23rd June 2017

BBA Brief – 23 June 2017

ECB to set up Eurozone instant payment system

The ECB is to create a 24 hour instant payment system for Eurozone consumers and businesses called TIPS (Target Instant Payment Settlement) to launch in November (Financial Times, £, online). Commenting on the announcement, the ECB said the system will “help facilitate instant money transfers, offered via banks, so that citizens and firms can make instant retail payments across Europe”.

US banks pass latest round of stress testing

The US Fed has announced that the 34 largest US banks have passed the latest round of stress testing, designed to test the impact of a global recession with a 10% increase in unemployment and significant falls in property values (BBC News, online). Reuters (online) reports that a number of commentators have said the results should prompt regulators to relax regulatory standards, “we see today’s…stress test results as a positive for Trump administration efforts to deregulate the banks,” said Jaret Seiberg, a policy analyst with Cowen & Co.

Increase in first-time buyer activity

Data from the CML suggests a recovery in activity by first-time buyers, with a slow-down in buy-to-let purchases which averaged at 6000 per month, nearly 50% lower than last year (The Times, £, p40). Commenting on the data, Alastair McKee, Managing Director of broker One 77 Mortgages, said: “Buy-to-let remains on the back foot while first-time buyers are very much on the front. It’s a narrative that has been consistent throughout 2017 and is likely to continue for some time yet”.

Latest from the BBA

Sam Mannion, BBA Policy Advisor, blogs on what Bank of England Governor Mark Carney’s Mansion House speech tell us about the future of regulation.

Mark Russell, BBA Senior Policy Director Financial Stability blogs on the longer-term impact of the first significant test of the EU’s bail-in regime.

Tuesday 27 June Hanging on and Letting go! The art of Delegation under SMCR

Focus is turning to how firms and individuals manage delegation under the SMR regime. This interactive two hour workshop will cover a number of case study scenarios, with practical examples of record keeping, and workflow processes. To register, click here.

Thursday 29 June BBA Annual Retail Banking Conference 2017

The full speaker line-up is now confirmed for the Retail Banking Conference including new City Minister Stephen Barclay MP, Andrew Bailey, Chief Executive of the FCA and CEOs from some of the UK’s largest Retail banks as well as challengers and specialist banks who are changing the future of the banking landscape. 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

With multiple pressures already bearing down on capital, how does a smaller bank cope with the dichotomy of having to lend to support the SME and mortgage market at a time when CRD IV combined capital buffers are increasing in time for 2019? Is now the time to be considering IRB as a means of optimising capital? Read our latest blog to find out more.

Stat of the day

£35 million: CML’s prediction for the total value of landlord loans to be made in 2017 (reported by The Times).

News in brief

BBA CEO Anthony Browne has been interviewed by City AM (p13) ahead of his final week at the BBA.

The ECB is seeking powers to oversee Euro clearing, arguing that it needs oversight of instruments that affect monetary policy (Bloomberg, online).

The Times (£, p43) reports that Chinese banking regulators will review debt-financed commercial acquisitions amid fears over banks’ exposures to risk.

Outgoing MPC member Kristin Forbes has called for the Bank to start increasing UK interest rates (Sky News, online).

The Financial Times (£, p5) sets out six possible Brexit scenarios, noting that most options suggest that the UK is heading for a clean break with the EU.

Diary

  • Hometrack publishes UK Cities House Price Index.
  • Leaders of EU 27 countries meet to discuss Brexit.
  • 1st anniversary of Britain voting to leave the EU.

What the commentators say

Writing in The Times, (£, p26) Paul Johnson warns that large increases in taxation risk stoking inflation and reducing living standards, arguing that policy-makers need to do a better job of setting out the trade-offs created by public spending choices.

Alex Brummer (Daily Mail, p71) argues that the economy is resilient enough to withstand a small increase in interest rates, noting that the Bank of England must get ahead of the curve and adjust interest rates to curb inflation early.

James Shepherd-Barron writes that the ATM remains the most innovative financial product, transforming the relationship between banks and their customers, and the public attitude to cash (Financial Times, £, p13).

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