Central bank cryptocurrencies pose risk to global financial stability
In a report, the Bank of International Settlements (BIS) has warned that central bank cryptocurrencies could cause deposits to flow out of traditional banks and endanger the stability of the financial system at the next crash. BIS warned that moving into issuing digital currencies would move central banks like the Federal Reserve and the Bank of England into “uncharted territory”, which could lead to “digital runs” on banks in times of stress. Jacqueline Loh, chair of the markets committee at the BIS, said: “A general purpose central bank digital currency could impact bank deposits, a major source of funding for commercial banks, with implications for financial stability.”
Ring-fencing not the way
The Standard's James Ashton argues that ring-fencing is not the way to improve the UK banking industry. Plans here go further in reform than in any other jurisdiction, he says, just when the UK financial services industry faces weakening because of Brexit, suggesting a better strategy might lay in syndicated lending - a "bread-and-butter" activity that can no longer use retail deposits to fund deals. "What a shame that regulators do not have a reverse gear," he concludes.
Bankers need higher professional standards to regain trust
The FCA has said that "clear accountability" for individuals is a key part of improving banking culture. The watchdog published a 119-page set of essays on banking culture yesterday in an attempt to "stimulate debate" on the issue. Separately, Brendan Barber, deputy chairman of the Banking Standards Board, has challenged firms to strengthen professionalism. Compliance for senior managers is not enough, he says.
HSBC app launch to centralise account information
HSBC is to launch Connected Money, an app that centralises customers’ account information, as it seeks to take advantage of new regulations intended to increase competition.
Barclays pays top managers over £20m in shares
Barclays has paid its top managers just over £20m in shares, largely to compensate several senior executives for payouts they forfeited after leaving JPMorgan Chase.
Gousto raises £28m
Hargreave Hale, Angel CoFund, MMC Ventures and BGF Ventures have provided funding of £28.5m to online meal kit group Gousto, as the firm aims to "help UK families serve 400m nutritious home-cooked meals" by 2025.
Gore Street Capital ready for listing
Gore Street Capital is to list on the London market, seeking to raise £100m from the initial public offering of its Gore Street Energy Storage Fund this month.
Solomon likely to succeed Blankfein
Harvey Schwartz has decided to step down next month, leaving David Solomon as sole president and chief operating officer of Goldman Sachs, the bank has announced. This leaves Mr Solomon as the clear frontrunner to eventually succeed Lloyd Blankfein following reports last week of the latter’s departure before the end of the year.
HNA’s Hong Kong affiliate issues profit warning
Hong Kong International Construction Investment, a subsidiary of HNA Group, has issued a profit warning ahead of its full-year financial results being released.
Legal and General prepares for full takeover of Cala
Legal and General is preparing to announce the takeover of Cala, giving the insurance firm full control of the Scottish housebuilder. It will pay about £315m to acquire the 52% of Cala Homes it does not already own, reports suggest.
UK, Chinese and French merger and acquisitions boutique stakes bought by Natixis
Natixis, majority-owned by French retail banking group BPCE, has acquired stakes in three merger and acquisitions boutiques in the UK, China and France as the French investment bank builds on its "multi-boutique" approach to advising firms on deals. Marc Vincent, head of corporate and investment banking at Natixis, commented: "We feel merger and acquisitions is a business where the key asset is talent and the idea was to duplicate the strategy that has been more or less implemented in our asset management business, which is to have a multi-boutique strategy."
Aviva plan to cancel £450m preference shares criticised
Nationwide has said it will not be copying Aviva's decision to cancel preference shares worth £450m, after Ecclesiastical Insurance Office criticised the move. Sterling-denominated preference shares have seen around £700m wiped off their value since Aviva said it was considering cancelling its three outstanding issues.
Insurers pose risk to pension reform, body warns
The Personal Finance Society has warned that many of its 37,000 members are finding it difficult to secure the insurance needed to offer pension transfer advice.
GKN rejects new hostile £8.1bn Melrose bid
Engineering giant GKN has rejected a new bid from turnaround specialist Melrose, saying the offer continues to "fundamentally undervalue" the firm. Melrose had issued a "final" cash and shares offer for GKN, which it said was worth 467p a share, valuing the company at £8.1bn.
MEDIA AND ENTERTAINMENT
BBC must increase efforts against fake news
Culture Secretary Matt Hancock said yesterday that the BBC must do more to keep out fake news in the name of objectivity. A spokesman for the corporation commented: “The Secretary of State said that the BBC is our best bulwark against fake news. No public service broadcaster is doing more to tackle the scourge of fake news. While guests will sometimes have uncomfortable views our job is to challenge and scrutinise them.”
Hedge funds amass big bets against world’s leading advertisers
Hedge funds including Marshall Wace, Lone Pine and Maverick Capital, have stacked over $3bn against big advertisers as the industry endures slow growth and disruption.
Low-deposit mortgages make a comeback
New figures have revealed that mortgage products allowing applicants to put down a deposit of just 5% have become more popular in the past year. Research from Moneyfacts showed that 307 such deals are now on the market in the UK, up from 253 last year. The increased number of deals at this loan-to-value level should improve competition, said Charlotte Nelson of Moneyfacts.
Developers focus on millennials
Institutional investors including pension funds are increasingly developing blocks of professionally-run rental homes, raising concerns that premium apartments for affluent millennials are taking priority over family homes.
Renationalisation would harm investment, CBI chief warns
Labour’s plans to renationalise large parts of the economy would "seriously harm" the UK's reputation as a place to invest, the CBI has warned. The group’s president, Paul Drechsler, told business leaders that such calls were driven by ideology, rather than facts. He said private investment had helped create jobs and improve the efficiency of utility companies since they were sold off during the 1980s, and argued that progress could be undone if they were taken back into state control.
EU seeks to have pre-Brexit capital market plan in place
The European Union has increased its efforts to create a more unified and efficient capital market by 2019, when it will have to deal with the loss of its biggest financial centre, in Britain. European Commission Vice President Valdis Dombrovskis told a news conference: “By the time Brexit happens, the preconditions for a true single market for capital need to be in place”.