Category Deposits

Summary of responses to the ECB’s second public consultation on developing a euro unsecured overnight interest rate

The European Central Bank (ECB) has published a summary of the responses it received to its second consultation on developing a euro unsecured overnight interest rate. The consultation follows the ECB’s decision to develop a daily euro unsecured overnight interest rate based on data already available to the Eurosystem. The rate is due to be finalised before 2020 and will complement […]

FCA consults on consumer contract variations

FCA is consulting on guidance for firms setting out what factors under the Consumer Rights Act they should take into account when they are drafting and reviewing variation terms. The draft guidance sets out a list of things FCA says firms should take into account, which would include: how valid the reason for variation is […]

High Court sanctions Lloyd’s ring-fencing scheme

The High Court has sanctioned an application by Lloyds Bank PLC, Bank of Scotland PLC and Lloyds Bank Corporate Markets PLC for a ring-fencing scheme. This is the second scheme to come before the courts and be approved, after Barclays Bank plc and Woolwich Plan Managers’ was approved in March. RBS’ scheme has been sanctioned by […]

Up next from FCA

FCA’s latest Policy Development Update promises over the next couple of months the overdue feedback on fees and levies policy proposals with consultation on rates proposals.  No dates are set for any other key papers.

Bank of England announces consolidation of three UK Payment System Operators

The Bank of England has announced that the New Payment System Operator Limited (NPSO) has taken over responsibility for the Bacs and Faster Payment retail payment systems.  This consolidation is the result of work by both the Bank of England and the Payment Systems Regulator. The objective is to develop the capability and capacity of […]

FCA publishes second 5 Conduct Questions report

The FCA has published its second annual report setting out responses from wholesale banking firms to the FCA’s conduct question set.  The FCA notes that the second report indicates progress has been made from the time when 5 Conduct Questions were first introduced, in 2015. The FCA indicates that they intend to extend the 5 […]

Treasury responds on cheque imaging

Treasury has published its response to its consultation on cheque imaging. It received 15 responses, and engaged with 4 other institutions. All agreed that a copy of a cheque should be made available to customers on request, and most agreed that no cheque user should be left out of pocket as a result of any […]

FCA publishes PAD linked services list

FCA has published the final list of the most representative services linked to a payment account and subject to a fee for the purposes of the Payment Accounts Regulations. Firms will have to use the terminology from 31 October. There are 15 defined services: maintaining the account arranged overdraft unarranged overdraft refusing a payment due […]

PRA publishes model risk management principles for stress testing

PRA has published a policy and supervisory statement setting out its expectation of the model risk management practices firms should adopt when using stress test models. It expects firms to apply the principles proportionately, with the larger firms applying them in full. The principles require banks: to have an established definition of a model, and […]

Claims Management regulations published for consultation

As part of the proposed process of transferring the regulation of Claims Management Companies to the FCA, HM Treasury is consulting on draft regulations  that will form part of a final statutory instrument creating a new framework of regulation for Claims Management Companies (CMCs). The draft regulations set out the proposed permissions that CMCs will […]

UK and US announce working group creation

HM Treasury and the US Treasury Department have announced the formation of a Financial Regulatory Working Group, to formalise engagement on bilateral regulatory cooperation. The group is scheduled to meet twice a year

RBS to pay £3.5bn to pension scheme ahead of ring-fencing

Royal Bank of Scotland (RBS) has agreed to pay contributions of up to £3.5 billion to its pension scheme in readiness for UK ring-fencing legislation taking effect from 1 January 2026. RBS has agreed a  Memorandum of Understanding with the trustee of the Main Scheme of the RBS Group Pension Fund under which it will […]

BEIS publishes Green Paper on modernising consumer markets

The Department for Business, Energy and Industrial Strategy is consulting on proposals which, among other issues, seek to to improve the consumer experience in regulated markets for utilities, telecommunications and financial services and to ensure consumers buying and selling online benefit from new technology and business models, and have appropriate protection for their personal data. […]

ESAs report on key risks for H2 2017

The Joint Committee of the European Supervisory Authorities has published its report for the second half of 2017.  This report highlights the following potential sources of instability: repricing of risk premia uncertainties regarding the terms of Britain’s exit from the EU; cyber attacks; and climate change. The report urges firms and supervisory authorities to seek […]

FCA and PRA publish business plans

The FCA and the PRA have both published their business plans for 2018/2019. The FCA’s business plan shines a spotlight on consumer protection, including in relation to pension products and high-cost credit, as an area of concern for the forthcoming year, as well as ongoing programmes such as Brexit, and firms’ culture and governance (including […]

FCA and PRA consult on 2018/2019 regulated fee and levy rate proposals

The FCA and PRA have, separately, published consultation papers on regulated fees and levies for 2018/19. In its consultation paper, the FCA sets out the proposed 2018/19 regulatory fees and levies for itself, the Financial Ombudsman Service, the Money Advice Service, the Pension Wise service and HM Treasury’s illegal money lending expenses.  The FCA also […]

ECB PUBLISHES ANNUAL REPORT FOR 2017

The European Central Bank (ECB) has published its annual report for 2017. The annual report sets out the ECB’s activities in the economic and financial environment of 2017. Amongst other things, the report focuses on: the economic recovery in the euro area; the ECB’s monetary policy decisions, which lead to the ECB recalibrating its asset […]

PRA and BoE’s approach to authorisation and supervision in preparation for Brexit

The Bank of England (BoE) has published a press release setting out its regulatory approach to preparations for Brexit, including its approach to the authorisation and supervision of international banks, insurers and central counterparties (CCP). The update follows the agreement between the UK and EU27 that there should be an implementation period until the end of 2020 as […]

ECB Annual Report on supervisory activities

The European Central Bank (ECB) has published its Annual Report on its supervisory activities for 2017. The Annual Report sets out the ECB’s key achievements for 2017. In addition, the ECB published a speech on the Annual Report given by Daniele Nouy, Chair of the ECB’s Supervisory Board, which includes focus areas on general developments in the […]

Complaints Commissioner concerned about information sharing between FOS and FCA

In a recent report the Complaints Commissioner expressed concern about the absence of published information about how and in what circumstances information about live ombudsman cases may be shared between the FOS and the FCA. The complaint alleged that the FCA illegally influenced the FOS in its handling of complaints against a firm represented by […]

Andrew Bailey speaks on transforming culture in financial services

The FCA has published a speech by Andrew Bailey, FCA Chief Executive, on transforming culture in financial services. Mr Bailey highlights the following issues: work on firm culture is an important priority for the FCA; essays in the FCA’s Discussion Paper on transforming culture in financial services indicate that culture is about encouraging and incentivising good things, […]

BSB publishes annual review

The Banking Standards Board has published its annual review.  Its key point is that, last year, it carried out the largest ever survey of behaviours, competence and culture in UK banking. It noted that the scores to its 36 questions improved in comparison with the previous year for 25 of the questions, and declined for […]

BoE outlines 2018 stress test

The BoE has published the scenario against which it will stress-test banks in 2018. As confirmed by the FPC, the basis of the test will be the same as the 2017 version, but the hurdles will evolve such that: banks will be held to higher standards the more systemically important they are; hurdle rates will […]

High Court approves Barclays ring-fencing transfer application

On 9 March 2018, the High Court considered an application for the sanction of a ring-fencing transfer scheme (RFTS) made by Barclays Bank plc in the case of Re Barclays Bank plc and another [2018] EWHC 472 (Ch). As this was the first application for the sanction of an RFTS under section 111 of the Financial […]

FCA Discussion Paper on transforming culture in financial services

As part of its ongoing work on culture and governance, the FCA has published a discussion paper, comprising a series of essays from academics and industry thought leaders covering: what a ‘good’ culture might look like; the role of regulation and regulators; how firms might go beyond incentives; and how to change behaviour for the […]

FCA surveys firms passporting into UK

As part of its preparation for Brexit, the Government announced in December 2017 that it would, if necessary, introduce legislation to enable a ‘temporary permission’ scheme for EEA firms and funds which, following Brexit, can no longer rely on their passporting rights to do business in the UK. The FCA has published a survey to […]

Treasury Committee welcomes Co-op review

Nicky Morgan has welcomed the “long overdue” review into the Co-op Bank. She had written to Andrew Bailey in February to ask why the review, announced by George Osborne in November 2013, had not yet started. The response from FCA confirmed that the review had to wait until enforcement action had concluded and noting the […]

FCA updates on product governance

FCA has provided an update on its work on product governance in small and medium sized retail banks.  Its recent review looked at 2 year fixed rate savings products and how firms’ product governance frameworks help them to identify and manage the ongoing conduct risks of their products. It specifically wanted to assess how firms […]

Treasury Committee concerned at GRG “rebrand”

The Treasury Committee is concerned at evidence RBS has provided to it that indicates that 75% of current RBS restructuring employees previously worked in the GRG. Nicky Morgan said that although Ross McEwen, RBS Chief Executive, had assured the Committee that the culture in the current Restructuring group is fundamentally different to that of the […]

Summary of responses to the ECB’s first public consultation on developing a euro secured overnight interest rate

The European Central Bank has published a summary of responses it received following its first consultation paper on a new euro unsecured overnight interest rate, published in November 2017. Responses include: a vast majority of respondents agreed with the definition suggested in the consultation document and expected the rate to be generally accepted by the public as […]

PRA updates on IDD and occasional consultation

PRA has published an update on responses to certain parts of its CP18/17 Occasional consultation. The update explains how PRA prepared to bring into force rulebook changes relating to the implementation of the Benchmark Regulation, MiFID 2 and the IDD, pending completion of relevant legislative changes.

BoE publishes annual report on FMI supervision

The Bank of England has published a report on its supervision of financial market infrastructures (FMI). The report measures performance against its 2017 annual report, as well as looking ahead. The report: Defines FMIs and their importance; Explains BoE’s supervisory role and BoE’s interaction with national and international regulators; Reports on BoE’s supervision over the […]

BCBS report on the implications of fintech developments for banks and bank supervisors

The Basel Committee on Banking Supervision has published a report on the implications of fintech developments for banks and bank supervisors. The report assesses how technology-driven innovation in financial services (fintech) may affect the banking industry and the activities of supervisors in the short to medium term.    

Treasury Committee publishes RBS report

The Treasury Committee has published the final, unredacted skilled persons’ report into the RBS treatment of SME customers in its Global Restructuring Group. It had given FCA until 16 February to publish this, but FCA did not do so and therefore the Treasury Committee has now done it.

The standards of lending practice for personal customers review

The Lending Standards Boards (LSB) has announced that it intends to review the Standards of Lending Practice for personal customers (Standards). The LSB is seeking input from registered firms, industry bodies, consumer and debt bodies, and other relevant parties whose work may interact with the LBS to help it consider whether updates to the Standards […]

FCA explains perimeter to Treasury Committee

Andrew Bailey has written to the Treasury Select Committee setting out a summary of the powers “FCA does not have”. It has been asked many questions in the context of the RBS GRG investigation. The letter sets out: FCA’s basic remit over regulated activities and its role as the UKLA as well as its powers […]

ESMA UPDATES Q&As

The European Securities and Markets Authority (ESMA) has issued updates of its Q&As on: the implementation of the European Markets Infrastructure Regulation (EMIR). The purpose of the document is to promote common supervisory approaches and practices in the application of EMIR; the implementation of the Central Securities Depository Regulation (CSDR). The Q&A provides common answers […]

FCA review of Board Effectiveness

The FCA has published a report of the independent review into the effectiveness of its Board. The review was undertaken by Independent Audit Limited. The review involved interviews with Board members, a review of documentation and observance of Board and committee meetings. The report also sets out the following broad themes: aligning of activities into […]

EBA starts 2018 stress test

EBA has launched the 2018 stress test. It will cover 48 banks and EBA expects to publish the results in early November.

Commission finalises own funds adjustment RTS

The European Commission has finalised the RTS for procedures excluding transactions with NFCs established in third countries for the purposes of the own funds requirement for credit valuation adjustment risk.  The RTS require institutions to verify the status of the counterparty at trade inception and thereafter annually, unless there is any reason to believe the […]

FCA consults on widening FOS access for small businesses

FCA has opened a consultation on plans to provide more small businesses with access to FOS. The changes proposed would allow FOS complaints redress to approximately 16,000 SMEs, charities and trusts, by changing the eligibility criteria to access FOS. Under the proposals, eligible businesses would be those that satisfy the following criteria: Under 50 employees; […]

FCA publishes policy statement on client money and unbreakable deposits

FCA has published a policy statement in response to feedback received from a consultation on depositing client money in unbreakable deposits. The consultation responded to difficulties faced by investment firms in depositing client money at banks. This was deemed to be partly due to the combined effects of the liquidity rules applicable to banks and […]

FSCS PUBLISHES PLAN AND BUDGET FOR 2018/2019

The Financial Services Compensation Scheme (FSCS) has published its Plan and Budget for 2018/2019. The Plan and Budget outlines the FSCS’s expected management costs and initial levy forecasts financial services firms will pay next year. The FSCS expects to levy the industry £336m, for the nine months to 31 March 2019, up from £320m in […]

Payment Systems Regulator explains focus on UK’s ATM network

The Payment Systems Regulator (PSR) has published a letter sent by it to the Chair of the Treasury Select Committee regarding the UK’s ATM network. The letter sets out the PSR’s continued commitment to ensuring access to ‘free to use’ ATMs, and describes its ongoing program of work on the ATMs network. The letter also […]

The PRA postpones the introduction of its reporting proposals set out Pillar 2 liquidity consultation paper

The PRA has updates its webpage relating to its consultation paper on Pillar 2 liquidity (CP13/17). In its consultation paper, the PRA set out its proposals on a cash flow mismatch risk  framework and other methodologies for assessing firms’ liquidity risk under the Pillar 2 liquidity framework. It also proposes drafting reporting rule changes and the […]

ECA’S REPORT ON THE OPERATIONAL EFFICIENCY OF THE ECB’S CRISIS MANAGEMENT FOR BANKS

On 16 January 2018, the European Court of Auditors (ECA) published a report on the operational efficiency of the European Central Bank’s (ECB) crisis management for banks. The report states that although the ECB has established a substantial framework for crisis management and resources for the assessment of bank recovery plans and the supervision of […]

IFRS 9 transitional arrangements – EBA Final Guidelines and the PRA’s “Dear CFO” letter

The EBA’s final Guidelines on disclosure requirements of IFRS 9 Following its consultation in July 2017, the European Banking Authority (EBA) has today published its final Guidelines on disclosure requirements of International Financial Reporting Standard 9 (IFRS 9) or expected credit losses (ECLs) transitional arrangements, specifying a uniform disclosure template institutions should use when disclosing […]

Up next from FCA

FCA’s latest Policy Development Update promises, among other things: policy statement on regulatory fees and levies by the end of March; the delayed policy statement on further implementation of the FAMR; consultation on the Money Market Funds Regulation in January; the final policy statement and near final IDD rules, also in January; and consultation in […]

PRA consults on MREL reporting

PRA is consulting on changes to its Supervisory Statement 9/13 to reflect its expectations for reporting in the minimum requirement for own funds and eligible liabilities. It seeks comments by 9 April.

FCA fines and bans former RBS trader, Neil Danziger

The FCA has fined former Royal Bank of Scotland (RBS) interest rate derivatives trader, Neil Danziger, £250,000 and has prohibited him from performing any function in relation to any regulated financial activity. The FCA found that Mr Danziger, who formerly worked at RBS trading products referenced to Japanese Yen LIBOR,  was knowingly concerned in RBS’s failure to […]

FCA consultation paper on aligning FSCS levy time period

The FCA has published a consultation paper on aligning the Financial Services Compensation Scheme (FSCS) levy time period (CP18/1). The FCA recently made changes to the FSCS funding arrangements as part of a broader review of FSCS funding, including to align the FSCS compensation levy year with the financial year. The FCA has since become […]

Increase in limit on Building Societies’ maximum currency transaction size

Treasury has published the Building Societies (Restricted Transactions) (Amendment to the Limit on the Trade in Currencies) Order 2017. This Order increases the limit set out in section 9A of the Building Societies Act 1997 at which building societies can convert currency from £100,000 to £3 million, in order to better reflect the nature and […]

ESMA consults on draft Securitisation Regulation technical standards

The European Securities and Markets Authority has published three consultation papers on draft technical standards implementing the Securitisation Regulation that is expected to be published by the end of this year. The matters addressed by the draft technical standards include requirements for the content and format of underlying exposures and investor report templates, and operational […]

Treasury, FCA and EIOPA issue statements regarding continuity of activities and services after Brexit

Along with the PRA’s publication of consultation papers on its intended approach to supervision of third country firms, the Treasury, FCA and ESMA have recently issued statements providing an update on provision to enable firms across Europe to continue to do business after Brexit. The Treasury has announced that if necessary (ie depending on the […]

Digital comparison tools: government responds to CMA market study

Earlier this year, the Competition and Markets Authority (CMA) published the results of a market study into the use of digital comparison tools in a number of sectors, including car insurance, home insurance and credit cards. The findings of the market study included strong concern about the use of ‘most favoured nation’ clauses, which can […]

PRA publishes consultation papers on approach to supervision of third country firms after Brexit

The PRA has issued two consultation papers on its approach to branch authorisation and supervision, addressed to international banks and to international insurers.  Both consultations close on 27 February 2018. The Bank of England has also published letters from Sam Woods, Deputy Governor for Prudential Regulation regarding PRA regulated firms’ planning assumptions, and from Sir […]

Payment Services Regulator requires change to Direct Debit rules regarding switching Facilities Management providers

The Payment Services Regulator (PSR) has published its decision to require the operator of the Bacs payment system, of which the Direct Debit scheme is a part, to change its rules to help clients switch Facilities Management (FM) service providers. Direct Debit FM service providers enable organisations which aren’t specifically approved or sponsored as Bacs […]

Law Commission to address electronic signatures and smart contracts in 13th Programme of Law Reform

The Law Commission has announced the programme of reforms it will be working on over the next 3 years.  The projects include: Electronic signatures: there is an absence of explicit case law or legislation confirming that documents executed with an electronic signature satisfy statutory requirements for documents to be in writing and/or signed and/or under […]

ESMA clarifies application of MAR to trading in closed periods in updated MAR Questions and Answers

The European Securities and Markets Authority has published 2 new questions relating to the prohibition on dealings by persons discharging managerial responsibilities during a closed period in its updated MAR Questions and Answers.  Please read our briefing  for more.

FCA sets out future approach to authorisation and competition

FCA has outlined its approach to authorisation and to competition. It notes it is one of the few financial regulators in the world with an objective that includes promoting competition. It wants to understand, in relation to authorisations: whether applicants clearly understand how to meet the Threshold Conditions – and, if not, how FCA could […]

FCA makes new rules

At FCA’s Board meeting on & December, it made several new rule instruments, covering (among other things), several changes to take effect from 3 January 2018: minor changes relating to MiFID 2 implementation, including a new definition of “high frequency algorithmic trading technique”, amending various definitions relating to derivatives to ensure they reflect changes to […]

Final text of ‘Basel IV’ published

The Basel Committee has endorsed the final set of reforms to Basel III (referred to by some as Basel IV). These reforms will mainly affect the affect the methodologies used by banks in calculating risk weighted assets.  It is expected that many banks will have increased capital requirements as a result. However, to soften the […]

EBA’s speech on fintech and cloud in banking

The European Banking Authority (EBA) has published Slavka Eley’s, Head of Supervisory Convergence Unit at the EBA, speech given at the EBF Cloud banking Conference. Slavka Eley’s speech covered three aspects relating to innovation: the observed changes in the banking landscape mainly driven by technological innovation; the use of cloud computing in banking; and FinTech […]

IFRS 9 transitional Regulation published

There has been concern about the anticipated regulatory capital impact when International Financial Reporting Standard 9 is implemented from January 2018, resulting from some firms seeing a significant increase in expected credit loss provisions. In response, the EU Council has published the text of a Regulation that, amending the Capital Requirements Regulation, sets out a […]

Up next from FCA

FCA’s latest Policy Development Update promises the following publications before the end of 2017: Policy Statement on formalisation of the debt concession for smaller credit unions Policy Statement on market infrastructure providers’ fee rates Policy Statement on the second consultation on FAMR implementation Policy Statement on the second IDD implementation consultation (with a PS on […]

Treasury Committee seeks LINK assurance

Nicky Morgan, chair of the Treasury Committee, has written to the Chairman of LINK seeking assurances on the continuity of provision of cash machines. There is a proposal to reduce the fee card issuers pay to ATM operators from 25p to 20p per withdrawal and the Committee is concerned this could make some machines not economically […]

Financial Stability Report, November 2017

The Bank of England (BoE) has published its financial stability report, issue number 42.  The report sets out the Financial Policy Committee’s (FPC), a sub-committee of the BoE’s Court of Directors, views of the outlook for UK financial stability, including the assessment of the resilience of the UK financial system and the main risks to […]

EBA repeals its Guidelines on retail deposits subject to different outflows for the purpose of liquidity reporting

On the 27 November 2017, the European Banking Authority (EBA) announced that it has decided to formally repeal its guidelines on retail deposits subject to different outflows for the purposes of liquidity reporting under the Capital Requirements Regulation. The EBA has decided to repeal the Guidelines as they have been superseded by the Liquidity Coverage […]

Credit Unions Act 1979 (Locality Common Bond Conditions) Order 2017

The Credit Unions Act 1979 (Locality Common Bond Conditions) Order 2017 (SI 2017/1144) has been published, along with an explanatory memorandum. The Order makes a change to section 1B(3)(a) of the Credit Unions Act 1979, by increasing the number of potential members of a credit union for the locality common bond from 2 million to 3 […]

FCA publishes a statement on LIBOR panels

The FCA has confirmed  that all 20 of the panel banks for LIBOR (the London Interbank Rate) have agreed to support the LIBOR benchmark, ensuring the sustainability of the rate until 2021. The confirmation follows Andrew Bailey’s, FCA Chief Executive, speech in July 2017, on the need for a transition period for LIBOR until the […]

FCA updates on wholesale banks compliance review

FCA has published a note summarising the results of its review of the compliance function in wholesale banks. It had asked 22 wholesale banks (including global banks, medium-sized banks focusing on specific areas or geographies and firms with less significant UK footprints) 27 questions. Key themes included: the need for the compliance function to evolve in […]

Autumn Budget 2017: Key points for the financial services sector

Philip Hammond, Chancellor of the Exchequer, has delivered the Autumn Budget 2017. Key points for the financial services sector include: Asset management – the Government will publish a new long-term strategy to ensure that the UK asset management industry continues to thrive and deliver the best possible outcomes for investors and the UK economy. This will […]

Bank of England publishes a summary of the responses to its white paper on SONIA

The Bank of England (BoE) has published a summary of the responses it has received to its white paper (published in June 2017)  on sterling risk-free reference rates (RFRs). The white paper set out the working group’s thinking on adoption of the Sterling Overnight Index Average (SONIA) interest rate benchmark as an alternative to the London Interbank Offered […]

Financial Exclusion: UK government publishes response to Lords Select Committee final report

Following the appointment in 2016 by the House of Lords of a Select Committee to investigate financial exclusion and access to mainstream financial services, the Committee published its final report, ‘Tackling Financial Exclusion: A Country that works for everyone‘ in March 2017 (Report).  This Report made 22 recommendations to address financial exclusion and access, including […]

Treasury Committee inquiry into household finances

On 8 November, the Treasury Committee announced the launch of a new inquiry that will examine problematic indebtedness, inter-generational issues, lifetime financial planning and the effectiveness of the market in financing solutions and products to low income households. The Chair of the Treasury Committee, Rt. Hon. Nicky Morgan, indicated that the scope will include: what […]

PSR update on authorised push payment scams and reimbursement model consultation

The Payment Systems Regulator (PSR) has provided an update on progress in relation to authorised push payment (APP) scams, where fraudsters trick customers into instructing their banks to make a payment to what the customer believes is a legitimate account. Following a Which? super-complaint in September 2016, PSR, FCA and the payments industry developed a work […]

Cheque imaging: consultation on supporting legislation

HM Treasury has published a consultation on secondary legislation to support the Image Clearing System (ICS) for cheques. The legislative proposals follow the amendments to the Bills of Exchange Act 1882 introduced by the Small Business, Enterprise and Employment Act 2015, which allowed the introduction of cheque imaging.  This aims to cut down cheque clearing times […]

Up next from FCA

FCA’s latest Policy Development Update promises, before the end of the year: policy proposals for regulatory fees and levies policy statement on the second consultation on FAMR implementation policy statement on IDD consultation CP17/33 feedback on certain parts of occasional consultation and quarterly consultations  

BSB consults on good outcomes

The Banking Standards Board is consulting on what good banking outcomes look like to customers.  It is particularly interested in responses from consumer and civil society organisations. The consultation sets out how BSB is creating a “Consumer Framework” – it has set some principles which it is looking to embellish with outcomes and illustrative “real […]

Interest Rate rises for the first time in 10 years

For the first time in more than 10 years the Bank of England (BoE) has raised interest rates. At its meeting on 1 November, the BoE’s Monetary Policy Committee (MPC) voted by a majority of 7-2 to increase the official bank rate from 0.25% to 0.5%. Although households will face higher mortgage interest payments after the […]

FCA consults on FSCS funding

Following its December 2016 consultation for views on how FSCS funding could be reformed, FCA has published a further consultation paper seeking to ensure FSCS continues to provide the right protections, works effectively and is funded fairly. Proposals under consultation include: Merging the Life and Pensions and Investment Intermediation funding classes; Requiring product providers to […]

FCA updates on retail banking model review

FCA has published a paper on the purpose and scope of its review of the business models used in the retail banking sector. It is now considering what evidence it can best gather to understand: the state of competition and conduct in the markets; how free-if-in-credit banking is paid for and its effects on different […]

Final guidelines on the identification and management of step-in risk issued by the Basel Committee

The Basel Committee on Banking Supervision has released its Guidelines on identification and management of step-in risk . The guidelines build upon two consultations carried out by the Committee in December 2015 and March 2017. Step-in risk refers to the risk that a bank provides financial support to an entity beyond, or in the absence […]

FCA begins debt management sector review

In line with its 2017/18 Business Plan, FCA has begun its thematic review of the debt management sector. FCA has taken a particular interest in this sector, owing to the increased risks faced by (particularly vulnerable) consumers where firms fail to meet their needs. In 2014, FCA declared that debt management firms needed to “raise their game” if they […]

FCA’s first Financial Lives Survey: 50% of UK adults potentially vulnerable

After collecting responses from over 13,000 UK consumers, FCA has revealed the results of its largest tracking survey of consumer behaviour and use of retail financial products and services. Aiming to tell the financial story for six age demographics (and key themes of each life stage), the survey found that 50% of the adult population shows one […]

BoE updates resolution planning MoU

BoE has updated its MoU on resolution planning and crisis management between it, the PRA and Treasury. The MoU clearly sets out the duties of each entity and was last updated in April.

BoE announces SONIA implementation date

The Bank of England (BoE) has confirmed an implementation date of 23 April 2018 for reforms to the Sterling Overnight Index Average (SONIA) interest rate benchmark. The March 2017 reforms will result in the following changes: BoE taking on the end-to-end administration, including calculation and publication of SONIA; the coverage of SONIA being broadened to […]

Bond Dickinson financial services team ranked in Legal 500

The Bond Dickinson financial services team is delighted to have achieved a Legal 500 ranking. The new directory described the team as providing  ‘responsive, practical, commercial and cost-effective’ advice to a wide variety of clients within the retail sector of the financial services industry. It says that  “‘Very knowledgeable’ team head Andrew Barber has ‘in-depth […]

ECON votes on TLAC

The ECON in the EP has voted to harmonise the bail-in hierarchy by supporting the Commission proposal for a new category of “non-preferred” senior class of debt instruments in line with the TLAC standard. The instruments cannot be a derivative or have any derivative component, and will sit between senior liabilities and own funds instruments […]

Up next from FCA

FCA’s latest Policy Developments Update lists several key publications due before the end of the year: policy proposals for next year’s fees and levies policy statement on FSCS funding policy statement on the second part of FAMR implementation policy statement on the second IDD implementation consultation (in December, with the policy statement on the third […]

PRA consults on large exposures

PRA is consulting on changes to its large exposures rules to provide: enhanced guidance on application of criteria for core UK group and non-core LE group permissions; changing the non-core LE group calibration basis for firms that have both permissions; and changing how the non-core permission applies at UK consolidated group level. Consultation closes on […]

PRA consults on groups policy and double leverage

The PRA has outlined proposals on groups policy and double leverage in its latest consultation paper. Groups policy speaks to the distinction between individual legal entities (and the particular jurisdiction they are in) and the broader multi-jurisdictional banking groups of which they form a part, and the difficulties inherent in the PRA regulating both. Groups policy is […]

PRA comments on “Geofinance”

Sam Woods, speaking at Mansion House,  commented on what he predicts to be an increasingly prevailing dynamic in financial institutions and financial regulation. Geofinance is the impact of geography on how banks, insurers and regulators operate, and Woods remarks that it “is likely to be the defining challenge of the next few years.” Woods stated “stability begins at home” […]

PRA publishes Occasional Consultation

PRA’s latest Occasional Consultation paper proposes minor changes to several modules of its Rulebook. Proposed changes include changes to whistleblowing requirements for UK branches of non-EEA deposit takers, MiFID 2, IDD and BMR forms and CRR and CRD amendments in application requirements. Consultation closes on various dates from 17 October to 9 January.

PRA updates on IRB

PRA has published an update on its expectations on firms when they use the IRB approach.

PRA updates on Pillar 2A

PRA has refined its Pillar 2A capital framework from 1 January 2018 as part of its SREP reviews. It has published a new policy statement and update to its supervisory statement with instructions for reporting.

PRA makes leverage ratio changes

PRA has published changes to its reporting requirements relating to the leverage ratio, to apply to firms’ reporting and disclosure requirements from end of December 2017 onwards. The changes require banks to exclude from the calculation of total exposure measure those assets which are claims on central banks which are matched by deposits in the […]

PRA updates on MREL

PRA has published a statement of policy on its approach to setting its minimum requirements for eligible liabilities and own funds (MREL). The statement explains PRA’s approach in relation to going- and gone-concern resources, and its expectations on different size of firms.

BoE updates on resolution approach

BoE has published an update to its “approach to resolution“, originally published in 2014.