26th Nov 2015 Back to top
  • Banking in the Digital Era – Regaining Consumer Trust

    Amid wavering consumer confidence, changing banking behaviours, and new competition, Cognizant’s Steven DeLaCastro blogs about what traditional banks can do to rebuild trust in the digital era.

  • BBA Brief – 26 November 2015

    Fiscal watchdog warns that apprentice levy could damage growth

    Following the Chancellor’s Autumn Statement yesterday, many papers report warnings by the Office for Budget Responsibility, the official spending watchdog, that the 0.5 percent apprenticeship levy on the payroll of firms over 100 employees, would damage wage growth. The FT (£, p5) reports the OBR as saying that the levy is “economically equivalent to a payroll tax, so — consistent with evidence on the incidence of such taxes — we assume that most of the cost will ultimately be borne by employees”.  The warning added to a chorus of discontent from business about the levy’s scope, effectiveness and design. “We do not like the apprenticeship levy,” said Simon Walker, Director General of the Institute of Directors. “It is nonsense to call it an ‘apprenticeship levy’ — it is a payroll tax, pure and simple”. Carolyn Fairbairn, the new Director General of the CBI, added that the levy would affect more companies than anticipated and was the real “sting in the tail” of the Autumn Statement.

    Banks approve 100 mortgages an hour

    All papers cover the BBA’s monthly high street banking stats, which show that banks have approved £12.9bn worth of home loans in October, up 26 percent year-on-year and the highest value since July 2008. The Times (£, p56) reports the BBA’s Chief Economist Richard Woolhouse, saying: “these statistics show that housing market activity remained strong in October. Consumers remain confident and their incomes are growing. Mortgage rates are at multi-year lows and people are snapping up the very competitive deals being offered by banks”. The Guardian reports how the jump has been fuelled by record low mortgage rates. Lenders have seen a rush of borrowers taking out deals and remortgaging before speculation returns of an imminent interest rate rise, pushing borrowing levels to a post-financial crisis record. The BBA’s figures also showed there had been growth in borrowing by the wholesale, retail and manufacturing sectors, while lending to construction and real estate is still contracting.

    ECB warns of emerging market triple shock

    The Telegraph (B4) reports the European Central Bank (ECB) warnings that waning growth in emerging market economies has become an issue of “particular concern” to the financial stability of the Eurozone. The bank’s twice yearly financial statement highlighted that the “vulnerabilities stemming from emerging markets are increasing” and that China was still “of particular concern”, despite markets recovering over the summer. The FT (£, p16) adds that the central bank warned “a faster than expected withdrawal of monetary-policy accommodation” by the Federal Reserve could trigger a fresh bout of volatility.  It came as the central bank announced that it would pause its €1.1tr bond buying programme over the Christmas and New Year holidays to “reduce possible market distortions” associated with lower levels of liquidity. Policymakers have voiced increasing concern about risks facing emerging markets. The International Monetary Fund (IMF) warned in October that emerging markets should “prepare for an increase in corporate failures”.

25th Nov 2015 Back to top
  • 4 Essential Elements of an Effective Model Risk Management Foundation

    Clayton Mitchell, Senior Manager at Crowe Horwath LLP, blogs about the importance of building a strong model foundation.

  • BBA Brief – 25 November 2015

    Chancellor to focus on housebuilding in Autumn Statement

    The FT (£, p1) reports that the Chancellor will today announce the biggest housebuilding drive since the 1970s in the Autumn Statement. He is expected to promise to build more than 400,000 new homes across England, as part of a £6.9 billion programme to encourage people to buy their own homes. The Daily Telegraph (p14) reports that the Chancellor is expected to say: “…there is a crisis of home ownership in our country. We made a start in the last parliament, and with schemes like Help to Buy the number of first time buyers rose by 60 per cent. But frankly we need to do much more.” The Chancellor is also expected to set out plans to cut welfare, but could be forced to delay his proposals to reduce tax credits.

    Bank of England Governor before Treasury Select Committee

    The Times (£, p1) splashes on a report ‎that the Bank of England is planning a ‘backdoor interest rate rise’ to curb a potentially dangerous credit bubble. Governor Mark Carney told MPs on the Treasury Select Committee yesterday that the debt burden on households was significant and the Bank’s Chief Economist, Andy Haldane, warned that unsecured lending – in particular personal loans – was “picking up at a rate of knots”. The FT (£, p4) reports that the Governor hinted the Financial Policy Committee may decide to take further action to restrict such lending, including potentially raising capital requirements for banks.

    Treasury agrees to meet with challenger banks regularly

    The Daily Telegraph (B1) reports that the Treasury has agreed to meet with challenger banks at least four times a year. The paper reports that the new challenger bank high level advisory group will be chaired by the Treasury’s top financial services official, Charles Roxburgh. A memo seen by the Telegraph states: “The group will consider issues – be they of a policy, regulatory or legal nature – relevant to helping challenger banks to enter the market, expand and compete effectively with the incumbents.”

    Meanwhile, the FT (£, p4) highlights the contrasting capital requirements for challenger banks compared to their larger rivals due to the different models used. James Daley, founder of consumer group Fairer Finance, said: “Clearly there’s a problem – if there’s appetite for new lenders to get involved, then government and regulators have a duty to bring down barriers to allow competition for UK consumers.”

  • October 2015 figures for the high street banks

    Richard Woolhouse, Chief Economist at the BBA, said:

    “These statistics show that housing market activity remained strong in October, with gross mortgage borrowing 26 per cent higher than a year ago and at its highest level for seven years.

    “Consumers remain confident and their incomes are growing. Mortgage rates are at multi-year lows and people are snapping up the very competitive deals being offered by banks.”

24th Nov 2015 Back to top
  • BBA Brief – 24 November 2015

    Autumn Statement anticipation

    Speculation on the Autumn Statement is the main focus of the papers this morning. The FT (£, p2) looks at the scale of expected privatisations including of state-owned banks. The Daily Mail (p2) reports on the multi-billion pound increase in funding to the NHS expected to be announced tomorrow. Aditya Chakrabortty argues in the Guardian that Britain has “shrunk its public services for the benefit of its crisis prone banking sector” on its way to becoming “Austeria”. The Times (p32) focuses on the problems the Chancellor is facing thanks to large parts of the Government’s spending being ringfenced.

    The Government’s Defence Review

    There is widespread coverage today of the defence spending review. According to the Telegragh (B2, paper only), there will be an increased role for start-ups in the defence industry. The Guardian (p8-9) runs a two page review of the Government’s defence spending plans looking particularly at the potential risks that cyber attacks pose to the Trident nuclear programme. The Times (p9) covers comments made yesterday by the Government that cyber attacks on the UK will be treated as conventional military attacks when appropriate.

    Rift in ECB

    Sabine Lautenschläger, a member at the ECB’s Executive Board, said yesterday that she saw no need for any additional monetary policy measures or an extension of the central bank’s asset purchase program, Reuters reports. Her comments come even as ECB President Mario Draghi pledged last week to do more if required, as he outlined the positive economic impact of the bank’s bond-buying scheme.

    According to figures released yesterday, in the week of Nov. 16 the ECB purchased public sector assets of about €12.57 billion under its quantitative easing program (Reuters). The central bank’s purchases under the program were recorded at about €12.58 billion for the week of Nov. 9. In a separate report published yesterday, the ECB said that while the leverage ratio may tempt banks to increase risk taking due to the ratio’s non-risk based nature, it also increases the stability of banks by constraining the build-up of excessive leverage.

23rd Nov 2015 Back to top
  • How mentoring can help businesses rise to the top

    Tim Rivett, BBA Mentoring Manger, blogs about the Mentorsme Excellence in Enterprise Mentoring Awards

  • BBA Brief – 23 November 2015

    Banks should foot bill for fraud

    A senior commander from the City of London police has demanded that banks help pay for the fight against fraud (Times, £, p2). Commander Chris Greany, who is responsible for Action Fraud and the National Fraud Intelligence Bureau, said “we need to have more support from the industry to help us fight fraud”. He added he was not sure whether that means that banks should invest cash or manpower, but that a partnership was needed to help police tackle what has become an “enormous problem”. However, Steve White, chairman of the Police Federation, said “asking banks for money looks like a desperate cry for help…what officers need is the cooperation of banks”.

    His comments coincide with two studies released today on the extent of cyber crime. A report released by Deloitte discovered that 21 per cent of UK consumers had seen their details stolen and their bank accounts used to buy goods or services in 2015, five times as many people as two years ago (Times, £, p19). Another survey released today by security software company Norton by Semantic found that 22 per cent of Brits have fallen victim to cyber crime in the last year, at a total cost of £1.6 billion (City AM, p10).

    New CBI boss warns that uncertainty over EU membership is hitting investment

    Carolyn Fairbairn, the CBI’s new Director General, has urged Prime Minister David Cameron to accelerate plans for the UK’s referendum on its EU membership, warning that investment is beginning to suffer due to uncertainty caused by a protracted renegotiation (City AM, p1). Ms Fairbairn said, “I think uncertainty is playing into business decisions…we’re beginning to hear of business investment that’s slowing down”.

    The UK is due to hold the referendum before the end of 2017 and Ms Fairbairn is of the opinion that “if that could be done quickly, we think it would be good for business”. Ms Fairbairn believes that it is the role of business to put the “economic case” for membership, although she acknowledged that some businesses who want to stay in the EU are “frustrated” by it (FT, £, p3).

    Money launderers push billions through UK firms each year

    The UK’s anti-money laundering (AML) rules are not fit for purpose and require a “radical overhaul” according to a report released today by Transparency International (Times, £, p11). The report finds that billions of pounds of corrupt funds are pouring into the country every year. The report also finds that the current system of supervision and enforcement, which relies on 22 separate agencies, is structurally unsound and recommends replacing the current “patchwork” with one super-supervisor. While reporting of suspicious activity “appears to be inadequate in almost all sectors”, Transparency International credits the Financial Conduct Authority for having the most effective supervision (FT, £, p4).

20th Nov 2015 Back to top
  • BBA Brief – 20 November 2015

    Investors spoiled for choice as European lenders seek capital

    As ABN-AMRO prepares to float, the FT (£, p18) reports how European banks in the UK, the Netherlands and Greece have raised more than $75bn from investors worldwide so far this year, according to Thomson Reuters. Given all the bank equity still to be issued in Europe this year, it is on course to top last year’s $93bn total, though it remains well below the record $236bn raised in 2009 when the financial crisis forced many banks to raise capital. James Chappell, banks analyst at Berenberg, says investors remain cautious about investing in Europe’s banks: “people are quite uncertain about the economic outlook at the moment in Europe and you have uncertainty around regulation”.

    Chip and Pin could vanish by 2020

    The Telegraph (p14) reports that the four-digit Pin will be phased out by 2020 according to experts, as banks push hi-tech ways to pay including fingerprint-readers and mobile phones.

    Banks such as Halifax and Barclays believe that chip and pin is flawed and open to fraud so will therefore be obsolete within the next five years. Banks will nudge customers to use hi-tech readers or contactless payments in shops and ticket terminals instead of the typical “Chip and Pin” by arguing it is safer and offering discounts for using the new technology.  David Webber of Intelligent Environments, which provides mobile payments software to banks said: “many customers fail to observe basic Pin security measures which demonstrates a dangerous ambivalence, putting them at risk”.

    Mortgage lending at highest level since 2008 after surge in new mortgages

    The Times (p46) reports that house price growth in the UK’s biggest cities will return to double digits this year as activity in markets that have been slow to recover from the financial crisis begins to heat up. This has been largely driven by large cities outside southern England, whose housing markets have been slow to recover but are now experiencing a revival. Separate figures from the Council of Mortgage Lenders found that gross mortgage lending reached £21.8 billion last month, 8 per cent higher than £20.1 billion in September. “As lending in the regulated mortgage space picked up over the summer months, the pace of recovery has improved. This looks set to continue over the closing months of the year with the factors helping support this recovery continuing to be low inflation, strong wage growth, an improving labour market and competitive mortgage deals,” said Bob Pannell, chief economist at the CML (Telegraph, B1).

    ECB mooted monetary stimulus in October

    Ahead of a crucial re-examination of the bank’s policy strategy on December 3, the FT reveals (£, p8) that the European Central Bank (ECB) seriously considered ramping up monetary stimulus as early as October. The publication of a set of accounts show that weak regional and global growth, as well as the Federal Reserve’s resistance to raising rates, almost forced the ECB to act sooner. The ECB is expected to announce a revamped €1.1tn quantitative easing package and will look to cut one of its benchmark interest rates deeper into negative territory. Timo del Carpio, economist at RBC Capital Markets, said the account shows a council “primed and ready for action”. He added: “Despite the delay between the meeting and the publication of its account, we consider the messages here are still wholly relevant to the contemporaneous policy debate”.

19th Nov 2015 Back to top
  • Are women in banking getting a raw deal on pay and promotions?

    BBA Chief Operating Officer and member of the 30% Club, Henrietta Royle looks at new statistics on the gender pay gap and what progress is being made on diversity and inclusion in the banking sector.

  • 2+2=5 or why diversity and inclusion in banking is not a zero sum game

    Paul Chisnall, BBA Executive Director of Financial Policy and Operations, writes about what banks are doing to support diversity and inclusion.

  • BBA Brief – 19 November 2015

    Banking sector recognises achievements and challenges on diversity and inclusion

    The BBA released its first report on diversity highlighting the current successes and the challenges that remain (FT, £, p4). Anthony Browne, Chief Executive of the BBA, said: “Our ‘Diversity and inclusion in banking’ report shows that progress on diversity can, and is, being made on a voluntary basis in the banking sector. And by voluntary, you should not read half-hearted effort – the report’s findings show that the days of the old boys club in banking are numbered.” Commenting on the report, Minister for “Women and Equalities, Nicky Morgan, said: “I’m pleased to see the banking sector has followed the recommendations in Lord Davies’ report and increased female representation at board level to 31 per cent. As a country we cannot afford to waste the talents of a single person, let alone half our population, and that is why women everywhere should be given the opportunity to fulfil their potential. We must continue to increase women’s representation in UK boardrooms and secure lasting change for the benefit of women, business and the economy.”

    Read the BBA report “Diversity and Inclusion in Banking” here.

    The World Economic Forum also released a report today showing that the economic gender gap has closed just three per cent in the last decade saying that progress has stalled in the last decade (FT, £, p6). Writing in the FT (£, p13), Chris Giles criticises the statistics used to analyse the gender pay gap and points to the difference in the gap between generations.

    FCA to investigate the asset management industry

    There is wide coverage of the competition review detailed yesterday by the Financial Conduct Authority into fees charged by the asset management industry (Daily Telegraph, B3). The review will look at how costs are controlled and the role of consultants (FT, £, p17). Calling the UK a world leader in asset management, Christopher Woolard, Director of Strategy at the FCA, said “our market study aims to ensure that both retail and institutional investors can get value for money when purchasing these services”.  Several commentators have forecast a cut to industry margins as a result of boosted competition coming from the investigation (FT, £, p23).

    The announcement comes as data from TheCityUK shows that the value of UK assets under management has hit an all-time high of £7.4 trillion (City A.M., p3).

    European Central Bank considers further drop in rates

    The FT (£, p6) covers speculation that the European Central Bank (ECB) may be considering lowering interest rates further, possibly by 10 basis points. The current rate is minus 0.2 per cent, but some cite Germany’s current government debt rate as showing that further monetary easing is already priced in (FT, £, p32). Analysts are questioning the credibility of the ECB as its forecasts continue to miss the “more stagnant reality of the data” (FT, £, p34). Lowering the rate again will further weaken the Euro and possibly boost European trade. Mr Valli, Chief Eurozone Economist for UniCredit said: “when you are in a low global growth environment, the support coming from the currency can be very important”.

  • Banking sector recognises achievements and challenges on diversity and inclusion

    A new BBA report ‘Diversity and inclusion in banking’ highlights current successes and the challenges that remain, including the need to define the ‘carrot and stick’ for the diversity agenda.

  • Diversity and Inclusion in Banking

    As part of its new Strategic Report for UK companies, introduced in time for 2013 year-end reporting, the Department for Business, Innovation and Skills (BIS) put in place requirements for companies to report on the gender breakdown of their employees. This requires, as a minimum, the disclosure of gender ratios relating to main boards, senior managers and total employees. The BBA supported the disclosures as they provided a natural complement to initiatives such as the Davies Review and the 30% Club, both of which have high levels of support from within the banking industry.

18th Nov 2015 Back to top
  • BBA Brief – 18 November 2015

    PRA Chief Executive appears in front of Treasury Select Committee

    Andrew Bailey, Chief Executive of the Prudential Regulation Authority, told MPs on the Treasury Select Committee yesterday that the gap between challenger banks and their larger counterparts may be too big to bridge (Daily Telegraph, B1). Mr Bailey highlighted the wide range of balance sheets across the industry. He also urged banks to avoid using the press to lobby against new rules such as ring-fencing (Daily Mail, p69, paper only).

    HBOS report to criticise lax regulation

    The much-delayed report into HBOS will criticise the Financial Services Authority for its role in the years running up to its eventual failure in 2008, according to the Times (£, p44)‎. The report, jointly published the Bank of England’s Prudential Regulation Authority and the Financial Conduct Authority – the two successors to the FSA – will be published tomorrow after lengthy legal wrangling. The FSA’s decision not to pursue senior figures in the HBOS boardroom – aside from former Director Peter Cummings – is expected to be a major area of the report’s focus. The Daily Mail (p67) speculates that the advisers and investment banks which were paid large fees by HBOS could also be heavily criticised.

    Chancellor warns of cyber-attack risks

    In a speech at GCHQ yesterday, the Chancellor warned that ISIS is attempting to develop the capability to launch cyber-attacks against critical infrastructure (FT, £, p3). He outlined plans to increase funding on cyber security to £1.9 billion by 2020 and also to open a National Cyber Centre and Institute for Coding. The Independent (p10) highlights that the number of cyber threats dealt with by GCHQ every month has doubled in the space of a year. Mr Osborne said: “If the lights go out, the banks stop working, the hospitals stop functioning or government itself can no longer operate, the impact on society could be catastrophic. So government has a responsibility towards these sectors, and the companies in those sectors have a responsibility to ensure their own resilience.”

17th Nov 2015 Back to top
  • 115th Brussels for Breakfast

    Hosted by the BBA and organised by the CSFI – with Graham Bishop and Raoul Ruparel of Open Europe. Topics included: Cameron speech on Brexit; Completing EMU and deepening the single market; TLAC; DGS; ECOFIN Conclusions on CMU (equivalence and securitisation); MiFID II.

  • BBA Brief – 17 November 2015

    Treasury Select Committee Chair reiterates ring-fence reforms

    There is widespread coverage of Treasury Select Committee Chairman, Andrew Tyrie’s speech last night at City law firm Allen & Overy. He called on regulators to “not give in to special pleading from banks in implementing the reforms introduced as a result of the financial crisis” according to the FT (£, p6). Tyrie endorsed ring-fencing reforms and backed the “electrification” provision within the Banking Reform Act, which allows for full separation of a particular bank, if necessary.

    He also said: “It has become clear that you can’t separate the reforms required to ensure that banks are resilient and resolvable from the reforms required to improve standards.” He suggested Banks should be forcibly broken up if they try to game the “ring-fencing” rules.

    Fellow Treasury Select Committee member, Wes Streeting, Labour MP for Ilford North responded to the speech in City AM (p1), saying “some of the lessons that were drawn from the banking crisis are no longer taken with the seriousness that they deserve. We’ve got to strike the balance between unhealthy public debate that simply amounts to banker bashing with the understandable concerns that the public still have about the sustainability of the banking sector.”

    Research arms prepare for MiFID deadline 

    According to the FT (£, p19), banks are working behind closed doors to meet a deadline for their research divisions to become compliant with MiFID 2. The new rules — expected to come into force in 2018 after the European Commission proposed a year-long delay — will change historic pricing for trading and research in the name of transparency. The paper reports that clients who want research will have to ask for it and pay for it under the new system, which industry sources anticipate will put downward pressure on demand.

    The final draft of the rules could ban banks from subsidising lossmaking research divisions, which means that institutions are now focused on analysing how their clients use and value research. “While a delay would give everybody more time to iron out details, it’s unlikely to affect broader strategic thinking among research providers or consumers,” says Alan MacDonald Nomura’s Head of International Equity Research. A Research Manager at a large US bank told the paper, “We’ve suffered because of the inherent pricing model. Clients have tended to arbitrage it. We’ll probably get a better deal now.”

    Government to double spending on cyber technology

    According to the Independent (p11), Chancellor George Osborne will announce today that £2bn will be invested by the Government to create the country’s first “cyber force” with the express purpose of combating cyber threats. The new National Cyber Centre will be based at GCHQ and is expected to create hundreds of new jobs dedicated to tackling cyber-attacks against the UK.

    Whilst the majority of work will be directed against state sponsored attacks, the effort will also address the threat of cyber terrorism. He is expected to say “When we talk about tackling Isis that means tackling their cyber threat as well as guns, bombs and knives.” Speaking at the Lord Mayor’s annual banquet last night, Prime Minister David Cameron added that “economic security and national security go hand in hand” (City AM p4).

  • 10 key steps to implement IFRS 9

    In January 2018, banks will have to change the process that currently calculates their credit impairments. While 2018 may seem quite a long way off, there is a lot of work to be done in order to meet the requirements on time.

16th Nov 2015 Back to top
  • BBA Brief – 16 November 2016

    Tyrie warns Carney over bond market liquidity risk

    Andrew Tyrie, Chairman of the Treasury Select Committee, will today write to Bank of England Governor, Mark Carney, to set out his concerns that a decline in bond market liquidity will pose a new threat to financial stability (City AM, p5). In particular, Mr Tyrie focuses on risk to the gilt-edged bond market.

    In an open letter, Mr Tyrie will ask Dr Carney for an explanation of how the Bank of England intends to avoid “a vicious cycle of declining liquidity and financial distress among bond traders”. He will also set out some of the perceived risks including onerous regulation of the banking sector, which has “reduced banks’ capacity to act as market-makers” and “absorb fluctuations in supply and demand” (Telegraph B3).

    The UK is open for business, but will it win the global race?

    Writing in the Telegraph (B2) today Anthony Browne, CEO of the BBA, explains that the UK is at a tipping point in its future as a global banking sector and that the Government needs to act to establish a “clear vision for the role of international banking within the UK economy that is underpinned by joined-up policymaking…to ensure that industry, regulators and government can work together to ensure that damaging uncertainty and unintended consequences are avoided”.

    His comments come after the BBA published its ”Winning the Global Race” report on Friday, outlining key threats to the UK as a centre for wholesale banking. The report found a 12 per cent reduction in assets in the UK banking sector since 2011, compared with rises in the US (+12%), Hong Kong (+34%) and Singapore (+24%). Mr Browne identifies the threats facing the sector, such as “bank-specific taxation, extraterritorial regulation and uncertainty over future access to the European single market”, and argues that failure to address these now “will mean that the red carpet will be increasingly threadbare in the years to come”.

    Economic concern affects market sentiment in Northern Europe

    There is widespread coverage of the Deloitte report published today which analysed the views of 1300 Chief Financial Officers (CFOs) across 15 European Countries. The report finds that confidence and risk appetite in European businesses has fallen over the past six months, reflecting concerns over global economic, market and currency weaknesses (FT, £, p6). Sentiment has fallen most in the northern European countries, including the UK, Germany, France and the Netherlands, but risen in the Southern countries.

    Ian Stewart, Chief Economist at Deloitte, said: “concerns about global growth have had a marked effect on sentiment in northern Europe, but we are seeing a rebalancing of prospects within Europe from north to south”. Almost 30% of UK Chief Financial Officers feel less optimistic about the financial prospects of their business than three months ago, but remain among the most positive in terms of risk appetite, hiring intentions and revenue growth when compared to European colleagues (City AM, p8).

13th Nov 2015 Back to top
  • Putting resolution on a firm footing

    Adam Cull, Senior Director, Financial Policy and Operations, blogs about the Bank of England’s supervisory statement on contractual stays in financial contracts governed by third country law

  • Talking about money isn’t vulgar, it’s smart

    BBA Policy Advisor Ariane Poulain discusses why it is time that we break one of Britain’s last taboos – talking about money.

  • BBA Brief – 13 November 2015

    BBA launches report on UK competitiveness in wholesale banking

    There is widespread coverage of the BBA’s “Winning the Global Race” report on the international competitiveness of the UK as a wholesale banking centre, which was led by ex FSA boss, Sir Hector Sants, now Vice Chair of Oliver Wyman. City AM (p3) quotes BBA CEO Anthony Browne saying “We have now reached a watershed moment in Britain’s competitiveness as an international banking centre. The balance of push and pull factors, including tax and capital treatment, unilateral and extraterritorial regulation and overall uncertainty, are weighing heavily in boardrooms across the industry.” You can also listen to Anthony’s interview in the business section of BBC Radio 4’s Today programme here.

    The Daily Mail (p77) explains that the report cites ‘worrying trends’ including an eight per cent drop in employment in the banking sector since 2011, while UK banking assets have fallen 12 per cent despite rising in Hong Kong and Singapore. The FT (£, p4) focuses on the report’s recommendations to increase competitiveness, including calls for the creation of a new independent body responsible for penalty and redress decision making, and a multi-bank regulatory reporting utility to help meet different demands. The Telegraph (B1) quotes the report saying “uncertainty arising from the rapidly changing tax regime and EU referendum are inhibiting business planning and discouraging investment”.

    Bank of England’s Chief Economist comments on regulation and interest rates

    The Bank of England’s Chief Economist, Andy Haldane, says regulators and bankers still have a long way to go before the financial system is fully reformed. Mr Haldane told Radio 5 Live Wake up to Money “There has been a vast raft of regulatory initiatives over the course of the past few years, which is a reflection of just how vast the failings were during the course of the crisis. We have seen changes of culture, people have learned their lessons to some degree. Do we think as regulators, as bankers, that the system is now as good as it can be? I think that would be extraordinary, actually, if after all this change we thought we’d landed in a perfect spot.”

    Separately the BBC also reports that in a speech to the TUC last night, Mr Haldane warned that the UK’s “economic aircraft appears to be losing speed on the runway”. Mr Haldane indicated that the next rate move could equally be a cut rather than a rise and cautioned that a rate rise would “increase unnecessarily the chances of the economy falling below critical velocity”.

    European Banking Authority updates on use of allowances under remuneration rules

    There is widespread coverage of yesterday’s publication by the European Banking Authority (EBA) of a follow-up report on the use of role-based allowances in remuneration packages. The report found attempts to circumvent the EU ‘bonus cap’, which limits variable pay to 100% of fixed pay or 200% with shareholder approval, by passing off extra awards and shares as fixed pay (Times, £, p50). The EBA and the Prudential Regulation Authority reached an agreement that such lump-sum allowances were bonuses and so should count towards the EU cap but that fixed, role-based allowances not related to risk-trading can still be paid

    The FT (£, p4) reports a BBA spokesperson as saying “The British banking industry has made great strides in recent years to reform the way in which highly paid staff are remunerated. This has included deferring bonuses, paying more in shares and being able to claw back bonuses if it subsequently emerges that they were not deserved…any move which increases fixed costs and reduces the ability to use these tools seems counterintuitive”.

  • Winning the Global Race

    The competitiveness of the UK as a centre for international banking

    In late 2014, the BBA began discussing the UK’s competitiveness as an international banking centre with its members and with stakeholders within government and regulatory bodies. It became clear that there was a widespread interest in developing a strategy to safeguard the position of the UK as a leading international banking centre, hosting foreign banks and UK-headquartered wholesale banks.

  • BBA warns of threat to UK competitiveness

    A new BBA report “Winning the Global Race” today outlines key threats to the competitiveness of the UK as a centre for wholesale banking. Produced in conjunction with consultancy Oliver Wyman, the research shows that urgent action is needed if the UK is to remain an attractive location for foreign banks and provide a competitive business environment for UK wholesale banks to challenge overseas.

12th Nov 2015 Back to top
  • BBA Brief – 12 November 2015

    Chancellor sets out fintech vision at Bank of England Open Forum

    There is widespread coverage of the Bank of England’s Open Forum, which took place yesterday. The Daily Mail (p10) leads with the Chancellor’s comments that rogue bankers should be treated like shoplifters and thrown into jail. Bank of England Governor, Mark Carney, also vowed that the age of “heads-I-win, tails-you-lose capitalism” was coming to an end, promising to root out the “bad apples” still working in the financial services industry. Tracey McDermott, acting Chief Executive of the FCA added: “I am not going soft on the banks… if we take the stick away the carrot won’t be useful.” (Guardian, p34)

    The Chancellor also outlined his plan to ensure that the UK leads the world in fintech (The Times, £, p54). He told the audience at the Guildhall that: “I want the UK to be the global centre of fintech. We will go out of our way to do that. The race is on but we are determined to win it.”

    New European rules on capital requirements and deposit insurance unveiled

    The European Central Bank has outlined a new proposal to harmonise banking rules across the Eurozone’s 19 member states (FT, £, p8). Ignazio Angeloni, a member of the ECB’s supervisory board, unveiled the proposals yesterday and stated that a lack of integration was “affecting banks’ ability to compete across Europe.” Aligning capital requirements across the single currency area will be a major focus of the initiative, with the intention of boosting cross-border lending.

    Meanwhile, Brussels is also planning to introduce a new Eurozone-wide deposit insurance system over the next decade (FT, £, p8). The article reports that the proposed European Deposit Insurance Scheme would initially serve as a back-up for national guarantee funds before replacing them by 2024. Germany has previously lobbied against the plans due to concerns over their impact on its own fully-funded national deposit guarantee scheme.

    Indian PM begins visit to UK

    The Indian Prime Minster, Narendra Modi, will today begin a three-day visit to the UK (BBC News). Trade deals of up to £10 billion are expected to be announced during the trip, which comes shortly after a recent visit by the Chinese President. Mr Modi is expected to have lunch with the Queen, deliver an address to Parliament and hold a rally at a packed Wembley Stadium. The FT (£, p2) highlights that India accounts for only £2.2 billion of British exports, lagging far below countries such as Belgium, the Netherlands and Switzerland.

11th Nov 2015 Back to top
  • Michael Cole-Fontayn: on culture and conduct in financial services

    Michael Cole-Fontayn, EMEA Chairman at BNY Mellon, spoke last month at the BBA’s Annual International Banking Conference on why culture is very important, and why the banking industry needs to get it right

  • BBA Brief – 11 November 2015

    PM to drop benefits pledge in latest EU renegotiations

    Most papers cover Prime Minister David Cameron’s EU speech delivered yesterday. The FT (£, p1) reports the him as saying he is “open to different ways of dealing with the issue” of controlling migration, which was a key Conservative manifesto pledge in May. The change came as David Cameron formally launched his European renegotiation after publishing a letter to Donald Tusk, the President of the European Council, in which he outlined Britain’s demands. The Times (£, p18) reports Margaritis Schinas, a spokesman for the European Commission, as saying: “We see a number of elements that appear to be feasible, like finding ways to increase the roles of national parliaments. Some issues which are difficult…and things that are highly problematic as they touch upon the fundamental freedoms of our internal market.“

    Bank of England drops hints at fresh lending curbs

    The Bank of England’s Deputy Governor, Sir Jon Cunliffe, warned in a speech in Geneva last night that the Bank was prepared to act swiftly to limit excessive lending. Sir Jon is reported in the FT (£, p4) as saying “I think we will need to consider whether and how risks are building in the financial system and how they should be addressed”. Expectations are rising that the Bank will either seek to make lending generally more expensive for banks or address specific risks such as rapidly rising lending in unsecured and buy-to-let lending. The Deputy Governor also warned that falling house prices and higher rates “could cause a substantial number of buy-to-let landlords to seek to exit the market, put material downward pressure on house prices, [and] amplify an adverse shock to the housing market”.

    Brussels considers delay to implementation of financial markets regulation 

    European policy-makers are considering delaying by up to a year the second Markets in Financial Instruments Directive (MiFID II), which governs everything from derivatives trading, transparency in bond pricing, and transaction reporting. MiFID II is one of the EU’s most ambitious and complex pieces of legislation, and there are concerns the current timeframe will not allow industry to meet the current implementation deadline for 3rd January 2017. As CityAM (p2) reports, Steven Maijoor, Chairman of the European Securities Market Authority told MEPs on Tuesday that “the timing for stakeholders and regulators alike to implement the rules and build the necessary IT systems is extremely tight. There are areas where the calendar is already unfeasible.”

10th Nov 2015 Back to top
  • STS securitisation – a way ahead

    BBA Executive Director for Prudential Capital and Risk Simon Hills was in Amsterdam this week, meeting banking colleagues to discuss Europe’s latest plans for simple, transparent, standardised securitisations (STS). Read his views on the proposals here.

  • Individual Accountability Regime – what constitutes “reasonable steps”?

    In the latest blog from governance risk and compliance specialists Hitec, Account Manager Debbie Roberts explains what the Individual Accountability Regime really means for your organisation.

  • BBA Brief – 10 November 2015

    Banks told to raise over one trillion in convertible debt in an attempt to end “too big to fail”

    There is widespread coverage of the Financial Stability Board’s final proposals for Total Loss Absorbing Capital (TLAC). According to the FT (£, p17) TLAC will put the onus on creditors rather than tax-payers by requiring banks to raise significant levels of debt which can be converted to equity when a bank fails. The FSB will give its plan to the G20 this month which contains recommendations for TLAC to be set at 16 per cent by 2019, rising to 18 per cent by 2022. Commenting on the proposals, Mark Carney, Chair of the FSB and also Governor of the Bank of England, said “these proposals will help change the system so that individual banks as well as their investors and creditors bear the costs of their own actions”.

    The Telegraph (B1) says that the requirements will be felt most by banks in emerging markets like China if their regulators abide by the new proposals.

    Prime Minister sets out his EU reform agenda

    The Prime Minister David Cameron set out his EU reform agenda this morning in a speech at Chatham House (BBC). The speech comes ahead of a letter which will be sent to Donald Tusk, European Council President. The Prime Minister said that EU reform is “not an impossible task” and laid out four objectives that lie at the heart of the UK’s renegotiations: protecting the single market, boosting competiveness, exempting Britain from “ever closer union” and restricting EU migrants access to in-work benefits.

    Several papers cover the Prime Minister’s speech at the CBI’s annual conference yesterday during which he was interrupted by two protestors connected to the Vote Leave campaign (FT, £, p3). Writing in the Telegraph, Chuka Umunna accuses Brexit campaigners of “behaving like gangsters, trying to close down the debate with behaviour that has no place in public life” (Telegraph, online only).

    Worries about cyber security increase in wake of GCHQ warnings

    The FT (£, p2) covers warnings from GCHQ director, Robert Hannigan, that the market for cyber security may be failing to address the challenges facing western countries. The paper reports that Mr Hannigan will say “it is time to take a hard look at whether the international market for cyber security is working sufficiently well”. The Daily Mail (p12) looks at the increase in attacks on targets with national security importance which has doubled since last month.

    The warnings come as Apple CEO Tim Cook has weighed in on the debate over the level of access which security agencies should be granted saying “any back door is a back door to everyone” (Telegraph, p1).

9th Nov 2015 Back to top
  • BBA Brief – 9 November 2015

    Further speculation over EU referendum date

    Prime Minister David Cameron could hold the referendum on Britain’s membership of the EU in June 2016, if other leaders agree to his reform package at a summit next month, reports the Times (£, p1). Others still believe that September 2016 is the more likely date. In a speech to be delivered tomorrow, the Prime Minister will describe the choice to leave or remain in the Union as “the biggest we will make in our lifetimes”, and will present the decision on Britain’s membership as “not just a matter of jobs and trade but of the safety and security of our nation”.

    The FT (£, p2) adds that Mr Cameron will argue that Britain can survive outside the EU because “it is a great country” and the decision will be a matter for voters, not politicians or lobby groups. The Prime Minister will today address the CBI’s annual conference. BBC News reports him saying that the issue is not whether the UK can survive outside the EU, but whether it would be more successful.

    Chancellor to confirm further spending cuts

    BBC News reports that four central government departments – including the Treasury – have agreed to cut their spending by an average of 30% over the next four years. The savings will be made by cutting day-to-day spending and closing low value programmes. The Chancellor will deliver his Comprehensive Spending Review on 25 November. BBC News says the Chancellor will confirm the news in a speech in London later today. He will also warn that if the Government does not control spending there is a risk of a loss of confidence in the economy.

    Mixed picture for the number of jobs in financial services

    The Times (£, p43) says that the Treasury faces losing “hundreds of millions of pounds” in revenue because several of the City’s largest employers have announced redundancies. CityAM (p5) quotes BBA figures, which revealed that over 2014 London lost 4,854 banking jobs, a 2.8% year-on-year fall. The paper also cites figures from recruitment consultancy Morgan McKinley, which found that the number of new vacancies in financial services in London rose by 7% to 9,480 in October, compared to the month before. The article acknowledges that the financial services industry is increasingly looking for staff beyond the capital, and cites figures from the BBA which show that 2,450 new positions in the banking sector were created outside of the capital in 2014. Our report, Banking on British Jobswhich highlights the growth in regional banking jobs against a decline overall in the sector, is available on our website.

  • Key takeaways from the BoE update on stress testing

    Ben O’Brien, Risk Practice Director at Jaywing, writes about the annual cyclical stress test by the Bank of England.

6th Nov 2015 Back to top
  • Brave new world: how technology is changing digital banking

    Apps that remember where you buy your groceries, high-tech bank branches and a digital revolution that bears the hallmarks of historic revolutions that have gone by – we heard it all at the BBA’s Digital Banking Conference, writes Emily Hoquee.

  • BBA Brief – 6 November 2015

    Treasury Select Committee Chairman urges bank tax review

    Andrew Tyrie, Chairman of the Treasury Select Committee has written to the Competition and Markets Authority to call for a review of the new Corporation Tax surcharge on bank profits, the FT (£, online only) reports. The Chancellor announced the 8% surcharge on banks’ profits earlier this year. In a letter to the CMA, Mr Tyrie called on the watchdog to report findings of a review on the impact of the surcharge “well ahead” of next year’s Budget in March, the paper writes. He is quoted by the FT saying that it is crucial the surcharge did not get in the way of government efforts to increase competition. Paul Lynam, Chief Executive of Secure Trust Bank and Chair of the BBA’s challenger bank panel, said smaller banks “punch significantly above their weight” in small and medium business lending, the paper adds.

    Single capital threshold will not form part of European stress tests

    Bloomberg reports that the European Banking Authority announced yesterday that its 2016 stress test will not judge banks against a single capital threshold. Bloomberg says last year banks had to maintain a ratio of capital to risk-weighted assets of 8%, and the ratio was 5.5% in the “adverse scenario” which allowed lenders to run down capital buffers. Fifty-three EU banks will undergo the test. In a statement, the EBA said: “The objective of the EU-wide stress test is to provide supervisors, banks and other market participants with a common analytical framework to consistently compare and assess the resilience of the EU banking system to shocks.”

    “Super Thursday” sees possible rate rise postponed

    The Bank of England yesterday nudged down its UK growth forecast by 0.1 of a percentage point for 2015, 2016 and 2017 and warned that a global slowdown was weighing on the recovery, the Times (£, p43) reports. The Bank also said that inflation is not expected to return to its 2% target until the end of 2017, even with interest rates remaining at their current level until Q2 of 2017. The news caused the pound to slide 1.5 cents against the euro and 1.7 cents against the dollar. This morning Bank of England Deputy Governor Dame Nemat Shafik told BBC Radio 5live’s Wake Up to Moneythat interest rates should not be used “to deal with problems in the housing market,” and, if necessary, the Bank could cut interest rates below the current record low of 0.5% (BBC News).

5th Nov 2015 Back to top
  • BBA Brief – 5 November 2015

    Treasury Select Committee raises concerns with report on competition in retail banking

    The BBC and others cover comments made by members of the Treasury Select Committee during its hearing on the Competition and Markets Authority’s (CMA) review of competition in retail banking. Mark Garnier MP told Alasdair Smith, Chair of the CMA’s retail banking investigation, that the interim report looked “lazy” and that the banks had “pulled the wool over your eyes and you’ve allowed them to”. The Telegraph (B1) picks up the story reporting that MPs pressed the panel hard on the ability of banks to report how much each customer account cost to operate. The paper also reports on MPs dissatisfaction with the CMAs decision to “pass the buck” on investigating the banks ownership of the payments system to the new Payment Systems Regulator.

    Legal Ombudsman reports on Claims Management Company complaints

    The BBC this morning covers the Legal Ombudsman report about its activities in relation to Claims Management Companies (CMC). Since the Legal Ombudsman’s CMC service opened for complaints in January, more than 9,000 have been received, 94 per cent of which were about CMCs dealing with financial product claims. These include mis-sold mortgages, investments and interest rate swaps; but the majority (88 per cent) were about mis-sold Payment Protection Insurance (PPI). Around 40 per cent of the complaints investigated were about CMC costs including unjustified fees, a failure to refund upfront fees, or contractual disputes over fees.

    Interest rate expectations vary across the major western markets

    There is widespread coverage of comments made by US Federal Reserve Chair during a congressional hearing yesterday. The FT (£, p8) reports Ms Yellen as saying “downside risks” to the economy had diminished and calling an interest rate rise in December a “live possibility”.  In contrast, on the European side of the Atlantic the paper discuss investors apparent conviction that the European Central Bank may drive rates further into negative territory and extend quantitative easing (FT, £, p32). The report cites one economist as saying “The ECB clearly has a bias to do more and will very likely do more”.

    CityAM (p14) meanwhile covers what it calls the “Super Thursday hat trick” of statistical releases from the Bank of England including the Monetary Policy Committee’s most recent interest rate decision and minutes from their last meeting. The paper reports that although the Bank is expected to maintain the current rate through the end of the year, more hawkish thinking may become apparent with as many as three members voting for a rate rise.

4th Nov 2015 Back to top
  • Banking beyond borders

    The UK’s future as an international banking centre was top of the agenda at the BBA’s inaugural International Banking Conference, writes BBA Chief Executive Anthony Browne.

  • BBA Brief – 4 November 2015

    New review calls for bonuses to be linked to gender diversity progress

    A government-commissioned review led by Virgin Money Chief Executive Jayne-Anne Gadhia has recommend that bonuses for City executives should be linked to progress on appointing women to senior roles, BBC News reports. Ms Gadhia said: “It should be a wake-up call to everyone in financial services that fewer women progress to senior levels than in any other industry in the UK.” The interim recommendations will be presented today at a summit hosted by Harriett Baldwin MP, Economic Secretary to the Treasury. The full report is scheduled to be published before the 2016 Budget.

    FCA raises concerns over credit card market

    An interim report from the Financial Conduct Authority has found that competition in the credit card market is “working well” for customers but has called on lenders to provide more support for borrowers struggling to make repayments (FT, £, p4). Mike O’Connor, Chief Executive of StepChange debt charity, said: “Action is required on how credit card companies share data and carry out affordability checks to ensure people do not take on credit that looks cheap but will ultimately become unmanageable.” The Sun (£, p1) reports that 5.6 million people are trapped in a credit card debt cycle. The final report is due to be published next spring.

    Credit Suisse warns over future of European investment banks

    Tidjane Thiam, Chief Executive of Credit Suisse, has warned that Europe cannot afford to see its investment banks downsize further without it having an impact on the continent’s economy (FT, £, p18). Speaking at the Financial Times Banking Summit, Mr Thiam said: “European companies need more routes to the market and a strong European banking sector is part of that.” The article notes that US investment banks have gained ground against their European rivals as a result of stagnant growth across the continent and post-crisis regulation.

3rd Nov 2015 Back to top
  • BBA Brief – 3 November 2015

    Chancellor to outline his vision for a reformed EU

    According to the FT (£, p2), Chancellor George Osborne is to set out the UK’s demands for EU treaty change to protect its economy, taxpayers and the City of London. In a speech in Berlin today, Mr Osborne will outline his vision for a new EU settlement that enshrines the rights of non-Eurozone countries in the 28-member club. The paper says that in exchange for these protections, the Chancellor will agree not to stand in the way if the Eurozone steps towards closer integration.The “integrity of the European single market”, provisions to ensure that that it is not distorted by Eurozone countries rigging the rules in their favour and “the recognition that the EU has more than one currency and we should not discriminate against any business on the basis of the currency [area] in which they reside”, are all expected to be on Mr Osborne’s wish list.

    Surprise boost for manufacturing

    The pound rose half a cent against the euro and the dollar yesterday after Markit’s survey of the manufacturing sector revealed that there was a rise in new orders last monththe Telegraph (B1) reports. The paper says the manufacturing purchasing managers’ index (PMI) jumped to 55.5 in October, a 3.7 point rise from last month. Markit has described the rise as “one of the steepest registered” since the survey began in 1991. The Guardian (p18) adds that yesterday’s PMI report showed export and domestic orders picked up across all parts of the industry, and there was improved demand from the Middle East, East Asia and the US. Rob Dobson, a senior economist at Markit, is quoted saying: “The start of the final quarter saw UK manufacturing spring back into life and record its best month of factory output growth since June 2014. The revival provides a tentative suggestion that the manufacturers are pulling out of their recent funk, having been dogged by recession since the start of the year, and may help boost economic growth in the fourth quarter.”

    Financial Transaction Tax “a bad idea”

    Reuters reports that Stefan Ingves, Sweden’s Central Bank Governor and Chairman of the Basel Committee on Banking Supervision, has told a conference in Madrid that a Financial Transactions Tax is “a bad idea” and it will be difficult to introduce variations in the tax. He also said that the Basel Committee’s review of sovereign risk issues will take several years.

2nd Nov 2015 Back to top
  • Chief Executive’s newsletter – November 2015

    The future of London’s role as a global financial centre was put in the spotlight last month. Our first International Banking Conference addressed many of the serious questions about the future of the City, not least touching on the theme of how we stay ahead in the global race.

  • BBA Brief – 2 November 2015

    Britain best place in the EU to start business

    There is widespread coverage of the Legatum Institute’s annual Prosperity Index, which is released today (Telegraph, B3). The Index names the UK as the best place in the European Union in which to start a business and places it as the 15th most prosperous country of those investigated. The report uses a combination of official statistics and public polling to rank 142 countries across eight different categories, including the economy, entrepreneurship and opportunity, education and health. Britain’s successful climb to its highest level of economic success ever recorded was largely down to its performance since the financial crisis, the ease of starting a business and the number of people in full-time employment. Click here to see our report entitled “Banking on British Jobs”.

    British and US Governments plan cyber security test

    The Bank of England and US counterparts are arranging a desktop exercise, known as Operation Resilient Shield, to talk through how regulators, government agencies and banks on both sides of the Atlantic would respond in the event of a cyber-attack (City AM, p18 – print only). The joint operation, coordinated by the Governments’ Computer Emergency Response Team (CERT), will simulate a major cyber-attack on the financial sector in order to test the lines of communication between the US and the UK (Times, £, p50).

    Mark Carney, Governor of the Bank of England, has highlighted cyber-attacks as a significant risk to the financial sector, calling for cyber defences to be “regularly assessed” to cope with the “adaptive nature of the threat” (Telegraph, B1). The joint statement from CERT on behalf of Bank of England, BBA and HMT is as follows: “As announced by the Prime Minister and President Obama in January, the UK and US governments plan to hold a joint exercise to test cyber response arrangements and information sharing systems. While this exercise involves leading global financial institutions, it is not intended to test those institutions’ own responses. The exercise is part of on-going engagement between the UK and US on this issue and further information will be released in due course.”

    ECB finds €14 billion shortfall in Greek banks

    This week Greece’s four biggest banks are set to finalise their recapitalisation plans to raise €14.4 billion (FT, £, p10). After months of stress testing, the European Central Bank has calculated that the four biggest lenders would need an additional €14.4 billion of capital under the ‘adverse’ scenario, where banks must be able to withstand a worsening of economic and financial conditions. The capital shortfall falls to €4.4 billion under the ‘baseline’ scenario, which assumes the economy will return to robust growth by 2017. The banks have until the end of the week to finalise the plans, allowing for the Greek government to put in place plans to recapitalise the sector by the end of the year.

30th Oct 2015 Back to top
  • BBA Brief – 30 October 2015

    The Chancellor seeks safety ‘brake’ on EU laws to protect City

    The FT (£, p1, 2) reports that several of the Chancellor’s desired EU reforms have come to light. An “emergency brake” for non-euro countries is reported as being at the top of the list. Citing European ministers and officials, the paper says that a change to the so-called “Ioannina compromise” is Mr Osborne’s biggest priority as he seeks to protect the City of London. The proposed reforms would give countries outside of the Eurozone the power to delay a vote that threatened the single market, forcing additional consultations on the law at the level of EU leaders. Other measures reported to be on the Chancellor’s wish list include non-discrimination against financial groups on the ground of where they are located, a demand to resolve the battle with the European Central Bank over clearing houses in London and the recognition of the EU as a multi-currency union.

    The news comes on the back of an announcement by rating agency Standard & Poor’s yesterday, which warned that a Brexit could see Britain’s credit rating cut by as much as two notches (Daily Telegraph, B1). Meanwhile, a US trade official has cautioned that the US would be in no hurry to negotiate a trade deal with the UK, saying that the US was “not particularly in the market for FTAs with individual countries” (CityAM, p14).

    MEPs reach compromise on the EU Bank Structural Reform

    There is widespread coverage of the deal reached between representatives of the two largest political parties in the European Parliament. The FT (£, p.6)  reports that agreement has been found “by Gunnar Hökmark, a Swedish centre-right MEP who is leading parliament’s work on the law, and Jakob von Weizsäcker, a German MEP representing the parliament’s centre-left Socialists and Democrats group”. According to Mr Hökmark, the deal stops short of automatically forcing separation of investment and retail banking, leaving discretion to supervisors to act after scrutinising if any bank is a threat to financial stability.

    Slowdown in US growth figures mask underlying strength

    CityAM (p3) and others report on the slowdown in US growth. Third quarter growth slowed to an annualised 1.5 per cent, down from 3.9 per cent in the second quarter. The slowdown is being blamed on stock reduction as consumer spending remained strong.

    Elsewhere, the US Federal Reserve has given its clearest signal yet that a rate rise is likely before the end of the year (FT, £,  p10). The statement, made after the Fed’s policy meeting on Wednesday, made an instant impact on financial markets and revealed a shift in the Fed’s focus from emerging to the domestic market. The dollar climbed on the news reaching its highest level since August (FT, £, p31).