9th May 2017

BBA Brief – 9 May 2017

Banks set out Brexit contingency plans

More than a quarter of financial services firms are planning to move some of their staff or operations out of the UK after Brexit, according to EY (Financial Times, £, p2), with 21 of the 47 investment banks it surveyed setting out some detail on their contingency plans in recent weeks. Omar Ali, EY’s UK Financial Services Leader said, “the more complex the organisation, the longer it is going to take to create workable contingency options, and so investment banks in particular are putting their plans on record”.

Reuters (online) also reports that French authorities are expected to step up efforts to attract banking business from the UK. Arnaud de Bresson, Chief Executive of Paris Europlace estimated that Paris could attract 20,000 workers from Britain, noting that “Macron will personally make it his mission to convince the international banks as well as investors of the benefits of Paris”.

House prices fall by 0.2% in Q1 2017

House prices were 0.2% lower in the first quarter of 2017, the first fall since November 2012, according to Halifax data (The Daily Telegraph, £, B1). Commenting on the data, Halifax Economist Martin Ellis said, “signs of a decline in the pace of job creation and the beginnings of a squeeze on households’ finances as a result of increasing inflation may also be constraining the demand for homes” (The Times, £, p40). The Daily Mail (p21) notes that the Bank of England is expected to warn of further downward pressure on household income in its inflation report, to be published on Thursday.

Latest from the BBA

Mark Russell, BBA Senior Policy Director, Financial Stability blogs on the Bank of England’s latest MREL publication.

Spitch blogs on how automated data redaction can help banks comply with their regulatory requirements.

Rob Colwell, Partner, Strategy & Customer Advisory, Financial Services at EY blogs on what banks can learn about customer experience from Fintech start-ups.

Stilpon Nestor, Managing Director and Senior Adviser at Nestor Advisors calls for ESMA and the EBA to refine their proposed governance guidelines or risk bank boards becoming talking shops.

Thursday 11th MayBBA Webinar: Q2 Enforcement Update
Enforcd offer an overview of all UK financial services enforcement activity for the second quarter of this year, including FCA cases on market abuse and sharing confidential information via WhatsApp, and a PRA case on sanctions and relations with regulators. To register click here.

Wednesday 17th May BBA Client Assets Conference
During this event attendees will hear from a wide range of speakers across the industry as they discuss CASS challenges. Thanks to our partnership with Workiva, attendance for bank and public sector representatives is free. To see the full list of speakers and book your place, 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

71%: percentage of FTSE 100 banking executives that cite uncertainties over the UK’s political climate as the greatest barrier to growth (DWF, City AM).

News in brief

Emmanuel Macron’s victory in the French elections will benefit banks in peripheral European economies as the risk of a Eurozone break-up recedes according to The Wall Street Journal (£, online).

Bloomberg (online) reports speculation that there is a less than 60% chance that the Bank of England will adjust interest rates before the end of 2018.

The Independent (online) writes that anti-money laundering regulations have made it harder for banks to offer services in high-risk jurisdictions, highlighting the impact on charities and humanitarian projects.

The Daily Telegraph (£, p23) reports that criminals are increasingly targeting holidaymakers through money transfer fraud schemes.

Diary  

Mental Health Awareness Week (8 – 14 May).

ESMA Chair Steven Maijoor, FSB Secretary General Svein Andresen and CFTC Acting Chairman  J. Christopher Giancarlo to speak at ISDA conference today.

Barclaycard publishes latest consumer spending data.

Prime Minister and Philip May appear on BBC One’s ‘The One Show’.

What the commentators say

Patrick Jenkins (Financial Times, £, p14) argues that Brexit will prompt banks to reduce operations in Europe altogether rather than shifting activity between the UK to the EU, noting that investment banking fees were on average 22% lower compared to the US.

Writing in The Guardian (p29), Phillip Inman notes that the FCA is to review banks’ lending to car buyers,  amid fears that the use of personal contract plans may spark a fresh financial crisis as the number of arrears and repossessions rises.

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