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Article 50 triggered today
Prime Minister Theresa May will today formally trigger Article 50 , and outline her Brexit negotiation strategy in a statement to the House of Commons (The Times, £, p1). She will urge leave and remain voters to come together, and is expected to say that she will, “represent every person in the United Kingdom” (The Guardian, p1).
The Financial Times (£, p1) notes speculation that the Prime Minister has acknowledged the need for transitional arrangements to bridge the gap between the UK leaving the EU and agreeing a new trade deal. Speaking on BBC Radio 4’s Today programme Chancellor Philip Hammond said that he was confident that a deal would be reached, and noted that the letter triggering Article 50 will set out further detail on the UK’s negotiating priorities.
EU blocks Deutsche Boerse and London Stock Exchange merger
The European Commission has blocked the proposed merger between Deutsche Boerse and the London Stock Exchange (Bloomberg, online). Margrethe Vestager, the EU’s Antitrust Commissioner, commented that this $14 billion deal would create Europe’s biggest exchange and harm competition in the soon to be 27 nation EU by creating a, “de facto monopoly for clearing bonds and repurchase agreements.” (FT, £, online).
Banking productivity grew by 1% per year since 2008
ONS data shows that productivity growth in banking, telecoms, electricity and gas supplies, management consultancy, and legal and accounting services have slowed considerably since 2008. The Financial Times (£, p3) notes that banking productivity has grown at 1% every year since 2008, driven by increased regulatory requirements and compliance costs. Commenting on the figures, the BBA said it is, “unsurprising that banking sector productivity growth has yet to return to pre-crisis levels, though we have seen an improvement in recent years.”
Mike Conroy, BBA Executive Director, Corporate and Commercial Banking blogs on SMEs applications for bank finance, and why some firms prefer to defer growth rather than borrow.
Bank of England publishes stress testing scenarios
Recession, inflation and a sharp depreciation of the pound against the dollar form key planks of the Bank of England’s latest stress testing scenarios, with results to be published in Q4 2017 (Evening Standard, p32). The Times (£, p36) reports that the Bank has expressed concerns over the rate of growth in unsecured household borrowing, and will investigate banks’ lending criteria.
New pound coin ‘most secure in world’
The new 12-sided pound coin enters circulation today. It incorporates new security features including such as holograms and micro lettering that will make the new coins the most secure in the world, according to the Royal Mint (BBC News, online). The current round pound coins continue to be valid until 15 October 2015, with The Daily Telegraph reporting Government research showing that members of the public will consider donating them to charity rather than banking or spending them before the deadline.
Government to trigger Article 50 tomorrow
The Prime Minister is expected to trigger Article 50 tomorrow and publish the Great Repeal Bill on Thursday, which will translate EU law into UK legislation. The Guardian (p8) reports that the Prime Minister has confirmed her commitment to securing a Brexit deal within 18 months. While The Daily Telegraph (£, p1) calls for the Government to reduce or remove significant amounts of EU regulations.
UK to retain EU regulation after Brexit
The Financial Times (£, p1) writes that Prime Minister Theresa May may seek to retain oversight by some EU bodies after Brexit, as the UK does not have the capacity to replace them with UK bodies within two years. Bloomberg (online) reports that she intends to publish details on transposing EU law into UK legislation and ensure continuity in the Great Repeal Bill on Thursday. The Financial Times (£, p6) also reports that Brussels may publish its main Brexit negotiating positions, with draft guidelines to be made public 48 hours after the UK triggers Article 50.
First time buyers increasingly rely on family support
34% of first time buyers rely on contributions from family members to help purchase their first home, according to research from the Social Mobility Commission (BBC News, online). First time buyers that receive financial help from their families are, on average, able to buy a home 2.6 years earlier than the national average and 4.6 years earlier in London (The Guardian, p7).
House of Lords calls for more basic bank account provision
Reuters (online) reports that the House of Lords Committee on Financial Exclusion has called for regulators to establish new duty of care requirements for banks. Commenting on the issues raised, Eric Leenders, BBA’s Managing Director of Retail and Commercial said that the BBA will consider the report’s recommendations in detail and reflect on how they might be adopted by the industry going forward.
BBA’s latest high street banking data
Reuters (online only) reports on the BBA’s latest high street banking data, which shows that banks approved the fewest mortgages in three months in February and consumer credit growth slowed slightly despite an increase in credit card borrowing. Commenting on the latest statistics Eric Leenders, BBA Managing Director for Retail Banking, said the “Elevated approval volumes for house purchases and re-mortgaging experienced during the winter months fell back in February, to average levels seen throughout most of last year. He adds that “Businesses continue to exercise a cautious approach to borrowing, using cash reserves and alternative lending sources to finance their operations.”
No Brexit punishment – Jean-Claude Juncker
BBC News (online only) has reported on its interview with EU Commission President Jean-Claude Juncker, during which he insisted that Britain’s EU exit bill will reflect “former commitments” by the British Government, explaining that “there will be no sanctions, no punishment, nothing of that kind”. When asked about the exact amount of any bill, Junker said that “we have to calculate scientifically what the British commitments were and then the bill has to be paid.” When asked about potential negotiating tactics, Juncker said the EU was not in a hostile mood when it comes to Brexit because it wishes to have a friendly relationship with Britain in the next decades.
In other Brexit related news, Reuters (online only) has reported that the European Commission could introduce EU passporting and lower regulatory requirements for financial technology firms, which could undercut London’s leading position in “Fintech” as Britain gets ready for Brexit. The EU executive’s vice president Valdis Dombrovskis is quoted saying that the Commission is considering how to regulate the expanding sector to encourage its development in Europe, while protecting consumers from risks that may emerge.
Inflation may not lead to rate rise
The Times (p42) reports on Office for National Statistics figures which show increased footfall on the high street in February. But it was not enough to prevent retail sales from recording their biggest quarterly fall in nearly seven years. Rising inflation and higher fuel prices in particular, ate into households’ disposable income, leaving less for other purchases.
The Times (p40) also reports on comments from MPC member Gertjan Vlieghe who has said that rises in inflation will not make him consider raising interest rates. The article outlines Vlieghe’s view that much of the inflationary pressure is the result of sterling’s devaluation and the consequent rise in prices of products such as fuel and food. He expects inflation to head towards three per cent by the end of the year before starting to fall. However, Ben Broadbent, the Bank’s deputy governor for monetary policy, who has raised the prospect of faster interest rate rises than the market was expecting. “It’s quite possible that interest rates could go up. It’s quite possible. Our forecast was conditioned on pretty gentle rises but rises nonetheless,” he said. The article also states that markets expect a first rate rise in the second half of next year.
Iris Kapelouzou, BBA Retail Policy Adviser, blogs on the work of the BBA Vulnerability Taskforce and the latest developments in improving outcomes for customers in vulnerable circumstances.
Eric Leenders, BBA Managing Director for Retail Banking said:
“Elevated approval volumes for house purchases and re-mortgaging experienced during the winter months fell back in February, to average levels seen throughout most of last year. Consumers’ use of credit cards and personal loans reflect last month’s increased spending figures.
“Businesses continue to exercise a cautious approach to borrowing, using cash reserves and alternative lending sources to finance their operations.”
Tyrie urges government to have a single official responsible for managing cyber threats
Treasury Select Committee Chairman Andrew Tyrie has called on the Government for a clearer chain of command for managing cyber threats. The Treasury Committee chair published correspondence with the Chancellor calling for the Government to appoint a single official responsible for managing cyber-attacks against financial firms, who would be accountable directly to a single Minister (Telegraph, £, B1). Tyrie writes in his letter that “it is essential that the intelligence community, regulators and wider government are coordinated in making sure that financial cyber crime has a high priority, and is not subordinate to other work. Such a lack of coordination will inevitably lead to greater opportunities for criminals to exploit vulnerabilities in the banking industry’s IT systems” (CityAM, p4).
Barnier warns of the risks of a disorderly Brexit
In a speech to EU regional officials the EU Commission’s Brexit negotiator Michel Barnier warned that a disorderly exit would lead to “total uncertainty” for citizens and breakdowns in trade links for consumers and businesses (Politico, online only). Barnier also used his speech to state that guaranteeing the rights of European citizens, in the long term, will be an “absolute priority from the very start of the negotiations” (Reuters, online only). In his wide ranging speech he also supported the UK Prime Minister’s call for a bold free trade agreement but the EU negotiator warned that any new partnership would “take time” and that transitional arrangements may be necessary (FT, £, p7). Bloomberg (online only) reports that according to a leaked memo EU officials are also preparing for the UK to walk out of the Brexit negotiations.
Cheques will be cleared within one day
The Telegraph (p13) and the i (p40) report that the time in which it takes for cheques to be cleared will be reduced to within one working day. Under the new arrangements, co-ordinated by the Cheque and Credit Clearing Company, banks will be able to clear cheques by exchanging pictures of them, which mean customers will no longer need to go to a branch to pay in their cheques. BBC News (online only) adds that the changes will be phased in from October 2017 although it will be the second half of 2018 before all UK banks and building societies are able to offer the faster service.
City backs drive to push women into senior roles
The FT (£, p2) reports that an extra 33 firms, employing 33,000 staff, have recently signed up to the Women in Finance Charter. The total number of committed firms now stands at 122, with a collective staff of over half a million – half of the country’s finance workers. The Charter, launched a year ago, calls for financial service companies to commit to hard targets for promoting women and to publish how they progress towards those targets. Baroness Neville-Rolfe, Treasury commercial secretary, commented that the initiative has “made a strong start” but that the figures were “just the beginning”.
House of Lords warns of need for free-trade agreements for services sectors
City AM (online) writes about a research paper published by the House of Lords EU Internal Market Sub-Committee, which argues the Government must seek a comprehensive free-trade agreement for non-financial services sectors. The paper says that failing to do so would “undermine” any agreement secured for the financial sector. “Walking away from negotiations without a deal would badly damage U.K. plc,” said Lord Whitty on the BBC Today programme.
Mark Carney addresses banks’ loss of public trust
At a Banking Standards Board event yesterday, Mark Carney, the Governor of the Bank of England, recognised that in the past decade, “banking has suffered twin crises of solvency and legitimacy”. He praised efforts by the Bank, the FCA and the Treasury to improve compliance and conduct regulation. He argued, however, that improvements to regulation could only extend so far, and that the financial services sector should place a “greater emphasis on more compelling ex ante incentives for individuals” to behave ethically. (The Financial Times, £, p3)
May to launch Brexit talks on Wednesday 29 March
Many of the papers (including The i p1, Guardian p1) carry on their front page the announcement by the PM that Article 50 will be triggered on Wednesday 29 March. The FT (£, p1) adds that Tim Barrow, the UK’s Ambassador to the EU, informed Donald Tusk of the news on Monday morning, to which he responded by saying draft Brexit guidelines would be issued to the remaining EU27 members within 48 hours of receiving the formal notification. In other Brexit related news, the Daily Telegraph (£, p1) reports that MPs from both sides of the debate, have warned the BBC that it risks undermining Brexit, and damaging the UK’s reputation, with its “pessimistic and skewed” coverage.
High street banks ‘exploited’ by Russia to launder $740m
The Guardian (p.1) reports that 17 UK-based banks, or with branches here, are among those facing an investigation into what they knew about an international money-laundering scheme run by Russian criminals and why they did not take more preventative measures and reject the funds (The Times, £, p2).
Bad bosses blamed for holding back UK Growth
The Daily Telegraph (BP, £, p1) reports on comments from the Bank of England’s Chief Economist Andy Haldane, who has warned that bad managers are “holding back economic growth in the UK by undermining productivity, preventing pay and living standards rising”. He adds that most companies do not even realise they are performing poorly, and suggests potentially high returns from policies which improve the quality of management within companies.
City calls for measures to retain UK competitiveness
The Financial Times (£, p3) reports that City organisations have called for steps to ensure the UK remains competitive after Brexit, including measures to encourage FinTech, employment of skilled labour and a proportionate approach to taxation. BBA Chief Executive Anthony Browne highlighted the need to normalise bank taxation.
FCA sets out priorities for FinTech
Christopher Woolward, FCA Director of Strategy and Competition, sets out the regulator’s approach to FinTech (City AM, p12). Around 70 firms have applied to be part of the FCA’s regulatory sandbox, which allows companies to trial innovative products, noting customers are likely to see rapid change in the types of products available to them. He also warned against using Brexit as an opportunity to create a “bonfire of regulation” noting that the UK’s reputation rests on the high quality of it’s market structures and operating environment.
Government may consider 10-year interim Brexit deal
Politico (£, online) reports that the Government is exploring a 10-year interim trade deal that would set tariffs at zero if a trade deal is not agreed as part of the formal Brexit negotiations. Citing WTO rules that would allow the UK and Brussels, “a reasonable length of time to agree a free trade deal”. The Daily Express (online) notes that this would reduce fears of a damaging cliff-edge when the UK leaves the single market.
Welcome to my newsletter. Like the weather, the Government’s plans for Brexit are beginning to heat up. With the Prime Minister preparing to trigger Article 50, we continue to highlight the industry’s need for clarity to stakeholders in the UK and across Europe.
Bank of England holds interest rates but decision was split
Interest rates were held again yesterday after the Bank of England’s Monetary Policy Committee (MPC) voted to keep interest rates at 0.25pc (The FT, £, p3). However, the decision was split for the first time in eight months, with Kristin Forbes the only one of the nine members voting to raise rates (The Guardian, p31). Forbes, pens an op-ed in The Daily Telegraph (£, online, p2) explaining her contrarian view: “Monetary policy will continue to be set to keep inflation at around 2pc on a sustainable basis, taking into account our assessments of any trade-off with growth and unemployment. And, in my personal assessment, this trade-off has fundamentally changed. […] the inflation side of the trade-off has worsened.”
German Finance Minister calls for London to remain strong financial centre
Wolfgang Schauble, the German Finance Minister, delivered a keynote speech at the International Finance Conference in Frankfurt yesterday and indicated his hopes for negotiating a Brexit deal that keeps the UK’s key global role in financial services (Telegraph Business, p1, paper only). He said: “I am convinced that for Europe as a whole – and I’m not sure this will be very beloved in Paris – it’s in our own interest to have a strong financial centre in London” (City AM, p3). Downing Street stated that it had taken “great interest” in Schauble’s comments (Daily Mail, p10).
Treasury Select Committee Chair raises concern to FCA Chief about potential ONS data leaks
Andrew Tyrie MP has written a letter to Andrew Bailey, FCA Chief Executive, urging the regulator to examine whether “ONS statistics may be being leaked prior to their official release, and that this information is being used for inappropriate gain in financial markets” (The Daily Telegraph Business, p5, paper only). Tyrie’s request follows analysis conducted for the Wall Street Journal which showed that UK government-bond futures often rise and fall as would be expected if some traders were in possession of economic data in the 24 hours before the public release of sensitive ONS data. Bernard Jenkin MP, Chair of the Public Administration and Constitutional Affairs Select Committee, has also said his committee will discuss this issue and that “even circumstantial evidence of the breach of pre-release access undermines faith in the whole system.”
Germany to make concessions on Basel III
The Financial Times (£, online) writes that German officials have signalled that “real progress” has been made in discussions around the introduction of an output floor into models for calculating capital requirements. Previously, it had been proposed that the floor should be set at 75%, with a phase-in period starting at 55%, however the paper reports that, “people familiar with Basel discussions said that the 55 per cent to 75 per cent range had now significantly narrowed”.
£2 million per day lost to fraud
The Daily Mirror (p10) reports on data from FFA UK that criminals steal personal details and credit or debit card information from approximately 5000 customers, with up to £2 million lost to fraud, every day. Commenting on the findings, FFA UK Director Katy Worobec highlighted a, “significant problem with fraudsters using increasingly sophisticated methods to circumvent bank technology and target victims”. The full report is available here.
Government to set up new anti-money laundering body
The Daily Telegraph (£, online) notes that the Government will set up a new body to tackle money laundering and address the gaps in oversight of existing money laundering regulations. The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) will sit within the Financial Conduct Authority (FCA) and is due to launch next year (City AM, p7).
Theano Advisors’ Benoît Barrière and Laurent Coulon blog on the non-finance firms with the capital and systems to move into markets traditionally dominated by banks.
Banks ‘at risk’ of leaving UK unless transition plan in place
London Mayor Sadiq Khan has called for the Government to prioritise an early deal on interim arrangements for Brexit, “warning that banks “can’t wait” for the full two-year negotiation to be concluded” (Evening Standard, online). Giving evidence to a committee of MPs yesterday he said that although banks, “love being in London, because of the technology, the talent, the finance, the legal services, our court”, they will have no choice but to leave unless transitional arrangements are set out when Article 50 is triggered (Sky News, online).
Identity theft reaches record levels
Fraud prevention service CIFAS has found that there were 172,919 incidents of identity fraud last year BBC News (online). 88% of fraud was committed online and nearly 15% of victims were under 30, with the number of under-21s defrauded rising by a third, driven by the volume of data they share on social media. Read the BBA’s tips for consumers to help protect against online fraud.
30% Club: Diversity and development opportunities decline with seniority
A report published today by the 30% club has found that, “the chronic shortage of senior female executives can be linked to how people are managed”. The report comes as the Bank of England is encouraged to prioritise diversity as it looks for replacements for Kirsten Forbes and Charlotte Hogg to join the MPC (Financial Times, £, p1). The BBA’s Diversity and Inclusion report highlights the steps banks have taken to increase diversity and improve culture.
Ariane Poulain, BBA Government Affairs Manager writes on banks’ contribution to local communities and employment.
Article 50 to be triggered after 27 March; SNP calls for second referendum
MPs and Lords have approved the Bill that will allow the Government to trigger Article 50. The Daily Telegraph (£, p) has reported that the Government is expected to do this after 27 March. Scotland’s First Minister Nicola Sturgeon has called for a second Scottish independence referendum between Autumn 2018 and Spring 2019 (The Guardian, p1). The Times (£, p6) reports that support for independence has increased to 51% since Prime Minister May confirmed the UK would leave the single market.
The Banking Standards Board publishes bank staff survey
The Banking Standards Board (BSB) has published a survey of 28,000 bank staff across 22 firms. BSB Chair Dame Colette Bowe highlighted findings on health and well-being, noting that the responsibility to ensure these figures improve lies, “fairly and squarely on the shoulders of the Board” (City AM, p6). The survey also found that 13% of staff said they might not be able to get ahead in their own careers without flexing their own ethical standards (Financial Times, £, p2).
Hackers target phones, TVs and watches with ransomware
The National Cyber Security Centre and National Crime Agency (NCA) have published a report saying that criminals are using software to exploit vulnerabilities in consumer devices and demanding money from users to make them operational again (The Daily Telegraph, £, p11. Speaking on BBC Radio 4’s Today programme, Donald Toon, the NCA’s Director of Economic Crime warned that criminals could use internet-enabled consumer goods to power, “distributed denial of service attacks” against banks and other businesses.
Simon Hills, BBA Executive Director of Prudential Regulation and Risk, blogs on the PRA’s proposed changes to the Pillar 2 framework.
Navigant’s blogs six key questions that firms have to address when implementing the FCA’s new financial crime reporting requirements.
Article 50 ’could be triggered tomorrow’
The Bill that allows the Government to trigger Article 50 could be agreed today, with MPs expected to reject changes made to the Brexit bill in the House of Lords requiring a Parliamentary vote on the deal and an early commitment to safeguard EU citizens’ rights (BBC News, online). The Financial Times (£, p1) speculates that the Prime Minister may trigger Article 50 as early as tomorrow and is expected to do so by the end of the week.
SNP could call for second independence referendum this week
Sky News (online) reports that SNP leader Nicola Sturgeon may call for a second referendum ahead of the SNP’s party conference on Saturday if Article 50 is triggered this week. The Daily Telegraph (£, p1) reports that the SNP wants to retain full single market access, and may issue an “ultimatum” to the UK Government asking for a bespoke Brexit deal for Scotland in exchange for not calling for a second independence referendum.
Review of economic crime enforcement agencies
The Financial Times (£, p2) reports that the Government is reviewing the bodies that enforce economic crime regulations, noting that the Serious Fraud Office may be incorporated into another agency. Home Secretary Amber Rudd said the review, “will include looking at the effectiveness of our organisational framework and the capabilities, resources and powers available to the organisations that tackle economic crime.”
Prime Minister to ‘protect’ City during brexit talks
Prime Minister Theresa May has said that she will seek to protect the UK’s role as a global financial centre during Brexit negotiations in recognition of the contribution banks make to the British economy (Sky News, online). Guy Verhofstadt, the European Parliament’s chief Brexit negotiator has told BBC Radio 4’s Today programme that UK nationals should be able to retain certain rights, such as freedom of travel, but warned that the European Parliament will have veto powers to reject any deal brokered between the UK and EU (BBC News, online).
Second Scottish referendum ‘inevitable’
Reuters (online) reports that a second Scottish referendum is seen as inevitable by Government Ministers, despite Prime Minister Theresa May repeatedly dismissing the need for such a vote. The Financial Times (£, p2) notes that an Ipsos Mori poll published yesterday shows an equal split between Scots in favour of independence and remaining in the UK.
FCA and JFSA to cooperate on Fintech
The UK’s FCA and Financial Services Agency of Japan (JFSA) have set up a regulatory referral system to help innovative financial services businesses enter each other’s markets (Banking Technology, online). Christopher Woolard, the FCA’s Executive Director of Strategy and Competition, said: “we are committed to encouraging innovation that has the potential to be of benefit to consumers using financial services here in the UK.”
Mike Conroy, BBA, Executive Director, Corporate and Commercial Banking said:
“Our SME lending data consistently show that banks say ‘yes’ to 8 in 10 applications for finance and in Q4 2016, over £5 billion of new lending was approved across the regions and industry sectors. Total lending to SMEs stands at £110 billion and within that, use of structured loans increased by £1.5bn (net) last year, suggesting improved business investment. However, total applications for bank finance were 9% lower last year, as businesses explored alternative options such as leasing finance, or continued to build their cash reserves to finance operations.”
Chancellor delivers final Spring Budget
Sky News (online) summarises key changes announced in yesterday’s Budget, including changes to NICs for the self-employed, £2 billion social care funding and the introduction of technical T-Level qualifications. Significantly, the Budget confirmed the UK as the second-fastest growing economy in the G7 in 2016, and sought not to surprise the markets ahead of the triggering of Article 50 at the back end of March.
Banks forecast to pay £27bn tax through the bank levy and surcharge
City AM (p1) reports that banks are expected to pay GBP27bn from the bank levy and corporation tax surcharge between 2015-16 and 2021-22. The Financial Times (£, p9) notes that this is £400 million more a year than initially forecast. Commenting on the Office of Budget Responsibility data, the BBA said, “while banks expect to pay their fair share of tax, the industry has now been subject to five bank-specific tax measures since 2010. We believe it’s time the government draw a line in the sand; hold a strategic review of bank taxation and confirm the surcharge will be scaled back as corporation tax receipts normalise.”
Autumn 2018 for potential second Scottish Independence vote
Scottish First Minister Nicola Sturgeon has said that Autumn 2018 would be a “common sense” date for any second independence referendum (Reuters, online). SNP economic spokesman Stewart Hosie told BBC Radio 4’s Today programme that no decision to call for a second referendum had been taken, although the prospect of a, “hard Tory, cliff-edge Brexit” might make this more likely (BBC News, online).
The Financial Times (£, p1) expects the Chancellor to deliver an economically defensive “Brexit Budget” maintaining a £27 billion war chest, ahead of the “imminent” triggering of Article 50.
The Daily Telegraph (£, p1) writes that the Budget will contain an upbeat assessment of the UK’s economic condition, with £1.3 billion expected to be spent on business rate relief and social care.
The Daily Mirror (p34) has called for the Chancellor to simplify the savings landscape, noting that the introduction of the lifetime savings ISA risks leaving customers without adequate retirement savings.
Government seeks to overturn Brexit Bill amendments
The Guardian (p4) reports that the Prime Minister will seek to overturn amendments made by the House of Lords to the Bill that would allow the government to trigger Article 50. Bloomberg (online) reports that MPs are likely to decide whether to reject these amendments in a vote on Monday next week.
Partial progress in increasing board gender diversity
The Financial Times (£, special report, p1) reports that progress in encouraging gender diversity has been mixed, with more women on boards overall but concentrated in fewer companies. It sets out four ways to increase gender diversity across the workforce, including public reporting against set goals. The BBA’s most recent gender diversity factsheet sets out progress on diversity and inclusion in banking.
Sam Mannion, BBA Capital Markets Policy Advisor, on the latest developments on unique product identifiers.
The Guardian (p1) reports that the Chancellor will invest £320 million in 140 new schools, many of which are expected to be selective grammar schools.
The Telegraph (£, p4) reports that the Budget will not include reforms to stamp duty, although it is understood that Treasury officials have recently reviewed potential reforms.
The Independent (p4) reports that the Chancellor may change rules on capital gains tax and restrict pension relief for high earners to raise revenue, with total tax increases of £3 billion expected to be announced tomorrow.
Brexit costs and clearing relocation
The Times (£, p43) reports that some EU banks are considering re-registering their UK entities as third country branches, which is likely to increase costs and require more intensive regulatory supervision of their activities. German Economic Minister Tarek al-Wazir has said that he expects Euro-clearing to relocate to Frankfurt and other EU 27 locations after Brexit, noting that EU “needs access if anything goes wrong” (City AM, p2).
Claude-Vincent Gillard, Chief Production Officer, Bureau van Dijk, blogs on how analysts can enhance stress testing analysis with wider data sets to evaluate banks’ performance.
The Times (£, p1) anticipates that the Budget will include business rate relief for small businesses.
The Financial Times (£, p1) expects the Chancellor will increase taxes, and potentially increase National Insurance contributions from self-employed workers.
Sky News (online) speculates that the Government will invest in the UK’s digital infrastructure, with up to £270m earmarked for research and development initiatives including artificial intelligence.
35,000 staff to be assessed under Certification regime
The Sunday Times (£, online) reports that up to 35,000 bank staff including mortgage advisers and junior investment bankers will be assessed under the FCA’s Certification regime. FCA Chief Executive Andrew Bailey said the annual requirement to confirm staff are fit and proper to carry out their roles is intended to create an environment where staff are clear about the consequences of their actions (City AM, p13).
PRA considers changes to capital rules for smaller banks
The Daily Telegraph (£, online) writes that the PRA is considering measures to promote competition in retail banking by making it easier for small banks to use the internal ratings-based model approach to calculate their capital requirements. Eric Leenders, BBA Managing Director, Retail and Commercial Banking, said: “ultimately, it’s customers who benefit the most from competition and while policy makers should be recognised for their efforts to promote this, a ‘one size fits all’ approach to capital and regulation needs to be avoided.”
BBA Chief Executive Anthony Browne has responded to comments by Martin Stewart, Director of Banks, Building Societies and Credit Unions, Prudential Regulation Authority, at BBA Conference ‘The Challenger and Specialist Banks’ Landscape in the UK’ taking place this morning, Friday 3 March 2017.
Government to include stocks and shares ISAs and pensions in dormant account scheme
Speaking on BBC Radio 4’s Today programme Minister for Civil Society, Rob Wilson MP said that the Government will extend the scheme to use money from dormant bank accounts for charity to include insurance policies and shares. Under the new rules, life insurance policies must have been unclaimed for 120 years before they can be distributed to charity, while money in bank accounts should have been dormant for 15 years (The Daily Telegraph (£, p1). The mylostaccount service helps you trace lost accounts and savings.
Bail-in uncertainty is damaging EU banks
Credit rating agency Moody’s has said that delays in implementing new European rules on loss-absorbing debt, designed in response to the financial crisis, are posing a risk to European banks’ financial stability (Financial Times, £, online). Moody’s cited confusion over different regulatory approaches as “credit negative” for senior bondholders, noting that, “creditors of banks continue to lack certainty over the extent to which liabilities may be expected to absorb losses in a bail-in.”
May to fight amendments to Brexit Bill
Bloomberg (online) reports that Prime Minister Theresa May will seek to overturn amendments to the Government’s Brexit Bill made by the House of Lords. The Government is expected to reject the amendment, which focuses on the rights of EU nationals to remain in the UK after Brexit.
Brexit campaigner Gina Miller has suggested that she would consider taking further legal action if Parliament is not given a further “meaningful” vote on the final deal (The Times, £, p11).
PM determined to trigger Article 50 within two weeks despite Lords setback on Brexit Bill
The Government suffered its first defeat on the Brexit Bill last night as the House of Lords voted 358 to 256 in favour of amending the Bill to guarantee the rights of EU citizens living in the UK within three months of Article 50 being triggered. The Bill will now return to the Commons and MPs will have the opportunity to reject the Lords amendment. Despite the setback, it is widely reported today that the Government is confident the amendment will be removed and that the timetable “remains unchanged” (Daily Telegraph, p1) with Article 50 expected to still be triggered within the next two weeks. The Guardian (p1) reports a Government source saying that “the intention is to seek to overturn this in the House of Commons” and that they are determined to pass a “straightforward, simple bill”. However, Crossbencher Baroness Meacher has warned of a rebellion and said: “…there are 30 Tories who are saying they will vote to support this amendment” (Independent, online only).
FCA sets PPI claim deadline
The FCA has ruled people seeking compensation for mis-sold PPI must make their claims before the 29th of August 2019 (BBC). The consumer watchdog set out plans to run a two-year public awareness campaign, as amidst the millions who’ve already been compensated, many more have yet to claim. Under new rules, claimants who were rejected previously may now be eligible, and the regulator feels the new campaign and deadline will prompt more consumers to act quickly rather than putting it off (Sky News).
Reforms to IPOs
The Financial Times (£, p1) reports on mooted FCA reforms addressing rules for initial public offerings to address concerns about investment banking instructions being won with favourable analyst research. The newly proposed policy measures seek to improve both the quality of information available and the timing with which it is received, during the IPO process (City AM, p5). City experts welcome the amendments yesterday, which would require businesses to share more research with independent experts who could properly scrutinise plans (Daily Mail).
Financing Growth has been produced to help small to medium-sized businesses identify some of the different finance options that may be available to expand their business, including information, tips and Read More
Article 50 triggered today Prime Minister Theresa May will today formally trigger Article 50 , and outline her Brexit negotiation strategy in a statement to the House of Commons (The Read More
Banks continue to say ‘yes’ to 8 in 10 applications for finance and 6 in 10 SMEs say they are confident that their bank would agree to a future request Read More