BANKING
BoE: Digital currencies could undermine banks
The Bank of England has warned that a major shift to digital currencies could risk undermining Britain's banks, potentially forcing regulators to step in. “Commercial banks have never faced a large-scale, system-wide displacement of the deposits they create,” the Bank of England said. “Uncertainty around demand for new forms of digital money is why the Bank is considering the need for limits to manage the transition period as they emerge.” The Bank has published a discussion paper on the topic of both "stablecoins" and Central Bank Digital Currencies. On a separate note, a BoE deputy Sir Jon Cunliffe said a digital currency could not only reduce costs but could also be programmed with smart contracts limiting what the money could be used for.
City urges global approach to social principles and standards
Writing in City AM, Catherine McGuinness, policy chair at the City of London Corporation, reveals that the International Regulatory Strategy Group (IRSG), which is co-sponsored by the City of London Corporation and TheCityUK, has launched a report calling for a global approach to social principles and standards to deliver better outcomes and make markets more resilient. This follows an earlier report from the IRSG sent to G7 ministers making suggestions in relation to the global regulatory landscape, sustainable finance and digital agenda. Welcoming G7 moves towards mandatory climate related financial disclosures and tackling illicit finance and environmental crimes, McGuinness goes on to urge international banks and financial institutions could to "act as a catalyst of change by applying consistent standards across all jurisdictions they operate in to raise social standards."
Central banks' net zero focus raises mission creep concerns
The FT's John Plender fears measures central banks are taking to recognise the impact of climate change could distract them from their core objectives relating to inflation and employment.
PRIVATE EQUITY
Carlyle predicts surge in post-pandemic deals in Japan
Kazuhiro Yamad, head of Carlyle’s Japan business, predicts a surge in private equity deals as the pandemic accelerates asset sales and purchases of new technology among Japanese companies.
Blackstone to take QTS Realty Trust private
Blackstone Group has announced that it will take data center operator QTS Realty Trust Inc private in an all-cash deal worth about $10bn.
INTERNATIONAL
City asset managers to decide on first Greek bank raise since crisis
Somerset Capital Management and Odey Capital Management will play a part in deciding whether the first capital raise by a Greek bank since the financial crisis goes ahead. Both are significant shareholders in Alpha Services and Holdings - previously known as Alpha Bank - which is looking to raise €800m to fund growth plans. Key shareholder advisory group ISS has said support for the proposal is “not warranted.”
JPMorgan launches new growth equity arm
JPMorgan Chase & Co has launched a new asset management business called J.P. Morgan Private Capital designed to give institutional and high-net-worth clients opportunities to invest in and lend to young, fast-growing companies.
EBA plans to cut red tape for small lenders
The European Banking Authority (EBA) has laid out plans to simplify and automate reporting requirements for small lenders in a move that could save them millions of euros.
Goldman Sachs partners with Visa
Goldman Sachs has partnered with Visa enabling the bank's commercial and corporate banking clients to use corporate payments network Visa B2B Connect.
Australia’s NAB faces money laundering probe
Australia's Austrac financial crimes regulator is investigating claims that National Australia Bank violated money laundering and counter-terrorism financing laws.
Austria - housing loans increasingly risky
In its bi-annual Financial Stability Report, Austria's central bank warned that mortgage lending warrants closer scrutiny amid a rise in households' debt-to-income ratio.
AVIATION
KKR to buy Atlantic Aviation
Macquarie Infrastructure Corp plans to sell its private aviation services network Atlantic Aviation to KKR for $4.48bn.
CONSTRUCTION
SoftBank-backed Katerra files for bankruptcy
US construction start-up Katerra, which is backed by SoftBank’s Vision Fund, has filed for bankruptcy with more than $1bn in liabilities.
FINANCIAL SERVICES
The City will remain "competitive and dynamic" – Sunak
In a call with bank bosses yesterday, the Chancellor Rishi Sunak vowed to protect the financial services industry against attempts by Brussels to steal its crown. Boris Johnson and the Governor of the Bank of England were also on the call which was described as upbeat by one person present. The call focused on the competitiveness of UK financial services post-Brexit as well as the country's economic recovery following the pandemic. The FT reports that the prime minister called for improved links between the City and Downing Street with a spokesman later stating that the Government would “support innovation and the competitiveness of the UK financial services sector” as it adapts to life outside the single market.
Britain becomes first major country to force pension schemes to go green
Britain is the first major economy to push forward with plans to force pension schemes to go green. New laws will require providers to assess and report on how climate change is going to affect their investments. The move will come into effect in October this year, making Britain the first major economy to put the move in law. Minister for Pensions Guy Opperman commented: “These world-leading regulations we outline today ensure these risks are accounted for, and are done so with total transparency.”
Investment managers failed to consider pandemic risks
In a piece for the Times, David Wighton complains that the investment management industry failed in its approach to environmental, social and governance risks by underestimating the threat of a devastating pandemic. “No investment manager of any size seems to have taken pandemic risk seriously before the outbreak,” he says, adding that most firms say nothing about learning lessons from the pandemic in their stewardship reports.
FundingSecure investors call for inquiry into P2P regulation
Investors who have millions of pounds tied up in failed peer-to-peer site FundingSecure are demanding a public inquiry into what they have called “multiple failures” of regulation of the industry by the Financial Conduct Authority.
HEALTHCARE
FDA approves Biogen Alzheimer’s drug
The US Food and Drug Administration has approved aducanumab, an Alzheimer’s drug from Biogen which the company says slows the progression of the disease.
NetScientific wins AstraZeneca licensing deal
Aim-quoted life sciences company NetScientific has struck an exclusive licensing agreement with AstraZeneca to sell a COVID-19 test.
LEISURE & HOSPITALITY
Retail and hospitality leaders warn of rent debt crisis
Retail and hospitality leaders have urged the Government to tackle the £5bn of rent debt owed to landlords "as a matter of urgency”, warning of widespread business failures without some form of resolution. Speaking to a Treasury select committee inquiry into the economic impact of the pandemic, Kate Nicholls, chief executive of UK Hospitality, said that one in five hospitality businesses were warning that without a resolution, there would be a wave of insolvencies and site closures on July 1 when the rent moratoriums end.
Caffè Nero's future in doubt
Caffè Nero's auditors have raised a red flag over the company's future due to uncertainty around the outcome of a recent restructuring and when trading would return to pre-pandemic levels. Despite a recent increase in sales, any further Covid restrictions could put the chain's future in doubt, bosses said.
REAL ESTATE
House price rise revealed in Halifax index
The latest Halifax house price index reveals that prices increased 9.5% in May - their fastest pace since June 2014. Russell Galley, managing director at the firm, commented: “Heading into the traditionally busy summer period, market activity continues to be boosted by the Government’s stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June’s deadline." He continued: “The current strength in house prices also points to a deeper and long-lasting change as buyer preferences shift in anticipation of new, post-pandemic lifestyles.”
RETAIL
Retailers struggle to find enough staff
Retail is the latest sector to see a staffing shortage following a hiring crisis in hospitality that has slowed the recovery of pubs, bars and restaurants. One in three retail leaders is struggling to fill roles with fashion firms among those hit the hardest. Over 40% of smaller retailers have said that Brexit has made hiring harder, compared to 35% of larger retailers.
SPORT
CVC plans to bring men and women’s tennis together
Private equity firm CVC is preparing to take a stake in a new business combining the men’s and women’s professional tennis tours. CVC is said to be targeting approval from the ATP and WTA boards for the investment in Tennis One.
ECONOMY
UK retailers report strong May
The British Retail Consortium said on Tuesday that total sales among its members last month were 10.0% higher last month than in May two years ago. Helen Dickinson, chief executive of the BRC, said: "Retail sales were buoyant in May thanks to the reopening of hospitality, coupled with the afterglow of non-essential retail's own return." Separately, Barclaycard said consumer spending was 7.6% higher than in May two years ago. Spending at restaurants last month was 54% below its level two years ago, while spending at pubs and bars was 19% lower. However, this was an improvement from April when sales were down 74% and 67% respectively.