19th June 2017

BBA Brief – 19 June 2017

Brexit negotiations begin today

UK and EU officials will meet today to begin formal talks to agree the terms of the UK’s departure from the EU. BBC News (online) reports that early discussions will include, “the status of expats, the UK’s ‘divorce bill’ and the Northern Ireland border”.

A number of papers report comments made by Chancellor Philip Hammond this weekend on the importance of securing a good deal for businesses as part of the negotiations, including his argument that the final deal should include a lengthy transition period (The Times, £, p1).

The Financial Times, (£, p6) includes a guide to the EU and UK negotiating teams, and The Guardian (p11) sets out a guide to the main treaties to be discussed.

BCBS fails to agree new Basel standards

Talks to agree new capital standards for banks have broken down after EU and US regulators were unable to agree on an ‘output floor’. Politico (£, online) writes that while BCBS Chairman Stefan Ingves and US regulators are said to have been prepared to endorse a 75% limit, however EU regulators were unable to agree a floor above 70%.

Bank of England sets out ring-fencing challenges

The Bank of England has set out further detail on its requirements for implementing ring fencing legislation. Speaking at a BBA event on Friday, James Proudman, Executive Director for UK Deposit Takers Supervision, said: “against the back-drop of other regulatory, accounting and business model changes – not the least of which is Brexit – it is easy to see that the banks in scope of ring-fencing are facing significant restructuring challenges”. The Financial Times (£, online) highlights that that the changes will mean nearly a million retail customers may be given new sort codes.

Latest from the BBA

Andrew White, VP EMEA, Vidyo, Inc. blogs on how video-enabled platforms integrate the trend for digital engagement with the benefits of face-to-face interaction.

Holly Whitehead, Research and Development Manager at International Compliance Training, writes that investing in training for compliance staff after breaches are discovered is too little, too late.

Monday 19 June – BBA Workshop Compliance Monitoring – Thinking like a regulator

This one-day workshop has been designed to help Compliance Officers understand the relationship between  the firm’s risk map and its compliance risk map, consider resource requirements and produce a budget. To register, click here.

Thursday 29 JuneBBA Annual Retail Banking Conference 2017

At this year’s flagship BBA Annual Retail Banking Conference we’ll be exploring the role of technology in all its guises including fintech, open banking and digitisation. To register, click here.

Tuesday 4 July BBA MIFID II Conference

Hear from regulators and industry practitioners on the impact MiFID II will have on your bank, and what you need to do to comply with the rules. To register, click here.

Latest from our sponsor Jaywing

IRB or not to be

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Stat of the day

£3.7 million: value of currency traded each second in the peak trading hour after the EU referendum result (as reported by the Daily Mail).

News in brief

The European Commission is expected to publish proposals requiring banks, accountants and other intermediaries to disclose new client cross-border tax schemes to the authorities The Guardian (p22).

Many companies are failing to prepare for European data protection regulations, due to come into force next year, according to the Financial Times (£, p16), risking fines of up to €20 million.

Frankfurt Main Finance, the German lobby group, has said that euro clearing businesses have already started moving accounts to Frankfurt (City AM, p5).

Sky News (online) reports that FCA Chairman John Griffith-Jones is to step down next April, with HM Treasury expected to look for a replacement this week.

The Times (£, p47) reports that John Penrose MP and Jacob Rees-Mogg have both put themselves forward to succeed Andrew Tyrie as Chairman of the Treasury Select Committee, with other contenders said to include former Education Secretary Nicky Morgan MP and Committee Member Chris Philp MP.

The Bank of England will review banks’ exposure to climate change and environmental risks posed by global warming (Financial Times, £, online).

EU will agree a rules on the order that  losses will be imposed on bank creditors in the event that an institution fails on Friday, in a bid to speed up banks’ accumulation of capital buffers (Reuters, online).

The Wall Street Journal (£, online) reports that President Trump has appointed White House aide Jim Klinger as Chair of FDIC.

Reuters (online) reports that French President Emmanuel Macron won France’s Parliamentary election on Sunday, securing a mandate for pro-business reforms.

Diary

  • UK and EU officials begin Brexit negotiations in Brussels.
  • First day of trading after FTSE UK Index quarterly review changes.
  • Danièle Nouy, Chair of the Single Supervisory Mechanism, speaks on bank resolution at the European Parliament.

What the commentators say

Writing in the Daily Mail (p63), Alex Brummer comments that securing a gradual transition as part of the final Brexit deal is essential for the City, arguing that finance should be at the top of the negotiating agenda.

Commenting on the Bank of England’s plans to unwind its funding schemes next year, Katherine Griffiths anticipates that banks will raise rates offered to savers to attract new deposits (The Times, £, p43).

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