17th May 2017

BBA Brief – 17 May 2017

Relocation of Euro-clearing would damage European Economy

Relocation of the Euro-clearing market would destabilise the European economy and wider global economic system (City AM, p1).

Commenting on the measures proposed by the European Commission, City of London’s Policy Chief Catherine McGuinness said, “all the evidence points one way: that the mass uprooting and offshoring of part of the industry – of clearing of transactions in one currency – would not only be vastly complicated, but also vastly damaging…if we split off one currency, with euro clearing moving to, say, Paris, all we’ll see is systemic risk going up, liquidity going down, costs hitting the roof” (Reuters, online).

EU-Singapore free trade deal may signal ‘faster, harder’ Brexit

The European Court of Justice has ruled that a free-trade deal between the EU and Singapore will largely be agreed by the European Commission, with dispute resolution mechanism and investment portfolios the only two areas where all member states must agree on final terms (Financial Times, £, p1).

The ruling has been interpreted as a potential model for a post-Brexit deal with the UK. Bloomberg (online) writes that the judgement paves the way for a quicker but harder Brexit, noting that it “makes life easier for Commission President Jean-Claude Juncker and chief Brexit negotiator Michel Barnier, who have made it clear they want to serve the UK with a large divorce bill and harsher terms”.

Latest from the BBA

Henrietta Royle, BBA Chief Operating Officer, blogs on the value of gender diversity in banking, 60 years on from the appointment of the UK’s first female bank branch manager.

BBA Managing Director, Wholesale and Financial Policy, Ronald Kent discusses the potential impact of  attempts to relocate Euro-denominated clearing activity risk with Global Risk Regulator (£, online).

Wednesday 7th June – The BBA NED Club
Our next meeting, exclusively for bank non-executive directors, will host a panel on the role of non executives, followed by a presentation on Culture and Conduct Risk. To reserve your free place click here.

Thursday 15th June Global Trade Review’s UK Trade & Export Finance Conference
Supported by UK Export Finance, EEF, British Exporters Association, the International Chamber of Commerce UK, this event will focus on the key issues in supply chain finance. Click here to register, BBA members receive a 15% discount.

Tuesday 20th June  IFRS 9, Prudential Regulation and Disclosure Forum
This BBA event brings together industry experts on IFRS 9 to discuss outstanding issues,  focussing on IFRS 9 expected credit loss impairment and consider what IFRS 9 means for banks of different sizes. To register, click here.

Latest from our sponsor Jaywing

Wednesday 24th May – Webinar: Fast train through Basel, with final stop IRB. Credit risk modelling experts Jaywing will discuss the prevailing capital headwinds and the challenges facing new banks looking to optimise capital consumption and IRB evaluation priorities. Click here to register for the free webinar.

Stat of the day

32%: percentage of UK high net worth individuals that believe leaving the EU will have a positive long-term impact on the UK (UBS, reported by City AM).

News in brief

Bloomberg News (online) reports that the EU plans to publish a series of policy documents during Brexit negotiations in a bid to enhance transparency and align the priorities of EU 27 member states.

Sky News (online) summarises business leaders’ reaction to Labour’s manifesto commitments on tax and spending priorities.

Speaking to BBC Radio 4’s Today Programme Chancellor Philip Hammond highlighted the need to increase productivity, and criticised Labour’s proposed economic strategy.

The Times (£, p20) reports ONS data showing that house prices rose by 4.1% in Q1 2017, the slowest rate since October 2013.

The CBI has called for the creation of a dedicated Government Brexit Taskforce to help support negotiations with the EU (BBC News, online).

Austrian Finance Minister Hans Joerg Schelling has said that the EU could introduce a new financial transaction tax in its next budget (Reuters, online).

Diary  

UK monthly unemployment figures published.

ESMA holds open hearing on reform of Credit Rating Agency regulations.

Liberal Democrats expected to publish manifesto for UK general election.

European Commission President Jean-Claude Juncker and European Council President Donald Tusk present a report on the EU’s Brexit summit at the European Parliament.

What the commentators say

Writing in the Evening Standard (p41) Simon Read highlights that many customers who pay fees for arranged and unauthorised overdrafts are often in financially vulnerable circumstances and welcomes initiatives to make the cost of providing banking services more transparent.

David Smith argues that policy-makers must pay greater attention to reducing the growing gap between inflation and wages to avoid a rapid fall in consumer spending and growth (The Times, £, p41).

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