13th July 2016

BBA Brief – 13 July 2016

Theresa May set to become Prime Minister

David Cameron will stand down as Prime Minister later today, with Theresa May set to replace him (Telegraph, p1). Mr Cameron said: “As I leave today, I hope people will see a stronger country, a thriving economy, and more chances to get on in life.” He will tender his resignation to the Queen after Prime Minister’s Questions. Meanwhile, Labour’s National Executive Committee has ruled that Jeremy Corbyn should automatically be included in the leadership contest (BBC News). Pontypridd MP Owen Smith has announced he will stand in the contest.

Carney lays ground for new round of monetary stimulus

Mark Carney, the Bank of England Governor, has said steps to strengthen bank balance sheets after the financial crisis meant there “won’t be a credit crunch”, but stressed that demand for loans depended on the economy (Telegraph, B5). Mr Carney said: “We have been talking to the banks […] and their orientation is outward facing, their balance sheets are in strong positions, they are in the business of taking on risk […] If they have to, they may adjust their risk profit, but they have a lot of capital and they need to put it to work” (Telegraph, B5). He also told the Treasury Select Committee that it is “important” that he and the Chancellor can have private conversations after being challenged about his discussions on Brexit (BBC News).

Foreign Secretary speaks at BBA Summer Reception

Bloomberg reports that Foreign Secretary Philip Hammond said that he will work to support the financial services industry during discussions following the European Union referendum vote. Speaking at the BBA’s Summer Reception, Mr Hammond acknowledged that “financial services industry is probably the most directly affected” by a Brexit and said “we will do our bit to get you the certainty you crave.” He also added: “I know and understand the importance of passporting.” Nick Robinson also featured Mr Hammond’s speech in a package on the Today programme (skip to 1:37:00).

Latest from the BBA

Nominations are open for ifs University College and BBA 2016 Financial Innovation Awards, which seek to recognise and reward innovation in the finance sector. Click here for more details.

On the 12 September, BBA will be running a one day training workshop on the ‘Introduction to the Role of the MLRO’ for more details click here.

The BBA’s 13th Annual Liquidity Conference will be taking place on 27 September. Visit our website to view the conference programme, confirmed speakers and to book your place.

Latest from our sponsor Jaywing

Jaywing’s Data Management Practice Director, Inderjit Mund, blogs about the role of data management when it comes to regulatory compliance.

Today’s diary

House of Commons Treasury Select Committee: The UK’s future economic relationship with the EU – 1400hrs

Bank of England: Credit Conditions Review Q2

Bank of England: Bank Liabilities Survey Q2 published

CML: Monthly Lending Trends May 2016

Annual Financial Services Cyber Security Summit: in London

Stat of the day

2,256 – the number of days that David Cameron has served as Prime Minister (Source: Telegraph).

In brief

Reuters reports that Lord Hill has said that all bank loans to small businesses would in future be eligible for a reduction in capital charges as he prepares to step down as European Union Financial Services Commissioner.

The FT (£, p15) reports that pay for chief executives of big banks climbed by 7.6 per cent in 2015 — more than 10 times faster than a year earlier.

Money Mail (p42) reports that savers are turning away from cash Isas following the introduction of the personal savings allowance. A BBA spokesman said: “The new personal savings allowance has effectively increased the number of tax-free options for millions of savers. They may now be looking to save in more traditional accounts, rather than in an Isa.”

The FT (£, p6) reports that German Chancellor Angela Merkel has expressed confidence that talks between Rome and Brussels about supporting Italian banks could be “resolved well”.

What the commentators say

Writing in the Telegraph (B2), Ben Marlow highlights how the declining value of mergers and acquisitions presents a challenge for investment bankers.

Patrick Hosking looks at whether the Bank of England’s Monetary Policy Committee should cut interest rates when it meets tomorrow (Times, £, p39).

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