The BBA is now integrated into UK Finance. Please go to www.ukfinance.org.uk for new content and updates from UK Finance.
Material published by BBA prior to 1st July 2017 is still available on this website.
From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.x
BBA brief is a round up of each morning’s banking policy news prepared by the BBA’s media team. It is a selection of the articles in the papers and broadcast stories. The content does not reflect the views of the BBA.
ECB puts pressure on new Greek government
Last night the European Central Bank revoked a waiver that allowed banks to use Greek government debt as collateral for loans (Times, £, p41). The central bank reportedly no longer felt confident that there would be a “successful conclusion” to the country’s bailout talks with its lenders. This move follows a tour of European capitals by the new Greek prime minister Alexis Tspiras and his finance minister Yanis Varoufakis, during which they are said to have received a “largely sympathetic” reception from their European counterparts. Greece is currently seeking to renegotiate bailout terms with creditors in order to avoid running out of money and freezing its banking system. The Telegraph (B1) reports that cutting off vital funding in this way will be viewed as “an attempt by the ECB to isolate Greece unless it strikes a new reform deal”. Stock markets fell sharply at the move.
Liberal Democrats propose to raise tax on banks
The Liberal Democrats have outlined plans to make £30 billion of savings before 2017/18. The party has also said it would raise an extra £8 billion for public finances by increasing taxes on business, banks and wealthy foreign nationals (Guardian). As yet the party have only worked through how to generate approximately half of the £8 billion.
Liberal Democrat leader Nick Clegg said: “Liberal Democrat plans are for a bigger tax contribution from those who can afford to pay: the wealthiest individuals and big businesses which are not always paying their fair share. We do not wish to raise the tax burden on those on low and middle incomes, which is why our plans do not involve any increase in the rates of income tax, NICs and VAT. In fact, we want to cut the taxes of those on low and middle incomes. If public services and the most vulnerable in society are to be protected, then the wealthiest and big business will have to pay their fair share.”
Labour tax change for hedge funds
Labour plans to make changes to the way the hedge funds pay tax on UK shares (FT, £). At the moment intermediaries relief means that banks who buy and sell shares for clients do not have to pay stamp duty reserve tax. Labour leader Ed Miliband says that these exemptions have been exploited by hedge funds who enter financial contracts with banks to get an economic exposure to shares rather than buying the shares themselves using a type of derivative contract known as a contract for difference. This means that hedge funds fall under the intermediaries relief and no stamp duty is paid on such trades. Hedge funds have argued that they are being unfairly singled out from other market participants with similar arrangements, and have also questioned how a Labour government would define which type of investor is known as a hedge fund.
Banks give evidence to Treasury Select Committee
Senior figures from Metro Bank and the Royal Bank of Scotland gave evidence on the fair treatment of banking customers to the Treasury Select Committee yesterday. Speaking to the Committee, the managing director of products for RBS, Moray McDonald said that ending the system whereby bank accounts are funded by fees, charges and cross-selling could improve retail banking and make firms “more able to innovate”, though he did not call for an end to free, in-credit banking (Times, £, p47). Mr McDonald also told the committee that customers increasingly prefer to use telephone and internet banking.
At the same hearing the chief executive of Metro Bank, Craig Donaldson, called for reforms to enable challenger banks to compete more effectively, including reducing the amount of capital new lenders must hold.
You can read the BBA’s paper on banking competition here.Read more
BBA calls for licencing in FEMR response
The BBA has called for all traders operating in the fixed-income, currencies and commodities (FICC) markets to gain qualifications, writes Sky News. In its response to the Fair and Effective Markets Review consultation, the BBA suggests that these qualifications would constitute “a licence to trade”, and that regulators should endorse industry codes of conduct “in order to provide them with added teeth”. The FT (£) notes that many banks already require their staff to attain professional qualifications. The Chartered Institute of Securities and Investment told the paper they support this position, and that it would make the licence “annually renewable”.
The BBA also calls for non-bank traders to be subject to the senior manager and additional certification regimes in order to ensure “a level playing field”. In addition, a professional code of conduct should be incorporated into current company policies, rather than overseen by a new professional standards body.
CityAM (p2) quotes BBA Chief Executive Anthony Browne: “This is a once in a generation chance to clean up financial markets – we must seize it. We want London to once again set the gold standard for fair dealing and integrity in financial markets. We want to make sure that all traders are professionally qualified, that existing codes of conduct are reformed and given teeth and an extension of new rules to increase personal accountability and responsibility of senior managers.”
The full BBA press release can be read here.
Read BBA Senior Policy Director Andrew Rogan’s blog on why rebuilding trust and confidence in the FICC markets is vital.
Lord Hill calls for balance between stability and growth
Jonathan Hill, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union, told a House of Lords Committee yesterday that rules governing the financial services industry could be pared back if they were found to be no longer required for stable markets (Telegraph, B3). Lord Hill recognised that much of the legislation brought in after the financial crisis was necessary for stability, but now was the time to “identify where practitioners are pointing to some consequences” in order to ensure that growth is not being hindered.
Turning to Capital Markets Union, he said that there was a “strong wind of support” for the initiative throughout Europe. Lord Hill told the Committee that as Commissioner overseeing finance: “I want to be in a position where I can champion the contribution that financial services industries make to the European economy.”
ECB resistant to Athens plan
The European Central Bank is resisting a key element of the Greek government’s rescue plan, which could leave Athens with no source of outside funding after its bailout expires at the end of February, reports the FT (£, p1). Central bank officials are unwilling to raise a €15 billion (£11.3 billion) ceiling on treasury bill issuance, which Greece has planned to use as “bridge financing”. This would leave Athens without access to emergency funds, although the government claims that it can survive without additional cash until June. The paper suggests that this is “likely to puncture a sense of optimism among investors over Greece’s alternative rescue plan and a softening of its insistence on debt cancellation”. However, Greek finance minister Yanis Varoufakis told the Telegraph (B1): “These threats are perfectly illegitimate. They are trying to asphyxiate us with arbitrary deadlines”.Read more
Banks to face news stress tests
Regulators will make banks face further stress tests from 2016 which “could lead to many more failures”, according to the Independent (p49). In addition to the Bank of England’s tests, lenders will have to create simulated shocks – approved by regulators – which are tailored to their businesses. The Independent suggests that the Prudential Regulation Authority delayed introducing “tailored idiosyncratic disaster testing” until next year in order to let the current regime of stress testing bed in. The paper notes that this year’s economic shock scenario created by the Bank is likely to “test the impact of a dramatic downturn in so-called emerging market economies”.
BoE given more powers over financial stability
The Bank of England has been given powers to prevent banks from issuing “risky” mortgages if officials believe that the housing market is becoming too stretched, writes the Times (£, p39). The Financial Policy Committee will be allowed to set loan-to-value limits and instruct banks to cut the size of mortgages relative to buyers’ income. Chancellor George Osborne said: “Curbing Britain’s age-old vulnerability to banking and housing booms is one of the goals I recently set for the next two decades of Britain’s economic policy.”
Greece unveils plans to tackle debt
The new Greek government has outlined proposals to address the country’s debt. Finance minister Yanis Varaufakis’s plans involve “swapping outstanding debt for new growth-linked bonds, running a permanent budget surplus and targeting wealthy tax evaders” (FT, £, p1). Mr Varaufakis confirmed that Greece would not look for a write off of its €315 billion (£238 billion) foreign debt. The Times (£, p43) reports that Mr Varaufakis still expects the European Central Bank to maintain a funding lifeline to Greece, but that Athens intends to reject any more loans under its bailout.
George Osborne met with Mr Varaufakis yesterday, after which the Chancellor warned that the stand-off between Greece and the eurozone posed the “greatest risk to the global economy”. However, the Greek finance minister insisted there would be no “wild west showdown” between Greece and Brussels, assuring that “there will be a deal within a very short space of time” (Telegraph, B1).Read more
Basel rules could hurt first-time buyers
The Times (£, p16) reports that proposals from the Basel Committee on Banking Supervision could lead to banks having to increase the cost of mortgages for higher risk customers such as first-time buyers. The article suggests that the new rules could more than double the amount of capital that banks have to hold against lending. The article quotes BBA Executive Director Simon Hills saying: “It’s hard to see how this would not harm our country’s property market. The detail of this paper suggests that first-time buyers, and others who need high loan-to-value products, would be particularly badly hit.”
Read more from Simon Hills’ on this issue on the BBA website.
EY: lending to corporates set to increase
The Telegraph (B3) reports that the EY ITEM Club is predicting that net lending to businesses will rise 17% by 2018, funnelling up to an extra £66bn into UK companies. The report predicts that borrowing will remain fairly stable this year as uncertainties in the global economy deter big companies from borrowing to invest. Chris Price, head of EY’s UK financial services division, says that the sector is now seeing a “permanently changed borrowing behaviour”, with many companies seeking finance from alternative providers. He said: “The period since 2008 has seen alternative finance establish solid foundations, and it is not expected to lose its footing just because banks are gearing back up for action. Bond issuance in particular is up almost 23% since 2009 and ran at £7.5 billion per quarter in 2014, contrasting with bank lending, which averaged minus £2bn per quarter in 2014 as companies repaid more than they borrowed. The challenge for banks now will be regaining market share from the alternative finance providers who have successfully plugged the gap for the last six years.”
The article quotes BBA figures which shows that “outstanding business lending has been falling as larger firms have used the bond market rather than borrowing from banks.”
PwC: free banking to disappear within a decade
A new report by PwC has predicted that the UK’s free while in credit banking model could disappear within ten years, according to the Telegraph (p9). The Times (£, p40) quotes Steve Davies from PwC saying: “The free banking model stifles innovation and competition in the current account market. It requires new challenger banks to achieve scale very quickly if they are to survive and it fails to reward banks that come up with new ideas as costs cannot be recovered.” The paper reports that a a PwC survey of 2,000 bank customers found that 62 per cent would not be prepared to pay for a bank account and that half of those interviewed said that they would move their account if their bank introduced charges.
Concerns grow over Greek capital flight and support for Greek banks
Greek Finance Minister Yanis Varoufakis will meet with Chancellor George Osbone today in an attempt to drum up support for a revised debt deal for Greece as economists warn about the dangers of capital flight from the Greek economy. Mr Varoufakis made clear that he expects the country’s banks to be propped up by the European Central Bank (ECB) until any deal is done, which he expects to be in May. Greek banks are currently relying on cheap loans from the ECB but officials have warned this would have to stop if the current debt programme is allowed to expire at the end of February (Guardian, p25, FT, £, p1).
Lords warn on declining British influence
The Times (£, p40) reports that the House of Lords EU sub-committee has warned that the City of London is being damaged by the UK’s receding influence in Brussels and calls on the Government to do more to increase the number of British officials in the European institutions. The Lords report cites the BBA’s work on this issue which can be read here. BBA Chief Executive Anthony Browne also gave evidence to the Committee on the issue.Read more
EU countries meet to discuss bank reform
The FT (£, p6) reports that officials from France, the UK, Germany, Sweden and the Netherlands will meet today to discuss “reforms to break up Europe’s big banks.” According to the article, the talks held by “five of the most sceptical countries” signal that bank structural reform proposals are on course to be “watered down” as France and Britain push for “maximum national leeway in how the structural overhaul is implemented”.
The ECB are said to be alarmed at the suggestion that measures could be implemented as a directive, rather than a regulation, leaving member states more room to interpret them. Neither the European Commission nor the European Central Bank were invited to the discussion, which has been convened by Latvia – the current holder of the EU’s rotating presidency.
ECB warning on bonuses
The ECB has warned banks not to distribute too much capital in bonuses to staff or dividends to shareholders, adding that they would thoroughly examine the bonus policies of banks over the coming months (Times, £, p47). Head of the central bank’s supervisory division, Daniele Nouy, said: “Banks should base their dividend policies on conservative and prudent assumptions so that after any payout they can still fully cover their current capital requirements and prepare themselves to meet more demanding capital standards.” This warning follows a review by the ECB’s supervisory wing back in October which looked at whether eurozone banks would be able to withstand another economic downturn.
Payments industry gears up for deals
Banks are racing to stay ahead of payments rivals such as Apple, Amazon and Google, according to the FT (£, p18). Bankers and technology experts are preparing themselves for further changes to the industry landscape, with a number of significant new deals in the offing. The notable negotiations taking place include Google’s plans to buy mobile wallet group Softcard and eBay’s expected spin-off of Paypal. Such movement is said to have been prompted by the growing popularity of Apple Pay, which reportedly now accounts for two of every three dollars spent via contactless in the US.
UK 10 year borrowing costs at all-time low
The UK government’s borrowing costs dropped to a record low of 1.396% yesterday as a result of static interest rates and recent action from the European Central Bank (FT, £). Slow inflation globally and growth concerns have had a similar impact on government borrowing costs elsewhere in the world. The last time the UK’s 10 year gilt fell to an historic low was in the midst of the 2012 eurozone crisis when investors “sought refuge in the relative safety of UK government debt”.Read more
Investment banks eye peer-to-peer lending
The FT (£, p1) reports that Goldman Sachs and Société Générale are amongst several potential bidders for Aztec, an emerging peer to peer financing platform. P2P competitors initially spurned banks, trying to use state of the art technology to match potential investors with those looking for finance. However, this growing sector is now turning to large finance groups to fuel its expansion. The same paper also reports that Arianna Huffington, who leads the Huffington Post Media Group, has joined the board of Payoff, one of the leading US peer-to-peer lenders.
Carney calls for eurozone fiscal union
In a widely reported speech Bank of England Governor Mark Carney has said the eurozone needs to do more to “share risks”, adding that the failure to have a single fiscal authority puts the area in an “odd position” compared with other currency unions (BBC). Speaking in Dublin, Mr Carney said: “European monetary union will not be complete until it builds mechanisms to share fiscal sovereignty.” The Governor’s intervention came a week after the European Central Bank unveiled a €1.1 trillion (£846 billion) bond buying programme to boost growth across the ailing eurozone.
Greek bank shares suffer their worst day’s trading as Athens mulls new debt plan
The Daily Mail (p70) reports that share prices of Greek banks plummetted by more than 27% yesterday, taking losses since last Sunday’s election to 40%. The falls came as Germany’s Bundesbank warned that Greece would lose access to bailout money from the European Central Bank if it reneges on its austerity package. Customers have withdrawn around £6 billion - around 4% of Greek bank assets – since last month when Syriza became the expected winner of the country’s general election.
Basel discusses new bank disclosure rules
Banks will be obliged to disclose the risks on their balance sheets in even greater detail under proposals being discussed by the Basel Committee on Banking Supervision, the FT (£, online only) writes. The moves are part of an ongoing strategy to make it easier to compare the financial health of banks and ascertain whether some organisations should be holding more capital to cover their risks. Stefan Ingves, the committee’s chairman, said: “These changes substantially strengthen the disclosure framework and will help users of the disclosures to better understand and assess the measurement of a bank’s risk-weighted assets.”Read more
Recovery “on track,” Chancellor says
The FT (£, p1) leads with news that Britain’s economy grew at 2.6 per cent in 2014, its fastest in a calendar year since the financial crisis. Chancellor George Osborne told MPs that that the figures showed “Britain has the fastest growing economy in the world in 2014”. However, the fourth-quarter growth figures indicated that the British recovery losing some of its momentum, and highlighted its dependence on the services sector, the paper says. The Guardian (p19) quotes economist Chris Williamson from Markit, who warned that several challenges lie ahead for the economy, including potentially a new phase of political uncertainty in the eurozone arising from Syriza’s election victory in the Greece. “The upcoming general election in the UK also poses a threat to stability in the event on an inconclusive outcome,” he adds.
Yesterday, figures released by the BBA showed that the number of house purchase approvals in 2014 was 9% higher than the previous year. New deposits into ISAs run by banks were also up 57% on 2013 (BBC News).
BBA Chief Economist Richard Woolhouse was also quoted by the Guardian on the figures.
Liquidity squeeze looms in Greece
Shares in Greece’s banks have lost a quarter of their value in two days, as the threat of a bank run and the loss of support from the European Central Bank threaten a liquidity squeeze (Telegraph, B4). Yesterday the Athens Bank Index fell to an all-time low, and the country’s five largest banks have lost €15 billion (£11 billion) in four months. Alexis Tsipras, Greece’s new prime minister, unveiled his cabinet which includes a former communist politician and a left-wing blogger in top economic posts (FT, £, p8). The paper adds that the final line-up is likely to raise concerns among investors fearful Athens will row back on reforms, attack big business and take a tough stance on renegotiating Greece’s debt.
Countdown to the general election
With just 100 days to go until the general election, campaigning kicked off in earnest yesterday. Prime Minister David Cameron told Sky News that a Labour government would “wreck economic progress”, while Mr Miliband charged that the Conservatives would leave the NHS “unrecognisable”. Meanwhile, the FT (£, p2) says the City of London would cease to be a leading global financial centre under Green Party plans for the economy. Green Party proposals also include retaining the Government’s stake in RBS and Lloyds Banking Group and using it to create a “People’s Bank” that would “in effect be a high street branch of the Bank of England”.Read more
BBA figures reflect growing economic confidence
High Street Banking figures released by the BBA today reveal consumer confidence is growing as the economy continues to strengthen. In 2014, there were 2.5 billion credit card purchases, some 8% more than in 2013. Annual growth in unsecured borrowing is currently 3.8%, the highest rate since late 2008. In addition, the number of house purchase approvals in 2014 was 9% higher than the previous year.
BBA Chief Economist Richard Woolhouse said: “The mortgage market has been softening since the spring, but for customers taking out home loans right now there are some great deals and we expect the market to begin to grow again this year. Robust employment data is making many of us feel more secure in our jobs and optimistic about our futures. That’s now feeding through to personal lending and credit card data, suggesting people are happy to finally replace the car or spend on household improvements. Outstanding business lending has been falling as larger firms have used the bond market rather than borrowing from banks. Despite this, outside real estate businesses are generally expanding their lending.”
European banks call for capital rules rethink
Senior bankers at Europe’s largest institutions have warned that the European Central Bank’s quantitative easing programme will be “blunted by tough capital rules designed to curb risks in securitisations”, reports the FT (£, p16). Meeting in private sessions at the World Economic Forum, bankers said that revisions to Basel III would “encourage more securitisation, ease the shift of assets from constrained bank balance sheets to capital markets” and make the ECB’s plans “more effective”.
Syriza forms coalition government
Syriza, victor in the Greek election, has formed a coalition with the right-wing party Independent Greeks after falling two short of an absolute majority (FT, £, p1). Although the parties sit on opposite sides of the political spectrum, the right-wingers are “as fiercely opposed as Syriza to the strict conditions attached to the nation’s €245 billion (£182 billion) bailout”. According to the Times (£, p30), the deal was struck with the understanding that Prime Minister Alexis Tsipras would have “a free hand in charting economic policy and negotiating a new deal with lenders”.
However, the FT notes that Greece’s international creditors have “ruled out any outright debt forgiveness and signalled no let up on economic conditions tied to the bailout”. In a second article, the FT (£, p6) quotes Jeroen Dijsselbloem, the Dutch chair of the eurogroup of finance ministers, who said: ”I don’t think there is support for that [writing down Greece’s debts]”. But Alex Stubb, Finland’s prime minister stated: “We will not forgive loans but we are ready to discuss extending the bailout programme or maturities.”
CityAM (p1) reports that shares in the four largest Greek banks fell by around 10% yesterday. The Mail (p62) cites figures from the Bank of International Settlements which reveals that UK banks have lent £8.9 billion to Greece. However, the paper admits that the biggest banks have reduced their exposure to Greece, with regulators stating that exposure is “spread around the financial system among a number of smaller UK lenders”.Read more
Millions of “silver surfers” harness mobile and internet banking
Nearly 2.3 million people aged between 70 and over 100 years old are now using internet banking, new industry figures compiled by the BBA show today (Times, £, p35). The study also shows that more than 450,000 customers over 60 are harnessing banking apps on smart phones, iPads and other tablets.
The figures are the latest part the BBA’s Way We Bank Now work, which has charted the rapid rise of a range of new consumer-friendly banking technologies, including contactless cards and text alerts. CityAM (p8) quotes BBA Chief Executive, Anthony Browne, who said:
“These figures shatter the myth that this technology is only for younger generations – millions of older people are avid users of banking websites and apps. Banking on the move is as much a reality for silver surfers as it is for students.
“Customers of all ages like the fact that they can now make payments, check balances and do other banking tasks from the comfort of their home without trudging into town. It’s precisely because these technologies are so popular with people of all ages that banks are investing so heavily in them.
“Not everyone will want to harness these new services, but it’s vital that no one feels excluded from this easy-to-use technology and that banks continue to give all the support they can to those who want to learn how to join what is fast becoming a banking revolution.”
Cable to call for banks to link-up with Post Offices
Business Secretary Vince Cable is expected to put pressure on high street banks to improve their links with the Post Office and to do more to help rural communities following further branch closures last year (Times, £, p35). When Dr Cable meets with banks tomorrow he will ask them to expand their work with the Post Office, with a particular focus on allowing small businesses to use their counters for banking services. Banks already allow their customers to use counter services at the Post Office’s 11,500 branches across the country. RBS chief executive Ross McEwan said last year that the bank’s busiest “branch” was “the 7.01am from Reading to Paddington” when there was apparently a surge of customers using their mobile phone to access mobile banking.
The BBA’s Way We Bank Now work provides more insight into the changing habits of bank customers, who are increasingly using online services to do their day-to-day banking.
Ex bank boss says “vishing” should be refunded
The Mail (p12) cited the BBA’s Know Fraud, No Fraud campaign as part of efforts being made by the banking industry to protect consumers from predatory fraudsters. At the weekend former Bank of Scotland chairman Sir Peter Burt told The Sunday Times that banks should automatically refund customers who are victims of vishing or similar scams and encouraged customers to sue financial institutions that don’t refund.
A spokesman for the BBA said: “Banks are determined to stop such crimes. It is important cases are handled on a case-by-case basis and banks work with customers.”
Syriza victory in Greek elections
The FT (£, p1) reports that impending victory for the left-wing Syriza party in Greece could mean that the eurozone will see their “most explicitly anti-austerity administration since the financial crisis erupted in 2008”. The paper notes that “Syriza’s victory throws down a challenge to European governments determined to resist its demands for extensive debt relief and an end to austerity”. The Telegraph (B1) writes that the global markets “are braced for an extended bout of extreme volatility” due to the election result, as concerns grow that the country could default on its debts, which are at 175% of its GDP.
Syriza will shortly begin coalition conversations this week after narrowly missing out on an outright majority by two seats.Read more
ECB bond-buying “exceeds expectations”
The FT (£, p1) reports that the bond-buying programme revealed by ECB president Mario Draghi yesterday was “far bigger than investors had expected”, with the bank chief saying that the ECB would buy more than €1 trillion of government and private sector bonds by September next year. The measures have no stated end date and can go on until inflation is on a path consistent with the ECB’s inflation objective. The moves came in the face of opposition from Germany (FT, £, p6), where there was concern that it might prevent some European countries from reforming their own economies. These concerns have been shared by George Osborne. The central bank had been under pressure to take action as the eurozone faced deflation and zero growth.
The Times (£, p1) says that the stimulus measures “will herald a new era of cheaper holidays and cut-price imports for Britain”. The paper reports that the pound soared to a six year high against the euro following Mr Draghi’s announcement.
Banking scams and cybercrime continue to evolve
The Times (£, p20) writes that new sophisticated telephone and internet fraud tactics are evolving and “duping even the most cautious consumers”. A report from Which? says that the advanced techniques include posing as technical support experts and bank employees, as outlined in the BBA’s Know Fraud, No Fraud campaign (@BBAKnowFraud). The report urges customers not to be embarrassed about falling for a scam, and to contact the police and their bank. Financial Fraud Action UK figures suggest that the amount lost to telephone-based fraud in the UK last year is around £24 million.
The Telegraph (p8) reports that your bank account is now more likely to be targeted by criminals than your home. This is according to new ONS statistics which show that 212,699 frauds were recorded in the year to September, compared with 204,136 domestic burglaries. The article says that a huge amount of crime has moved online, contributing to a 5% rise in fraud overall. The ONS said that the overall figures do not include the 391,000 fraud offences reported to the financial services industry over the same period.
Meanwhile in Davos, some of the world’s biggest banks are putting pressure on government officials to “pursue cyber criminals more aggressively or let the industry off the leash to fight them directly” (FT). Some bank cyber-attack experts are asking permission to mount an “active defence” against cyber criminals, involving hackers being trapped or misled in a company’s network, though according to the article there are some concerns that pre-emptively striking the computer servers used by hackers might be “going too far”.
Davos experts warn against US tightening monetary policy
The United States Federal Reserve risks inflicting “a deflationary spiral and a depression trap” upon the world if it moves to tighten monetary policy too soon, according to a panel of experts in Davos (Telegraph, B5). Larry Summers, former US Treasury secretary, said that the US should not be fighting off inflation until it “sees the whites of its eyes” and warned that the world economy is heading for “treacherous waters” as US expansion reaches its seventh year – the typical life expectancy for recoveries. His concerns were echoed by Ray Dalio of Bridgewater, who said a “central bank supercycle of ever lower interest rates and ever more debt creation has reached its limits”. Christine Lagarde, head of the IMF, responded to Summers saying “If the US is in a bad place, we are short of any engine at the moment so I hope you are wrong.”Read more