18th November 2015

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.”

Today’s diary

House of Lords: EU Referendum Bill Report Stage

Treasury Select Committee: Economic and Financial Costs and Benefits of the UK’s EU membership

House of Commons: EU Scrutiny Committee hearing on the UK Government renegotiation of EU membership

Westminster Hall Debate: “Women on Low Pay”

ONS: annual survey of hours and earnings in the UK

Cyber Security Summit 2015

ECB: Governing Council meeting in Frankfurt

US Federal Reserve minutes

Latest from the BBA

Watch a vlog from Graham Bishop on the single market and European regulation after the 115th Brussels for Breakfast. 

In the next few weeks, the BBA eLearning Academy will be releasing an eLearning module on Vulnerable Customers. A preview of some of the content is available here. For a full demo of this and other eLearning courses on Conduct Rules, SMR and Risk, please contact philip.allen@bba.org.uk

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Stat of the Day

£286,000 – the average UK cost of a property after a 6.1 per cent rise in the space of a year (Source: Office for National Statistics).

In brief

Six out of 10 over-50s now say they cannot live without online banking, according to new research from Saga (Daily Express, p27, paper only).

The Treasury is to conduct an official analysis of the economic case for Britain’s membership of the European Union (FT, £, p1).

Office for National Statistics’ figures show that the average cost of a property jumped 6.1 per cent in the year to September to £286,000 (Times, £, p46).

Operators of the world’s financial plumbing – including leading exchanges and brokers –have completed a wave of realignments and consolidation in recent weeks (FT, £, p17).

British businesses are setting up in Eastern European nations as a way of getting around Financial Conduct Authority rules that require borrowers to prove what they earn ahead of obtaining a mortgage (Daily Mail, p48).

A review by the Financial Conduct Authority could ban financial advisers from taking a commission for recommending peer-to-peer investments (Daily Mail, p47).

The Greek government has reached an agreement with its European bailout negotiators, laying the ground for the release of €2 billion in aid the restructuring of the country’s banks (FT, £, p8).

New global rules on banking generally should not result in higher capital demands for euro zone banks, European Central Bank Executive Board member Sabine Lautenschlager said on Tuesday (Reuters).

The Financial Conduct Authority has today set out the areas it will focus on as it looks into competition in the asset management industry (Daily Telegraph, online only).

What the commentators say

Writing in the FT (£, p11), John Kay looks at the differing perspectives on liquidity from savers, businesses and market participants.

Anthony Hilton (Evening Standard, p42) ‎writes in support of the recent speech on banking reform by Andrew Tyrie, Chairman of the Treasury Select Committee.

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