Bank of England to consider digital currency
The Bank of England and the Treasury are setting up a taskforce to explore the possibility of a central bank digital currency. The taskforce will be jointly led by the Bank's deputy governor for financial stability, Sir Jon Cunliffe, and the Treasury's director general of financial services, Katharine Braddick. The taskforce will consider the risks and opportunities involved in creating a digital currency that would exist alongside cash and bank deposits, rather than replacing them. With many of the world's central banks looking into the possibility of creating such a currency, officials said the UK taskforce will monitor international developments, "to ensure the UK remains at the forefront of global innovation". Meanwhile, analysis suggests the UK is well-placed to adopt digital currencies, with a new report placing the UK fifth in the world when it comes to preparing for the adoption of a central digital currency.
Mortgage scheme launches
The new Government-backed mortgage scheme has officially launched, with Lloyds, Santander, Barclays, HSBC UK and NatWest among the first to offer deals under the initiative. Housing Secretary Robert Jenrick said the mortgage guarantee scheme “will give providers the confidence to lend and help families and young people get on the property ladder without the prohibitive burden of a large deposit.” Michelle Andrews of HSBC said: “After such a turbulent year it is great that this scheme will make a real difference in enabling first-time buyers who didn’t think they would have a chance of getting a mortgage and home movers to get the keys to their new home.”
First-time buyers have cheaper options
First-time buyers will find cheaper mortgages by going to lenders outside of the Government's mortgage guarantee scheme, the Telegraph reports. Some of the best deals are being offered by smaller lenders who have re-entered the market independent of the Government scheme. Coventry Building Society offers the cheapest deal on a five-year fixed 95% mortgage, at a rate of 3.89% and with a fee of £999. Leeds Building Society and Yorkshire Building Society both offer five-year fixed deals at a rate of 3.99%, with product fees of £995 and £999 respectively. This compares with a five-year fixed rate of 4% with Halifax, the cheapest deal available with a £995 product fee, or NatWest's five-year fixed rate of 4.04% with no product fee, under the new scheme.
Stride flags concern over account access
Mel Stride, head of the Treasury Select Committee, has written to several banks over concerns that small businesses are struggling to open accounts, asking Lloyds, Metro Bank, Santander, HSBC and Barclays to explain their policies on business accounts. Mr Stride pointed to reports that firms had faced difficulties opening new business current accounts and asked banks to note whether they had changed their criteria for opening new accounts since coronavirus lockdowns first came into force.
HSBC rolls out HQ hot-desking
HSBC chief executive Noel Quinn has said bankers working in its Canary Wharf headquarters will no longer occupy private offices, as he revealed plans to decrease the lender’s office space by 40%. Mr Quinn explained: “We don’t have a designated desk. You turn up and grab one,” noting that in the past “offices were empty half the time because we were travelling around the world.”
Bank workers in sensitivity training as debts called in
With banks in the UK preparing to call in loans issued during the coronavirus pandemic, staff at HSBC, NatWest and Metro Bank are believed to be receiving training in how to “demonstrate empathy” when collecting debts. Stephen Jones, former chief executive of UK Finance, last year noted: “The banking industry is the collection agency and, unfortunately, I fear we will end up being the bad guys again when it turns out that money can’t be repaid.”
Starling Bank confirm Goldman Sachs investment
Digital lender Starling Bank’s latest funding round has been extended, with Goldman Sachs announcing a further £50m investment.
Siris eyes Equiniti
American private equity firm Siris Capital has approached British financial services outsourcing group Equiniti with a £624.3m bid. It marks the fifth time that Siris Capital has approached Equiniti, which confirmed that it had received a "highly conditional, non-binding proposal". It urged shareholders to take no action while its board scrutinised the offer with advisers.
Banks underreporting risky assets, says ECB
The European Central Bank has reported that large euro zone banks have been underreporting risky assets by €275bn, following a five-year review. Andrea Enria, chair of the ECB's supervisory board, said in a press release: “Banks are following through to correct deficiencies and fully comply with the requirements," while the bank noted that "further improvement" was still needed in some areas.
Deutsche Bank board member faces insider trading probe
Germany’s financial regulator BaFin has reportedly filed a criminal complaint against Deutsche Bank board member Alexander Schutz over alleged insider trading. BaFin has filed a complaint over suspicions Mr Schutz used insider information when trading Wirecard shares in 2019 and 2020, with prosecutors saying they are awaiting further details.
Fine for ABN AMRO amid money laundering claims
- AMRO has reached a settlement with prosecutors over alleged money laundering, with the bank to pay €480m. The fine “reflects that as a result of the serious shortcomings, certain clients that engaged in... criminal activities were able to abuse bank accounts and other services of ABN AMRO for a longer period of time,” according to the Dutch Public Prosecution Service.
Danske CEO announces resignation
Danske Bank chief executive Chris Vogelzang, hired to help the lender recover from a money laundering scandal, has resigned. This follows an announcement by the Dutch prosecution service that three former board members at ABN Amro, where Mr Vogelzang used to work, are to be investigated. Jyske Bank analyst Anders Haulund Vollesen commented: "It is super unfortunate that it's once again money laundering that this is related to. It's almost embarrassing.”
ISS questions BPER pay plan
ISS has criticised an increase in fixed pay for the chief executive of Italy's BPER Banca, urging investors to vote against an increase in Alessandro Vandelli’s base salary to €1.2m from €850,000. Glass Lewis also criticised the pay hike but stopped short of suggesting a rejection. Meanwhile, ISS and Glass Lewis have also spoken out over changes in Intesa Sanpaolo's long-term incentive plan.
US lenders in AI rollout
US banks have begun deploying camera software to analyse customer preferences, monitor workers and carry out other tasks. JPMorgan confirmed it is "conducting a small test of video analytic technology, while City National Bank said: “We're getting off to an early start on technology already used in other parts of the world and that is rapidly coming to the American banking network."
Barclays pulls out of jail funding deal
Barclays has pulled out of a deal to help fund two new jails in Alabama following a backlash from activists and investors who wanted clarity on why it had decided to underwrite a deal by private prison operator CoreCivic just two years after it vowed to stop financing America's for-profit prison sector.
Treasury offers LCF compensation
The Government has said it will reimburse many London Capital & Finance (LCF) savers following its 2019 collapse. More than 11,600 savers were hit when LCF fell into administration amid accusations of fraud, with victims owed £237m. The Financial Services Compensation Scheme said LCF did not fall under its remit, prompting the Treasury to step in with a £120m compensation fund. This should give around 97% of LCF investors the vast majority of their money back. It is noted that LCF's administrators are trying to sue several individuals to get more of savers' money back, while the Serious Fraud Office is pursuing a criminal investigation over activity at LCF ahead of its collapse.
FCA hires LGIM director
Sacha Sadan is joining the Financial Conduct Authority (FCA) as director of Environment, Social and Governance. Mr Sadan, who will lead the development of the regulator’s sustainable finance policy, joins from Legal and General Investment Management where he was director of investment stewardship. The FCA has also announced that Ian Alderton will serve as its permanent chief information officer, having joined the City watchdog on a temporary basis at the start of the year, while Ian Phoenix from NHS Digital will join as the director of intelligence and digital.
BAE Systems faces investor revolt over ‘golden handcuffs’ deal
Defence contractor BAE Systems may be set to face a shareholder revolt over a £2m “golden handcuffs” award to chief executive Charles Woodburn. The payout saw Mr Woodburn given a share package after an attempt to poach him by mining group Rio Tinto, with the award payable if he stays for three years. Proxy voting adviser Glass Lewis is advising shareholders to vote against the company’s remuneration report, saying it regarded high fixed-pay rises “with scepticism” and believed that discretionary payments “should be subject to additional performance criteria”.
MEDIA AND ENTERTAINMENT
Telecom firms get OK to extend masts
The Government has announced that telecoms firms will soon be able to construct taller mobile phone masts in countryside areas without securing planning permission from the local council, as part of efforts to improve mobile connectivity and enable the expansion of 5G coverage. The change will allow existing towers to be extended by 5m to 30m.
House prices set for ‘summer bounce’
House prices are in line for a summer bounce following the extension of the stamp duty holiday announced by the Chancellor in his March Budget, according to analysis from home-moving services firm reallymoving. The reallymoving House Price Forecast March 2021 suggests that prices were heading downwards before the extension of property tax relief was confirmed. The firm said conveyancing quote volumes began to accelerate around March 3 - the day of the Budget - and were 51% above normal levels by mid-March and over 100% higher than normal levels by the start of April. With a 2.8% increase in the average value of deals being agreed, reallymoving expects this to be reflected in Land Registry Price Paid data in June.
Footfall jumps as stores reopen
Figures from Springboard show that the reopening of non-essential stores in England and Wales last week delivered a surge in shoppers to the high street, with footfall across all UK shopping destinations up 87.8% week-on-week. Visitor numbers across high streets, retail parks and shopping centres was up 330% when compared to the same week a year ago. Diane Wehrle, insights director at Springboard, said: "These results provide concrete evidence of the desire of shoppers to return to bricks and mortar stores and destinations”, adding: “The key issue for retail destinations will be whether this momentum can be sustained."
JPMorgan financing ESL
Further details have been released in regard to the proposed European Super League (ESL), a European football league where the 12 founding clubs include Premier League sides Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham. The founding clubs will share of a £3bn grant provided by JPMorgan, with the US investment bank financing the project. The funding provided by JPMorgan is secured against expected TV broadcasting rights.
German-British businesses plan increased UK investment
A new survey from the German-British Chamber of Commerce shows that more than a third of German-British businesses plan to increase their investment in the UK over the medium term, a complete turnaround from six months ago. The survey found that 35% of firms think they will raise investment, up from 5% in the autumn. While six months ago 20% of firms had planned to decrease investment, that figure has now dropped to 10%. In line with the planned increase in investment, 44% of companies expect to hire new employees – a significant increase on the 11% who planned to do so six months ago.