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☆ EU committee backs law to relocate euro clearing from London to bloc
▼ + stars: | 2023-11-28 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Nov 28 (Reuters) - An influential committee of European Union lawmakers voted on Tuesday in favour of a draft law aimed at shifting clearing of euro-denominated derivatives from a post-Brexit London to the bloc. Long a Brexit battleground between London and Brussels, the EU wants better oversight of clearing in euro denominated interest rate swaps bought by EU-based market participants, the bulk of which are cleared by the London Stock Exchange Group in the United Kingdom. EU securities regulator ESMA would also have to become the direct supervisor of clearers based in the EU. LSEG CEO David Schwimmer has said he is "optimistic" that clearing in London for EU customers would continue after that date. EU banks have warned that being cut off from global clearing pools in London would put them at a competitive disadvantage to international rivals.

Persons: Long, Danuta Huebner, David Schwimmer, Huw Jones, Mark Potter Organizations: European Union, EU, London Stock Exchange Group, Deutsche Boerse, European, Thomson Locations: London, Brussels, United Kingdom, EU, Frankfurt, Madrid

☆ Bank of England needs reform, damning new report from lawmakers finds
▼ + stars: | 2023-11-27 | by ( Jenni Reid | ) www.cnbc.com time to read: +2 min

Andrew Bailey, governor of the Bank of England (BOE), during the Monetary Policy Report news conference at the bank's headquarters in the City of London, UK, on Thursday, Nov. 2, 2023. LONDON — The Bank of England's current remit risks it becoming entangled with wider government policy aims and jeopardizes its ability to focus on bringing down inflation, a scathing report by senior U.K. lawmakers released Monday says. The report also said the BOE and other central banks are suffering from a lack of "intellectual diversity" that have led to forecasting failures. The report was launched after U.K. inflation soared to a 41-year high through fall 2022, hitting a peak of 11.1% year-on-year in late 2022, one of the most severe levels of all developed economies. The Lords report, which was compiled through the collection of written evidence and panel interviews, notes that all central banks made mistakes in characterising inflation in 2021 as "transitory."

Persons: Andrew Bailey, BOE Organizations: Bank of England, City of, LONDON, of, Economic Affairs, U.S Locations: City, City of London

☆ Bank of England should look more at money supply, lawmakers say
▼ + stars: | 2023-11-27 | by ( David Milliken | ) www.reuters.com time to read: +3 min

A bus passes the Bank of England in the City of London, Britain, February 14, 2017. "Climate change is the most-cited example of the expansion of the remit," committee chair George Bridges, a Conservative former Brexit minister, told Reuters. The House of Lords committee set up the inquiry in March, following a surge in inflation to a 41-year high last year. The central bank is midway through its own forecasting review led by former U.S. Federal Reserve Chair Ben Bernanke. The House of Lords committee said parliament should have more opportunity to debate these changes, and should conduct in-depth reviews of the BoE's work every five years.

Persons: Hannah McKay, BoE, Mervyn King, George Bridges, Ben Bernanke, Jeremy Hunt, Bridges, David Milliken, William Schomberg Organizations: Bank of England, City of, REUTERS, Economic Affairs Committee, Conservative, Reuters, U.S . Federal, Thomson Locations: City, City of London, Britain, Ukraine

☆ EU lawmakers back easing securities rules to attract more listings
▼ + stars: | 2023-10-24 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Oct 24 (Reuters) - A panel of European Union lawmakers on Tuesday voted in favour of easing the bloc's securities rules to encourage more company listings and compete better with capital markets in New York and post-Brexit London. Companies in the EU typically turn to banks for loans to expand, and the reforms are aimed at diversifying corporate funding. Multiple-voting structures are a key part of New York's attraction as a listings destination, particularly for tech companies. Britain is rewriting its securities rules which it inherited when it was a member of the EU and its planned changes are similar to those approved by EU lawmakers on Tuesday. The European Parliament and EU states have joint say on the EU rules and will now start negotiations on a final text that becomes law.

Persons: Alfred Sant, Huw Jones, Susan Fenton Organizations: European Union, London . Companies, European Commission, Lawmakers, EU, Thomson Locations: New York, London, Britain

LONDON, July 4 (Reuters) - British banks should have to serve a customer even if they disagree with his or her lawful political views, and should apply anti-money laundering checks proportionately, financial services minister Andrew Griffith said on Tuesday. Griffith was asked about his views on recent issues around banking services for politicians and other 'politically exposed persons' by the House of Lords' Economic Affairs Committee, which did not name Farage directly. Griffith said Britain's Financial Conduct Authority (FCA) now had powers under a new financial services law approved last week to revisit these rules. "The second thing that we've asked is that the FCA look at creating a domestic politically exposed persons (category) to reflect the lower category of risk associated with those whose affairs are wholly domestic," Griffith said. Reporting by David Milliken, Editing by Huw Jones and Mark PotterOur Standards: The Thomson Reuters Trust Principles.

Persons: Andrew Griffith, Nigel Farage, Coutts, Griffith, it's, David Milliken, Huw Jones, Mark Potter Organizations: Brexit Party, NatWest, Economic Affairs Committee, Authority, FCA, Thomson

☆ UK financial services minister urges caution over central bank digital currency
▼ + stars: | 2023-07-04 | by ( ) www.reuters.com time to read: +1 min

LONDON, July 4 (Reuters) - Britain should be cautious about whether to issue a digital version of the pound given privacy and other issues involved, financial services minister Andrew Griffith said on Tuesday. The finance ministry and Bank of England have launched a public consultation on whether to issue a so-called central bank digital currency or CBDC, mirroring moves by many central banks across the world. "My thinking about CBDC is that we should proceed cautiously, which is precisely what we are doing in the joint consultation with the Bank of England," Griffith told the House of Lords' Economic Affairs Committee. "It's right to engage and have the very widest - and, to a degree, the most thorough - public policy debate which we have started with the process of consultation," he added. Reporting by Huw Jones, editing by David MillikenOur Standards: The Thomson Reuters Trust Principles.

Persons: Andrew Griffith, Griffith, Huw Jones, David Milliken Organizations: Bank of England, Economic Affairs Committee, Thomson Locations: Britain

☆ Morning Bid: China steals the show before US inflation
▼ + stars: | 2023-06-13 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Sonali DesaiThe People's Bank of China (PBOC) managed to liven up the wait for Tuesday's highly anticipated U.S. consumer price inflation (CPI) data by lowering a short-term lending rate for the first time in 10 months. Several analysts had been expecting a cut to the one-year medium-term lending facility rate on Thursday, when the PBOC is widely expected to roll over maturing loans. The move had little broader impact on markets in the run-up to tonight's U.S. CPI release and this week's major central bank decisions. Europe's calendar highlights include UK employment data, Germany's ZEW survey for June and final May inflation data, and Bank of (BoE) Governor Andrew Bailey's parliamentary testimony. In the U.S., CPI data is likely to dominate market interest and factor into the Federal Open Market Committee's (FOMC) deliberations as it begins a two-day meeting.

Persons: Sonali Desai, Tuesday's, SoftBank Group's, BoE, Andrew Bailey's, BoE policymaker Catherine Mann, Bailey, CPI BoE Governor Bailey, ECB's Pablo Hernandez de Cos, Andrea Enria, FOMC, Christopher Cushing Organizations: People's Bank of China, U.S, CPI, U.S ., Intel, Reuters, Bank of, bps, Federal, Reuters Graphics Reuters, Economic, Thomson Locations: Asia, U.S . Federal, U.S

☆ Morning Bid: Signs of confidence re-emerge after bank storm
▼ + stars: | 2023-03-21 | by ( ) www.reuters.com time to read: +2 min

While UBS shares were hammered in early trading on Monday after its shotgun marriage with troubled Credit Suisse following an intervention by Swiss authorities, the bank's shares pared most of the losses towards the close. European Central Bank President Christine Lagarde said the market turmoil might do some of the ECB's work for it in dampening demand and inflation. Markets have been on high alert for central banks to raise interest rates sharply to cope with high inflation. ECB policymaker Robert Holzmann watered down his recent call for three more rate increases of 50 basis points in quick succession. Policy decision is on WednesdayReporting by Anshuman Daga; Editing by Bradley PerrettOur Standards: The Thomson Reuters Trust Principles.

☆ EU lawmakers set up clash with member states over share trade ban
▼ + stars: | 2023-03-01 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, March 1 (Reuters) - A panel of European Union lawmakers were set for a clash with member states after they backed a draft law banning brokers from earning fees in return for directing share trades to specific trading platforms. The European Parliament and the EU bloc's 27 member states must now thrash out a joint position that would become law. "A ban of PFOF is a huge disservice to retail clients and to the Capital Markets Union as a whole," said Markus Ferber, a committee member from Germany, where many PFOF brokers are based. The proposed ban is part of a draft law to update the bloc's securities rules known as MiFID. The committee also backed reducing off exchange "dark trading" favoured by big investors to 7% of total trading from 8% at present, and below the 10% which EU states want.

☆ EU lawmakers back 'prohibitive' capital rules for cryptoassets
▼ + stars: | 2023-01-24 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Jan 24 (Reuters) - European Union lawmakers backed a draft law on Tuesday to implement the final leg of post-financial global bank capital rules, adding "prohibitive" requirements to cover risks from cryptoassets. The European Parliament's economic affairs committee approved a draft law to implement Basel III capital rules from January 2025, though backing several temporary divergences to give banks more time to adapt. EU states have already approved their version of the draft law, and lawmakers will now negotiate a final text with member states, with further tweaks expected. EU states have taken a more accommodative approach to when foreign banks serving customers in the bloc should open a branch, or convert a branch into a more heavily capitalised subsidiary, with EU lawmakers on Tuesday taking a harder line. The EU is keen to build up "strategic autonomy" in capital markets as it faces a competing financial centre on its doorstep after Brexit.

☆ EU lawmakers to vote on tighter crypto, ESG rules for banks
▼ + stars: | 2023-01-23 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

One amendment states that banks would have to apply a risk-weighting of 1,250% of capital to cryptoassets exposures, meaning enough to cover a complete loss in their value. This is in line with recommendations from the global Basel Committee of banking regulators in December. The amendment requires the EU's executive European Commission to publish a report by June 2023 analysing the possibility of introducing prudential limits on banks' exposures to shadow banks. The draft law introduces a new "fit and proper" regime for appointing bankers, with amendments saying there should be targets for a bank's management body. After Tuesday's vote the lawmakers and EU states will thrash out a final deal which would come into effect in 2025.

☆ UK wages next year will be at their lowest level since 2006, report says
▼ + stars: | 2022-12-23 | by ( Hanna Ziady | ) edition.cnn.com time to read: +3 min

The report confirms that wages have stagnated in Britain even as inflation hits double digits, sparking the worst cost-of-living crisis in decades. That’s led to widespread strikes across the UK economy, encompassing railways, schools, nurses, hospitals and the postal service. “Despite a contracting economy, the UK remains an attractive destination for workers,” PwC economist Jake Finney said in a statement. “The rise in inactivity poses serious challenges to the UK economy. PwC’s Kupelian added that UK inflation likely peaked in October and “will gradually begin to return to target over the next two years.”

☆ EU, regulators see no need for radical change in energy derivatives
▼ + stars: | 2022-12-01 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Dec 1 (Reuters) - European Union officials and regulators on Thursday played down the need for radical intervention in gas markets after prices rocketed this year in the wake of Russia's invasion of Ukraine. Gas prices rose so high and fast that governments had to help energy firms meet higher collateral calls on their derivatives contracts, prompting some calls for change. The EU has proposed to capping gas prices, but only if they hit certain levels over many days. Hanzo van Beusekom, executive board member at AFM, the Dutch body which regulates the gas derivatives market, said prices will only fall when the supply of alternative gas increases and demand eases. Next week, the European Commission -- the EU's executive -- could propose that clearing houses hold a separate default fund for commodity derivatives.

Commercial banks are paid interest on the reserves by the BoE at whatever is the BoE's current interest rate - just 0.1% a year ago, but 3% now and likely to rise further. But now the BoE makes losses because the interest paid on reserves exceeds income from its QE bond holdings. Bailey said the current structure of paying interest fully on all reserves was the simplest way for the BoE to ensure its interest rate changes are transmitted through the financial system. He disagreed with descriptions that this was free money for banks, since they had their own funding costs to meet that also rose with central bank interest rates. Another former BoE rate-setter, Gertjan Vlieghe, on Thursday said it would be a "disaster" to stop paying interest on reserves, even partially - akin to a default on debt.

☆ EU wrestles with Payment for Order Flow share trading rules
▼ + stars: | 2022-11-17 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Nov 17 (Reuters) - European Union states edged closer on Thursday to ditching a proposed ban on brokers earning fees in return for directing stock trades to specific trading platforms. The United States is considering whether curbs are needed for PFOF while the UK has already banned it. The EU ban was proposed in a draft law by the EU's executive European Commission updating the bloc's MiFID II securities law, with EU states and the European Parliament having final say. The Federation of European Securities Exchanges (FESE) said discussions on PFOF and consolidated tape risk "cementing fragmentation and opacity" in markets. However, Huebner said competitiveness of EU markets is essential given competition from Britain and the United States.

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