20th April 2017

BBA Brief – 20 April 2017

EU “administrative chill”

An internal memo sent by senior European Commission officials to all EU staff highlights a growing “administrative chill” ahead of Brexit proceedings (Financial Times, £, online). Staff were told to prepare for UK agencies to be disconnected from “sensitive databases” and reminded staff that legally, contracts can only be awarded to parties established in the EU. The memo follows a statement from Margaritis Schinas, spokesperson for the European Commission, who said the UK will have “no say” in the relocation of the European Banking Authority (Bloomberg, online).

Fintech growth continues

UK fintech startups received £177 million in investment during the first three months of 2017, confirming the UK as the European Fintech capital (CityAM, p11). The Telegraph reports (B1, £, online), however, that the UK faces growing competition from China due to their looser regulation standards and the $7.1billion rise in funding for Asian fintech companies last year. Similarly,  Level39, a fintech accelerator, urges banks to invest in startups that offer the technology they need or else they may face a ‘cliff-edge’ (The Times, p50).

General election campaigns gather pace

MPs backed Theresa May’s proposal for a general election on June 8 by a 509 majority. The Daily Mail reports that the conservative manifesto will commit the party to ending EU free movement and leaving the single market and European Court of Justice (p1, online). Jeremy Corbyn is expected to announce a manifesto that is “heavy” on big businesses that act “in an irresponsible way” (The Times, online).

Latest from the BBA

Robert Driver, BBA Policy Director of Capital Markets, blogs on transaction reporting in the new MiFIR reporting framework, especially the short selling requirement.

Matthew Herbert, BBA Director of Strategy and Digital, blogs on what makes good Fintech, and how industry and regulators can measure it.

Sophie Westmoreland, BearingPoint Marketing Manager, blogs on the potential for adopting an industry-wide reporting utility in the UK.

Wednesday 26th April – Webinar: Customers in Vulnerable situations
In this webinar the BBA and The Money Advice Trust draw on new evidence and practical guidance to help regulated firms tackle the most difficult issues staff are encountering on vulnerability, and review how firms are meeting their regulatory and legal requirements on vulnerability. To register click here.

Thursday 27th April  Webinar: The Fourth Money Laundering Directive: Are you ready?
AML systems and controls remain high on the FCA’s agenda, with three months to go until the implementation of 4MLD. In this webinar, BBA associate members Kompli-Global will highlight key changes and how Regtech can help banks meet their obligations. To register click here.

Latest from our sponsor Jaywing

Ben O’Brien, Jaywing Managing Director, blogs on the benefits of developing integrated modelling programmes for IFRS 9 and stress testing.

Stat of the day

13%: The percentage rise of financial services jobs available in the Square Mile following 8,145 new job openings last month (Daily Telegraph, B4).

News in brief

The European Parliament’s ECON committee will discuss the EU Commission’s risk-reduction banking package with bankers, regulators and industry associations next week. Panels will look at capital rules regulation, the Bank Recovery and Resolution Directive and the Single Resolution Mechanism Regulation. (Politico, online) .

Austerity caused by the financial crisis is over, the IMF has announced. Government spending has risen and debt is expected to stabilise in the medium term, reducing the necessity for cuts (Telegraph, £, B1, online).

During his visit to London, Speaker of the US House of Representatives Paul Ryan said Washington is keen to strike a trade deal with the UK “as soon as possible” (Daily Mail, p2, online).

Consumers are increasingly relying on unsecured credit to support their households as cash is less readily available, according to a study by Markit, prompting concern among regulators about accessibility of credit (The Times, £, p44, online).

Despite the uncertainty of Brexit and the French election, the Eurozone has replaced the US as the most favoured place for investment amid wariness regarding the overvaluation of US equities (The Times, £, online).

Investment banks are expected to increase their transaction banking activity in Asia by 5% over the coming year in order to develop client relationships and strengthen their  presence in Asian economies (Reuters, online).

The ECB has said it does not intend to withdraw stimulus support from the Eurozone until inflation levels meet their target of 2% (Reuters, online).

Diary  

G20 Finance Ministers and Central Bank Governors Working Dinner.

CML mortgage lending figures for March 2017 are released.

Governor Mark Carney attends the Institute of International Finance event in Washington DC.

Jeremy Corbyn expected to announce his election manifesto.

What the commentators say

Writing in The Times (£, p45, online), Simon Nixon argues that the likelihood of a Brexit deal being achieved with the EU will improve if the Prime Minister increases her majority in the snap election, as is widely expected. He cautions, however, that the strength of Theresa May’s negotiating mandate will not sway the EU to move on its negotiating “red lines”; the improved prospects for a deal would be due to May being able to soften her own negotiating objectives on issues such as freedom of movement and CJEU jurisdiction, with greater freedom to defy her most ardent eurosceptic backbenchers.

In the Daily Telegraph ( B5) Tim Wallace warns that a rollback of prudential regulation, as has been promised by US president Donald Trump, is amongst the biggest threats to the world economy. A potential new paradigm of low interest rates, which have only just begun – cautiously – to rise in the US, is cited as another threat.

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