Banks scramble to find leaders equipped for today’s economic realities
CNN
23-09-19 11:32
Wall Street executives, who came up during the era of easy money, are finding it difficult to run a bank in the current environment of high inflation and interest rates. As a result, some of them, including Citigroup CEO Jane Fraser, are making drastic, expensive, and often unpopular changes to their institutions to help them keep up. Banks are also reshuffling their CEOs and cutting jobs in response to the challenges of operating in today's unpredictable market.
No evidence banks are closing accounts due to political beliefs, says UK watchdog
Reuters
23-09-19 11:07
The UK's Financial Conduct Authority (FCA) has said there is no evidence to suggest that banks have been closing accounts due to customers' political views. However, the FCA added that more detailed scrutiny is needed, as there are gaps, limitations, and inconsistencies in the data it has received so far. The FCA's investigation was prompted by former Brexit Party leader Nigel Farage's claim that his account at Coutts bank was closed because of his political views. Farage has dismissed the FCA's findings, calling its report a "whitewash and a joke."
FCA chief: Many questions remain around ‘de-banking’
Financial Times
23-09-19 11:06
The Financial Conduct Authority (FCA) has said that banks closing accounts based on customers’ political beliefs is not a systemic problem. While there have been reports of accounts being closed or denied due to political views, the FCA’s data shows that these views have not been the primary driver for any personal account closures. The FCA will undertake further checks to better understand the reasons behind account closures. The regulator also highlighted that financial crime and banks’ tolerance for risk are the main causes of account closures.
NatWest’s Howard Davies urges BoE to take in ‘national interests’ over bank capital
Financial Times
23-09-19 17:34
Sir Howard Davies, chairman of NatWest, has urged UK regulators to adopt a more bank-friendly approach when setting rules on capital requirements, taking into account “legitimate national interests”. He suggested that the Bank of England should carefully observe the US backlash against increasing capital before finalising its own version of the latest global rules. Davies said that the UK’s banks could be put at a competitive disadvantage to their European neighbours if UK regulators adopt a more penal approach to capital rules than those in the EU.
The city watchdog’s debanking report is a total stitch-up
Telegraph
23-09-19 15:38
The author of this article expresses frustration with the Financial Conduct Authority (FCA) over its investigation into "debanking," the practice of banks closing accounts for political reasons. The author alleges that the FCA's investigation was a "stitch-up," as it concluded that no one had been debanked due to political opinions. The author argues that the FCA did not dig deep enough or ignored evidence altogether, and suggests that the regulator is not fit for purpose. The author also criticizes the FCA for having personnel with political biases in key roles and calls for a change in leadership.
NatWest chair blasts Bank of England over regulating lenders
Reuters
23-09-19 15:13
NatWest Chair Howard Davies has warned that the Bank of England (BoE) risks making banks "uninvestible" due to its application of capital requirements and ad hoc changes. Speaking at a BoE conference, Davies criticised the central bank's decision to ban banks from paying dividends during the COVID-19 pandemic, arguing that it damaged the image of European banks and had a significant impact on competitiveness. He also raised concerns that the BoE's Prudential Regulation Authority (PRA) is too focused on capital holdings and not enough on profitability and viable business models. Davies warned that UK lenders could be at a competitive disadvantage to their EU rivals if the PRA implements Basel global capital rules in a way that is detrimental to their competitiveness.
Oracle says it is open banking ready to cater to Canadian banks
Reuters
23-09-19 20:51
Oracle is ready to provide tools for Canadian banks to meet their open banking needs, according to Sonny Singh, executive vice president of Oracle Financial Services. Open banking allows consumers and businesses to transfer their financial data securely between financial institutions and third-party service providers. Singh said Oracle’s suite of financial products, which include purpose-built products for risk management and compliance, could help banks meet open banking requirements. While open banking is not yet available in Canada, it is already in use in other countries including Australia and the UK.
Indiana US Senate candidate files suit challenging law that may keep him off the ballot
Associated Press
23-09-19 23:27
John Rust, an egg farmer seeking the Republican nomination for Indiana's open U.S. Senate seat in 2024, has filed a lawsuit challenging a state law that could prevent him from getting on the ballot. The law requires a candidate's past two primary elections to be cast with the party they are affiliated with or approved by a county party chair. Rust voted as a Republican in the 2016 primary but as a Democrat in the 2012 primary, and did not vote in the 2020 Republican primary. Rust argues that the law is "unconstitutionally vague and overly broad." U.S. Rep. Jim Banks, who has received the endorsement of the Indiana Republican Party, is also seeking the GOP nomination.
UBS may issue contingent convertible bonds (CoCos) in a test for Switzerland’s reputation with bondholders. The country’s reputation was damaged in March after the takeover of Credit Suisse, resulting in a total loss for bondholders. However, UBS hybrid debt prices have recovered since the deal, with investors valuing them with a lower yield than equivalent securities issued by BNP Paribas. This suggests that investors are not demanding a premium to compensate for the uncertainty of how they would be treated in a future crisis. A successful return for UBS would help restore the reputation of the AT1 market, drawing more investors to the asset class and enabling other banks to issue debt at lower cost. However, if bond markets do not punish bad behaviour, regulators will have less incentive to play by the book in the future.
Swiss National Bank to expand liquidity provision to banks - Vice-Chairman
Reuters
23-09-21 08:38
The Swiss National Bank (SNB) has announced that it will provide funds secured against mortgages to all commercial banks in an effort to expand liquidity provision to the sector. Previously, this support was only available to systemically important banks. To take advantage of this support, lenders must be able to transfer the mortgages to the central bank. The SNB expects banks involved in mortgage lending to participate in this initiative, in order to provide broad-based support to financial stability and the resilience of the banking system.
Pulp’s Nick Banks: ‘Did Britpop make me rich? Well, I just bought a new mower’
Telegraph
23-09-21 12:56
Nick Banks, drummer for the band Pulp, has released a memoir titled So It Started There: From Punk to Pulp. The book recounts the band's rise to fame during the Britpop era, as well as Banks' personal experiences as a member of the band. It covers their early years of struggling for success, their breakthrough moment with the release of the album Different Class, and their eventual hiatus in 2002. The memoir also touches on their recent reunion and the tragic death of guitarist Steve Mackey.
Banks reflects on the band’s reunion shows, stating that he was unsure how the audience would respond, given that they are now 25 years older than they were in their prime. However, he was pleased to see a mix of young fans and those who had grown up with Pulp. Banks also discusses the challenges of performing without Mackey, who was a driving force in the band and set the agenda. He describes Mackey’s passing as a tragedy and a loss for the band.
In addition to his time with Pulp, Banks discusses his personal life and other interests. He talks about his family’s pottery business, which was eventually closed due to the COVID-19 pandemic, and his life in Sheffield. Banks also reflects on the financial success of being in Pulp, stating that while he is comfortable, he is not excessively wealthy. Overall, the memoir provides a behind-the-scenes look at the band and its impact on the Britpop era.
Banks cut mortgage costs as Bank of England holds rate at 5.25pc
Telegraph
23-09-21 12:41
Major lenders in the UK have reduced mortgage costs following the Bank of England's decision to hold interest rates at 5.25%. NatWest has cut its two-year fixed rate mortgage from 6.12% to 5.93% and five-year deals from 5.35% to 5.24%. TSB has also announced reductions in their fixed rate deals. The cuts in mortgage rates indicate that lenders are engaged in a "growing rate war", according to financial advisor Shaw Financial Services. Banks have also increased saving rates in response to calls to share the benefits of higher interest rates with consumers.
Pulp’s Nick Banks: ‘Did Britpop make me rich? Well, I just bought a new mower’
Telegraph
23-09-21 12:56
Nick Banks, drummer for the band Pulp, has released a memoir titled So It Started There: From Punk to Pulp. The book recounts the band's rise to fame during the Britpop era, as well as Banks' personal experiences as a member of the band. It covers their early years of struggling for success, their breakthrough moment with the release of the album Different Class, and their eventual hiatus in 2002. The memoir also touches on their recent reunion and the tragic death of guitarist Steve Mackey.
Banks reflects on the band’s reunion shows, stating that he was unsure how the audience would respond, given that they are now 25 years older than they were in their prime. However, he was pleased to see a mix of young fans and those who had grown up with Pulp. Banks also discusses the challenges of performing without Mackey, who was a driving force in the band and set the agenda. He describes Mackey’s passing as a tragedy and a loss for the band.
In addition to his time with Pulp, Banks discusses his personal life and other interests. He talks about his family’s pottery business, which was eventually closed due to the COVID-19 pandemic, and his life in Sheffield. Banks also reflects on the financial success of being in Pulp, stating that while he is comfortable, he is not excessively wealthy. Overall, the memoir provides a behind-the-scenes look at the band and its impact on the Britpop era.
Banks cut mortgage costs as Bank of England holds rate at 5.25pc
Telegraph
23-09-21 12:41
Major lenders in the UK have reduced mortgage costs following the Bank of England's decision to hold interest rates at 5.25%. NatWest has cut its two-year fixed rate mortgage from 6.12% to 5.93% and five-year deals from 5.35% to 5.24%. TSB has also announced reductions in their fixed rate deals. The cuts in mortgage rates indicate that lenders are engaged in a "growing rate war", according to financial advisor Shaw Financial Services. Banks have also increased saving rates in response to calls to share the benefits of higher interest rates with consumers.
Trump says he always had autoworkers' backs. Union leaders say his first-term record shows otherwise
The Independent
23-09-21 17:27
Former President Donald Trump plans to visit Detroit next week to speak to striking autoworkers in an attempt to position himself as an ally of blue-collar workers. However, union leaders have criticized Trump's record in the White House, stating that his first term was not worker-friendly. Union leaders point to unfavorable rulings from the National Labor Relations Board and the U.S. Supreme Court, as well as unfulfilled promises of automotive jobs. The labor board reversed several key Obama-era rulings that made it easier for small unions to organize and provided protection against anti-union measures for employees. The Supreme Court has also made several rulings against unions. Despite Trump's claims of economic gains and policies that benefited workers, job growth figures in the auto industry during his presidency contradict his claims. Union leaders argue that Trump's appointments to the labor board and the Supreme Court show a preference for business and property owners over workers. Trump hopes to win back the support of union-friendly states like Michigan in the 2024 election.
Trump says he always had autoworkers’ backs. Union leaders say his first-term record shows otherwise
Associated Press
23-09-21 17:27
Former President Donald Trump plans to visit striking autoworkers in Detroit next week and speak directly to former and current union members, in an attempt to position himself as an ally of blue-collar workers. However, union leaders have repeatedly rebuffed Trump, saying that his first term was far from worker-friendly and citing unfavorable rulings from the labor board and the US Supreme Court, as well as unfulfilled promises of automotive jobs. Union leaders also point to unfavorable Supreme Court rulings under a conservative majority that grew during Trump’s term. They highlight how the Trump-era board reversed a decision holding employers responsible for labor violations by subcontractors or franchisees, and gave a boost to companies that use contract labor, making organizing harder. Job growth figures in the auto industry during Trump’s presidency contradict his claim that the industry thrived under his watch. The total number of auto manufacturing jobs in Michigan stayed even during Trump’s presidency, and in Ohio the number of auto manufacturing jobs grew by fewer than 2,000.
How interest rates announcement will affect mortgages and savings
The Independent
23-09-21 17:06
The Bank of England has decided to freeze interest rates at 5.25% after 14 consecutive rate hikes. This decision could have significant consequences for mortgage holders, as borrowing costs may now stabilise. If this is the end of the cycle of interest rate rises, property experts predict that mortgage prices may decrease, benefiting homeowners. Around 800,000 fixed-rate mortgage deals are set to end in H2 2023, and 1.6 million are due to end in 2024. Consequently, any decrease in prices would be welcomed by mortgage holders. Major lenders have already started to reduce rates in response to the Bank's decision. Nationwide is reducing rates across most of its fixed-rate mortgage products by up to 0.31 percentage points, and Natwest has cut its two-year fixed mortgage from 6.12% to 5.93%. However, estate agents have warned that a material improvement in mortgage affordability requires the prospect of a cut in interest rates, and this looks unlikely in the near future.
Eight big banks must face US cities' bond collusion claims
Reuters
23-09-21 16:51
A US judge has ruled that American cities can pursue class-action claims against eight banks for driving up interest rates on municipal bonds. The cities of Baltimore, Philadelphia and San Diego have accused the banks of conspiring to raise rates on over 12,000 variable-rate demand obligations from 2008 to 2016, reducing available funding for schools, hospitals, water and power supplies and transportation. The banks involved in the case are Bank of America, Barclays, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Royal Bank of Canada and Wells Fargo.
India's market regulator relaxes rules for mandatory bond market borrowing
Reuters
23-09-21 16:14
India's market regulator, the Securities and Exchange Board of India (SEBI), has announced that it will remove penalties for companies that fail to meet a mandatory bond market borrowing quota. The move comes after feedback from the market showed that borrowing from banks remains more cost effective than raising funds through bond issues. SEBI will now grant more flexibility to large companies for incremental borrowing via bonds, and will provide incentives to encourage companies to come to the bond market for their borrowing needs. The regulator has also increased the eligibility criteria for companies to qualify for mandatory borrowing from the bond market.
Not much exciting about Aussie banks as high costs pressure earnings - Macquarie
Reuters
23-09-22 04:09
Macquarie analysts have downgraded their rating of the Australian banking sector to "underweight" due to rising wage costs and increased investment spending. The analysts noted that more than 70% of the banks' expenses are related to personnel, and with high living costs impacting borrowers' capacity to repay loans, the industry's weak track record of managing expenses suggests that cost bases will remain under pressure. Macquarie expects banks' expenses to grow by around 1% to 7% in fiscal 2023 through to fiscal 2025, with regional banks such as Bendigo and Adelaide Bank and Bank of Queensland being particularly impacted.
