12th January 2017

BBA Brief – 12 January 2017

Impact of Brexit on financial stability; priorities for the post-Brexit settlement

Giving evidence at the Treasury Select Committee yesterday, Bank of England Governor Mark Carney commented that, “Brexit no longer poses the biggest risk to domestic financial stability”, and signalled that that the Bank is, “very likely” to upgrade GDP forecast next month (£, The Daily Telegraph, Business p1). Bloomberg (online only) reports comments in a report published today by TheCityUK underscoring the importance of transitional arrangements following Brexit: “The U.K. and the European Union should conclude a bespoke agreement that delivers mutual market access, transitional arrangements to allow for enough time to implement the new relationship and access to talent.” The report can be read in full here.

Fears over the rising level of household debt

The Times (£, p35) notes a warning from the Bank of England that, “consumer borrowing grew at its fastest pace in 11 years in November”, which it describes as a, “worrying echo” of pre-crisis consumer spending patterns. The article also reports comments from Alex Brazier, the Bank of England’s Executive Director for Financial Stability, raising concerns over “loosening credit conditions by lenders” and suggesting that the Bank may consider intervening, “as it did in the mortgage market in 2014.”

ECB cautions on merger between LSE and Deutsche Boerse

Reuters reports a letter from ECB President Mario Draghi to a member of the European Parliament citing concerns over Brexit and urging caution over the proposed merger between the LSE and Deutsche Boerse: “when a merger leads to a change in ownership of a euro area bank, as could be the case for entities within Deutsche Boerse and LSE Group that are licensed as banks, the ECB has to analyze it carefully from a prudential perspective”. Reuters also notes that the $28 billion mergers faces a number of barriers including regulatory concerns over clearing derivatives contracts and antitrust issues.

Latest from the BBA

Paul Chisnall, the BBA’s Executive Director, Financial Policy & Operations writes on how the industry can tackle the financial stability risks posed by climate change.

Tripti Tapuriah Modi, Senior Consultant at Spitch, blogs on artificial intelligence and voice user interfaces in banking.

Tuesday 17th January –  BBA Breakfast: ‘Senior Managers Regime: What to do When the Regulator Comes Knocking’

Using practical examples and drawing on direct experience both of the regulators’ own enforcement perspectives and of the way in which the investigative process works, this breakfast meeting will offer firms much needed insight and practical guidance on what the new emphasis on personal accountability for senior managers means for you in your day to day dealings with the regulators or on the nature of the liability protections available to you should you find yourself in the regulators’ sights.. To book your place and bring a colleague along for free click here.

Tuesday 24th January – BBA webinar: ‘Customer Experience for Banks: Can we do better & lower costs by using speech technologies?’

Banks are under pressure to minimize operational costs yet at the same time provide a higher level of service to their customers. Can both objectives be achieved, if so how? In this free 1 hour webinar BBA associate member Spitch discusses how Speech Analytics and Voice Biometrics technology can improve customer loyalty and operational efficiency. To register click here.

Latest from our sponsor Jaywing

Jaywing’s Managing Director, Ben O’Brien, blogs about challenges to implementing IFRS 9 ahead of its deadline in January 2018. 

Today’s diary

European Parliament – adoption of draft report on cloud initiative.

European Parliament ECON Committee meeting.

Stat of the day

40,000 –  number of banking apps downloads a day in 2015, a 25% rise on the previous year (BBA).

In brief

Ministers have “privately conceded” that they are likely to lose the Supreme Court case on Brexit (The Guardian, p13).

Belgian finance minister Johan Van Overtveldt is leading a delegation of Belgian fintech experts to build, “a fintech bridge” with London (City AM, p12).

Government plays down suggestions that it may impose annual £1000-per-employee levy for companies who hire EU workers after Brexit (Sky News, online only).

The UK’s trade deficit rose to £4.2 billion in UK November 2016, up from £2.6 billion in October 2016 (The Independent, p40).

Accenture finds that one in three customers would consider using banking or insurance services from Google, Amazon or Facebook (Reuters).

Speaking at the annual Die Welt Economic Summit, Philip Hammond has called for close collaboration between UK and German over the Brexit negotiations (The Independent, online only).

Funding Circle, the peer-to-peer lender, has raised £82 million in equity from global investors (£, The Financial Times, p18).

Data from Collision group suggests that banks could increase their customer base by offering insurance (City AM, online only).

What the commentators say

Simon Nixon predicts that the Eurozone economy will continue to “muddle through” despite the disruption of the Brexit negotiations and local elections in 2017, supported by continued quantitative easing by the ECB. (£,The Times, p39)

Writing in The Daily Telegraph (£, Business, p2) Miles Celic, Chief Executive of TheCityUK, emphasises the importance of the financial services industry as an asset for the whole EU, not just the UK, emphasizing the need to “build on and go beyond existing equivalence regimes” following Brexit.

Please register or login to add this to your interests.