of the parties flimsy electoral vows”.

Writing in the Independent (p54, paper only), Mark Leftly argues that the City should not dismiss the SNP as a single issue party, citing the party’s policies on small businesses and an EU referendum,

If you have five minutes…

Martin Wolf tries to dispell six myths about the economic situation in Greece (FT, £, p11).

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BBA response to discussion paper from the Financial Markets Law Committee https://www.bba.org.uk/policy/financial-and-risk-policy/financial-reporting/accounting-policy/bba-response-to-discussion-paper-from-the-financial-markets-law-committee/ https://www.bba.org.uk/policy/financial-and-risk-policy/financial-reporting/accounting-policy/bba-response-to-discussion-paper-from-the-financial-markets-law-committee/#comments Tue, 21 Apr 2015 14:46:11 +0000 https://www.bba.org.uk/?post_type=policy&p=45610 The BBA has responded to a discussion paper from the Financial Markets Law Committee which considers ways to promote the consistent implementation of regulation agreed internationally.

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BBA Brief – 21 April 2015 https://www.bba.org.uk/news/bba-brief/bba-brief-21-april-2015/ https://www.bba.org.uk/news/bba-brief/bba-brief-21-april-2015/#comments Tue, 21 Apr 2015 09:14:00 +0000 https://www.bba.org.uk/?post_type=news&p=45568 Read More]]> French warning over Greek banks

Yesterday France’s central bank warned that Greece’s banking sector is on the verge of collapse, prompting the euro to fall to 0.6% to $1.074, the Times (£, p39) reports. The paper quotes Christian Noyer, governor of the Bank of France, saying: “At some point, Greek banks are likely to be unable to offer enough collateral to access refinancing even for emergency liquidity.” Little progress was made at International Monetary Fund and G20 meetings to discuss the possibility of Greece satisfying creditors to unlock €7.2 billion in financial aid by the end of April, and yields on Greek debt due to mature in 2017 have hit record highs, the paper writes.

However, in an interview with Politico, European Commission president Jean-Claude Juncker remained optimistic. He is quoted saying: “We are prepared for all kinds of events but I am excluding at 100 percent this Grexit, or Greek exit. There will be no default.”

Bank Levy causes big banks to consider London future

The Telegraph (B3) reports that HSBC chairman Douglas Flint has told Hong Kong investors that once the “mist lifts” in terms of regulation and structural reform in the UK, the bank’s leadership will “start to look at where the best place for HSBC is”. According to the article, HSBC shareholders are expected to push the bank for a change of location for its headquarters following the Chancellor using his last Budget to raise the Bank Levy for a ninth consecutive time. Standard Chartered have also faced calls from shareholders to consider relocation following the balance sheet tax hike. Read the BBA’s response to the Bank Levy announcement here.

Volcker calls for merger of US regulators

The former head of the Federal Reserve, Paul Volcker, has urged the US to follow the UK in streamlining regulation and consolidating the country’s range of financial watchdogs (FT, £, p10). Mr Volcker warned that lending by “shadow banks” is creating unchecked risks, saying: “At this point the non-bank markets are more important than the commercial banking markets and the fact that the regulatory structure doesn’t really reflect that is part of the problem.” He called for the abolition of the Office of the Comptroller of the currency and a merger of the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Latest from the BBA

Next week sees the ninth round of TTIP negotiations. There is a very strong case for including financial services in the Partnership, writes BBA Senior Director Adam Cull.

How could the proposals in the FCA/PRA consultation on whistleblowing affect your organisation? In this briefing paper, Grania Baird and Fiona Lowrie from Farrer & Co LLP consider the consultation paper’s implications.

Assessing capital adequacy under Pillar 2 – In its response to the PRA’s consultation on Pillar 2, the BBA supported greater transparency around the Pillar 2 process that the draft supervisory statement brings, emphasising that whilst capital should not be the only answer  for addressing increased risks confronting banks, investors as suppliers of capital to the banking industry, need to understand the likelihood of additional capital requirements in order to evaluate future returns on capital and the likelihood of additional calls for funding.

Today’s diary

Informal Meeting of Ministers of Labour and Social Affairs in Riga, attended by the Vice-President of the European Commission for the Euro and Social Dialogue, Vladis Dombrovskis.

General Affairs Council meeting – Ministers will identify the Council’s priorities for a future EU Commission proposal on an inter-institutional agreement on better law making.

Stat of the day

32% – the increase in the number of permanent, full-time jobs in the City in the first quarter of this year compared to the first quarter of 2014 (Robert Walters survey in CityAM).

In brief

Small businesses could receive a £2 billion boost as part of the referrals platform being developed and delivered by UK banks (Telegraph, p8). The article quotes the BBA warning of the potential negative effect of new Basel rules which mean that banks will have to treble the amount of collateral they hold for a small company to borrow money.

Wonga is expected to today report losses of £35 million, a year after the Financial Conduct Authority began to regulate the payday lending sector (FT, £, p22). The paper says experts believe Wonga and other lenders must now focus on improving underwriting standards and look to offer other types of loans.

The stockmarkets in Europe and North America received a boost yesterday as a result of “the biggest easing of policy by the People’s Bank of China since the depths of the global financial crisis in 2008” (Guardian).

The Telegraph (B1) reports a survey from the Centre for the Study of Financial Innovation which shows that 73% of finance workers would either “definitely” or “probably” vote to stay in the UK, despite 40% believing Brussels to be hostile to their industry.

Shadow Business Secretary Chuka Umunna has called for more diversity in corporate boardrooms, saying he would aim for them to have at least 14% black and minority ethnic members if the Labour Party win the next election (CityAM, p3).

The European Ombudsman is to investigate so-called “trilogue” talks between the European Parliament, Council of Ministers and the European Commission following concerns about the opacity of the decision-making process when deals on EU laws are struck (Euractiv).

CityAM (p4) reports that firms in the Square Mile are more likely to hire full-time employees than they were a year ago, with 32% more permanent roles available in the City in the first quarter of this year than there were in the first quarter of 2014.

Intensified competition between lenders means that the best mortgage deals are no longer only available to those offering a large deposit, according to mortgage brokers (BBC News).

According to thinktank Conference Board, total factor productivity in Britain fell 0.1% in 2014, raising concerns for Britain’s long-term growth prospects (FT, £, p1). Total factor productivity is a measure of improvements in technology and the efficiency of management.

What the commentators say

Writing in the Times (£, p29), Ed Conway says that despite previously arguing that Greece would be better off outside the euro, he is no longer sure. “Since the start of the crisis [Greece] has already endured so much economic and social pain that putting it through more seems doubly inhumane”, he writes.

In the Telegraph (B4), Andrew Hilton, director of the Centre for the Study of Financial Innovation, says financial services remain the most dynamic part of the British economic and many City workers want the UK to stay in the EU because of the promise of the Single Market and a Capital Markets Union.

In CityAM (p13) the paper’s Digital and Social Media Director, Martin Ashplant, warns that businesses could lose out as Google embarks on a major algorithm change that will see firms whose websites are not mobile friendly drop down its list of search results.

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Assessing capital adequacy under Pillar 2 https://www.bba.org.uk/policy/financial-and-risk-policy/prudential-capital-and-risk/pillar-2/assessing-capital-adequacy-under-pillar-2/ https://www.bba.org.uk/policy/financial-and-risk-policy/prudential-capital-and-risk/pillar-2/assessing-capital-adequacy-under-pillar-2/#comments Mon, 20 Apr 2015 15:24:16 +0000 https://www.bba.org.uk/?post_type=policy&p=45451 Read More]]> In its response to the PRA’s consultation on Pillar 2 the BBA supported greater transparency around the Pillar 2 process that the draft supervisory statement brings, emphasising that whist capital should not be the only answer  for addressing increased risks confronting banks, investors as  suppliers of capital to the banking industry, need to understand the likelihood of additional capital requirements  in order to  evaluate future returns on capital and the likelihood of additional calls for funding.

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