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.
City calls for measures to retain UK competitiveness
The Financial Times (£, p3) reports that City organisations have called for steps to ensure the UK remains competitive after Brexit, including measures to encourage FinTech, employment of skilled labour and a proportionate approach to taxation. BBA Chief Executive Anthony Browne highlighted the need to normalise bank taxation.
FCA sets out priorities for FinTech
Christopher Woolward, FCA Director of Strategy and Competition, sets out the regulator’s approach to FinTech (City AM, p12). Around 70 firms have applied to be part of the FCA’s regulatory sandbox, which allows companies to trial innovative products, noting customers are likely to see rapid change in the types of products available to them. He also warned against using Brexit as an opportunity to create a “bonfire of regulation” noting that the UK’s reputation rests on the high quality of it’s market structures and operating environment.
Government may consider 10-year interim Brexit deal
Politico (£, online) reports that the Government is exploring a 10-year interim trade deal that would set tariffs at zero if a trade deal is not agreed as part of the formal Brexit negotiations. Citing WTO rules that would allow the UK and Brussels, “a reasonable length of time to agree a free trade deal”. The Daily Express (online) notes that this would reduce fears of a damaging cliff-edge when the UK leaves the single market.Read more
Bank of England holds interest rates but decision was split
Interest rates were held again yesterday after the Bank of England’s Monetary Policy Committee (MPC) voted to keep interest rates at 0.25pc (The FT, £, p3). However, the decision was split for the first time in eight months, with Kristin Forbes the only one of the nine members voting to raise rates (The Guardian, p31). Forbes, pens an op-ed in The Daily Telegraph (£, online, p2) explaining her contrarian view: “Monetary policy will continue to be set to keep inflation at around 2pc on a sustainable basis, taking into account our assessments of any trade-off with growth and unemployment. And, in my personal assessment, this trade-off has fundamentally changed. […] the inflation side of the trade-off has worsened.”
German Finance Minister calls for London to remain strong financial centre
Wolfgang Schauble, the German Finance Minister, delivered a keynote speech at the International Finance Conference in Frankfurt yesterday and indicated his hopes for negotiating a Brexit deal that keeps the UK’s key global role in financial services (Telegraph Business, p1, paper only). He said: “I am convinced that for Europe as a whole – and I’m not sure this will be very beloved in Paris – it’s in our own interest to have a strong financial centre in London” (City AM, p3). Downing Street stated that it had taken “great interest” in Schauble’s comments (Daily Mail, p10).
Treasury Select Committee Chair raises concern to FCA Chief about potential ONS data leaks
Andrew Tyrie MP has written a letter to Andrew Bailey, FCA Chief Executive, urging the regulator to examine whether “ONS statistics may be being leaked prior to their official release, and that this information is being used for inappropriate gain in financial markets” (The Daily Telegraph Business, p5, paper only). Tyrie’s request follows analysis conducted for the Wall Street Journal which showed that UK government-bond futures often rise and fall as would be expected if some traders were in possession of economic data in the 24 hours before the public release of sensitive ONS data. Bernard Jenkin MP, Chair of the Public Administration and Constitutional Affairs Select Committee, has also said his committee will discuss this issue and that “even circumstantial evidence of the breach of pre-release access undermines faith in the whole system.”Read more
Germany to make concessions on Basel III
The Financial Times (£, online) writes that German officials have signalled that “real progress” has been made in discussions around the introduction of an output floor into models for calculating capital requirements. Previously, it had been proposed that the floor should be set at 75%, with a phase-in period starting at 55%, however the paper reports that, “people familiar with Basel discussions said that the 55 per cent to 75 per cent range had now significantly narrowed”.
£2 million per day lost to fraud
The Daily Mirror (p10) reports on data from FFA UK that criminals steal personal details and credit or debit card information from approximately 5000 customers, with up to £2 million lost to fraud, every day. Commenting on the findings, FFA UK Director Katy Worobec highlighted a, “significant problem with fraudsters using increasingly sophisticated methods to circumvent bank technology and target victims”. The full report is available here.
Government to set up new anti-money laundering body
The Daily Telegraph (£, online) notes that the Government will set up a new body to tackle money laundering and address the gaps in oversight of existing money laundering regulations. The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) will sit within the Financial Conduct Authority (FCA) and is due to launch next year (City AM, p7).Read more
Banks ‘at risk’ of leaving UK unless transition plan in place
London Mayor Sadiq Khan has called for the Government to prioritise an early deal on interim arrangements for Brexit, “warning that banks “can’t wait” for the full two-year negotiation to be concluded” (Evening Standard, online). Giving evidence to a committee of MPs yesterday he said that although banks, “love being in London, because of the technology, the talent, the finance, the legal services, our court”, they will have no choice but to leave unless transitional arrangements are set out when Article 50 is triggered (Sky News, online).
Identity theft reaches record levels
Fraud prevention service CIFAS has found that there were 172,919 incidents of identity fraud last year BBC News (online). 88% of fraud was committed online and nearly 15% of victims were under 30, with the number of under-21s defrauded rising by a third, driven by the volume of data they share on social media. Read the BBA’s tips for consumers to help protect against online fraud.
30% Club: Diversity and development opportunities decline with seniority
A report published today by the 30% club has found that, “the chronic shortage of senior female executives can be linked to how people are managed”. The report comes as the Bank of England is encouraged to prioritise diversity as it looks for replacements for Kirsten Forbes and Charlotte Hogg to join the MPC (Financial Times, £, p1). The BBA’s Diversity and Inclusion report highlights the steps banks have taken to increase diversity and improve culture.Read more
Article 50 to be triggered after 27 March; SNP calls for second referendum
MPs and Lords have approved the Bill that will allow the Government to trigger Article 50. The Daily Telegraph (£, p) has reported that the Government is expected to do this after 27 March. Scotland’s First Minister Nicola Sturgeon has called for a second Scottish independence referendum between Autumn 2018 and Spring 2019 (The Guardian, p1). The Times (£, p6) reports that support for independence has increased to 51% since Prime Minister May confirmed the UK would leave the single market.
The Banking Standards Board publishes bank staff survey
The Banking Standards Board (BSB) has published a survey of 28,000 bank staff across 22 firms. BSB Chair Dame Colette Bowe highlighted findings on health and well-being, noting that the responsibility to ensure these figures improve lies, “fairly and squarely on the shoulders of the Board” (City AM, p6). The survey also found that 13% of staff said they might not be able to get ahead in their own careers without flexing their own ethical standards (Financial Times, £, p2).
Hackers target phones, TVs and watches with ransomware
The National Cyber Security Centre and National Crime Agency (NCA) have published a report saying that criminals are using software to exploit vulnerabilities in consumer devices and demanding money from users to make them operational again (The Daily Telegraph, £, p11. Speaking on BBC Radio 4’s Today programme, Donald Toon, the NCA’s Director of Economic Crime warned that criminals could use internet-enabled consumer goods to power, “distributed denial of service attacks” against banks and other businesses.Read more
Article 50 ’could be triggered tomorrow’
The Bill that allows the Government to trigger Article 50 could be agreed today, with MPs expected to reject changes made to the Brexit bill in the House of Lords requiring a Parliamentary vote on the deal and an early commitment to safeguard EU citizens’ rights (BBC News, online). The Financial Times (£, p1) speculates that the Prime Minister may trigger Article 50 as early as tomorrow and is expected to do so by the end of the week.
SNP could call for second independence referendum this week
Sky News (online) reports that SNP leader Nicola Sturgeon may call for a second referendum ahead of the SNP’s party conference on Saturday if Article 50 is triggered this week. The Daily Telegraph (£, p1) reports that the SNP wants to retain full single market access, and may issue an “ultimatum” to the UK Government asking for a bespoke Brexit deal for Scotland in exchange for not calling for a second independence referendum.
Review of economic crime enforcement agencies
The Financial Times (£, p2) reports that the Government is reviewing the bodies that enforce economic crime regulations, noting that the Serious Fraud Office may be incorporated into another agency. Home Secretary Amber Rudd said the review, “will include looking at the effectiveness of our organisational framework and the capabilities, resources and powers available to the organisations that tackle economic crime.”Read more
Prime Minister to ‘protect’ City during brexit talks
Prime Minister Theresa May has said that she will seek to protect the UK’s role as a global financial centre during Brexit negotiations in recognition of the contribution banks make to the British economy (Sky News, online). Guy Verhofstadt, the European Parliament’s chief Brexit negotiator has told BBC Radio 4’s Today programme that UK nationals should be able to retain certain rights, such as freedom of travel, but warned that the European Parliament will have veto powers to reject any deal brokered between the UK and EU (BBC News, online).
Second Scottish referendum ‘inevitable’
Reuters (online) reports that a second Scottish referendum is seen as inevitable by Government Ministers, despite Prime Minister Theresa May repeatedly dismissing the need for such a vote. The Financial Times (£, p2) notes that an Ipsos Mori poll published yesterday shows an equal split between Scots in favour of independence and remaining in the UK.
FCA and JFSA to cooperate on Fintech
The UK’s FCA and Financial Services Agency of Japan (JFSA) have set up a regulatory referral system to help innovative financial services businesses enter each other’s markets (Banking Technology, online). Christopher Woolard, the FCA’s Executive Director of Strategy and Competition, said: “we are committed to encouraging innovation that has the potential to be of benefit to consumers using financial services here in the UK.”Read more
Chancellor delivers final Spring Budget
Sky News (online) summarises key changes announced in yesterday’s Budget, including changes to NICs for the self-employed, £2 billion social care funding and the introduction of technical T-Level qualifications. Significantly, the Budget confirmed the UK as the second-fastest growing economy in the G7 in 2016, and sought not to surprise the markets ahead of the triggering of Article 50 at the back end of March.
Banks forecast to pay £27bn tax through the bank levy and surcharge
City AM (p1) reports that banks are expected to pay GBP27bn from the bank levy and corporation tax surcharge between 2015-16 and 2021-22. The Financial Times (£, p9) notes that this is £400 million more a year than initially forecast. Commenting on the Office of Budget Responsibility data, the BBA said, “while banks expect to pay their fair share of tax, the industry has now been subject to five bank-specific tax measures since 2010. We believe it’s time the government draw a line in the sand; hold a strategic review of bank taxation and confirm the surcharge will be scaled back as corporation tax receipts normalise.”
Autumn 2018 for potential second Scottish Independence vote
Scottish First Minister Nicola Sturgeon has said that Autumn 2018 would be a “common sense” date for any second independence referendum (Reuters, online). SNP economic spokesman Stewart Hosie told BBC Radio 4’s Today programme that no decision to call for a second referendum had been taken, although the prospect of a, “hard Tory, cliff-edge Brexit” might make this more likely (BBC News, online).Read more
The Financial Times (£, p1) expects the Chancellor to deliver an economically defensive “Brexit Budget” maintaining a £27 billion war chest, ahead of the “imminent” triggering of Article 50.
The Daily Telegraph (£, p1) writes that the Budget will contain an upbeat assessment of the UK’s economic condition, with £1.3 billion expected to be spent on business rate relief and social care.
The Daily Mirror (p34) has called for the Chancellor to simplify the savings landscape, noting that the introduction of the lifetime savings ISA risks leaving customers without adequate retirement savings.
Government seeks to overturn Brexit Bill amendments
The Guardian (p4) reports that the Prime Minister will seek to overturn amendments made by the House of Lords to the Bill that would allow the government to trigger Article 50. Bloomberg (online) reports that MPs are likely to decide whether to reject these amendments in a vote on Monday next week.
Partial progress in increasing board gender diversity
The Financial Times (£, special report, p1) reports that progress in encouraging gender diversity has been mixed, with more women on boards overall but concentrated in fewer companies. It sets out four ways to increase gender diversity across the workforce, including public reporting against set goals. The BBA’s most recent gender diversity factsheet sets out progress on diversity and inclusion in banking.Read more
The Guardian (p1) reports that the Chancellor will invest £320 million in 140 new schools, many of which are expected to be selective grammar schools.
The Telegraph (£, p4) reports that the Budget will not include reforms to stamp duty, although it is understood that Treasury officials have recently reviewed potential reforms.
The Independent (p4) reports that the Chancellor may change rules on capital gains tax and restrict pension relief for high earners to raise revenue, with total tax increases of £3 billion expected to be announced tomorrow.
Brexit costs and clearing relocation
The Times (£, p43) reports that some EU banks are considering re-registering their UK entities as third country branches, which is likely to increase costs and require more intensive regulatory supervision of their activities. German Economic Minister Tarek al-Wazir has said that he expects Euro-clearing to relocate to Frankfurt and other EU 27 locations after Brexit, noting that EU “needs access if anything goes wrong” (City AM, p2).Read more