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☆ Britain's banks urge Bank of England to keep small company capital rule
▼ + stars: | 2023-04-03 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, April 3 (Reuters) - Forcing banks to set aside more capital in case loans to small and medium-sized companies turn sour would hit Britain's economy, banking industry body UK Finance said on Monday. It has proposed ending the preferential capital treatment for loans to small businesses, known as the SME supporting factor. "The SME support factor should not be completely and suddenly removed," UK Finance said in a statement. Britain should bring the floor into line with other countries to avoid a competitive disadvantage, UK Finance said. The BoE plans a simpler capital regime for smaller UK lenders, and UK Finance said the central bank should apply it to subsidiaries of foreign lenders operating in Britain as well.

☆ Sterling ticks higher against dollar as focus stays on rate outlook
▼ + stars: | 2023-04-03 | by ( ) www.reuters.com time to read: +2 min

LONDON, April 3 - Sterling ticked higher against the dollar on Monday, with market moves largely driven by news of a surprise announcement from OPEC+ of more production cuts which sent the price of oil and the dollar sharply higher earlier in the session. By 1030 GMT the pound was up 0.18% against the dollar which trimmed gains, at $1.2352. "The impact overnight in the Asian session was one of higher oil after the OPEC cuts, meaning lower chances of rate cuts by the Fed and so a higher dollar. With little in the way of UK-specific data this week, attention is staying on the Bank of England's rate outlook and the UK's economic outlook. British inflation is around 10.4% - over five times the Bank of England's target rate of 2% and the highest among the Group of Seven rich nations.

☆ Stocks rise and dollar falls while oil rallies
▼ + stars: | 2023-03-31 | by ( Sinéad Carew | ) www.reuters.com time to read: +4 min

[1/2] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 30, 2023. Economists polled by Reuters expect core prices rose by 0.4% in February and posted an annual increase of 4.7%. The U.S. dollar slipped to a one-week low against the euro as German inflation data helped lift the common currency. MSCI's gauge of stocks across the globe (.MIWD00000PUS) closed up 0.72% while emerging market stocks (.MSCIEF) rose 0.67%. Gold prices gained with a weaker dollar and lower bond yields driving demand for the precious metal, while investors waited for U.S. inflation data to gauge the Fed's next move.

☆ Britain sets out next steps to green its financial system
▼ + stars: | 2023-03-30 | by ( Huw Jones | ) www.reuters.com time to read: +3 min

Asset managers oversee assets worth 10 trillion pounds ($12.35 trillion), with nearly half having integrated ESG into the investment process, the paper said. "This will support the quality of standards, labels and disclosures used in the industry for green finance activity," the ministry said in a statement. "The government proposes that nuclear - as a key technology within our pathways to reach net zero - will be included within the UK’s Green Taxonomy, subject to consultation." In the fourth quarter, Britain will also consult on requirements for the largest companies to disclose their transition plans to net zero carbon emissions, if they have one, the ministry said. Brendan Curry, policy fellow at the Grantham Research Institute on Climate Change, said the updated strategy has "failed to deliver" a clear roadmap for the annual investment needed for net zero.

☆ New York catches up with London to head City's global centres survey
▼ + stars: | 2023-03-29 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, March 30 (Reuters) - London is no longer the clear leader among global financial centres after New York rose from second place to level peg with the British capital as more companies list in the United States, the City of London Corporation's said on Thursday. The City, which administers London's financial district, said in its annual survey that benchmarks on the performance of global financial centres gave London an overall competitiveness score of 60, up from 59 in 2022, but New York increased its score to 60. New York overtook London in 2018 to become the top global financial centre in the separate Z/Yen survey. The City is due in the third quarter to set out recommendations for a long-term blueprint to "kickstart" London's role as a post-Brexit global financial centre by 2030. "The UK remains one of the most open and global financial centres with better access to international markets than the US, France, or Japan.

☆ Bank of England tells regulators to move fast on LDI reform after mini-budget crisis
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +3 min

LONDON, March 29 (Reuters) - The Bank of England on Wednesday told regulators to move fast to toughen rules for funds used by Britain's pension industry which nearly collapsed last year after former Prime Minister Liz's Truss's "mini-budget." But the BoE's Financial Policy Committee called on pension regulators to act "as soon as possible" to mitigate the risks posed by liability-driven investment (LDI) funds. The FPC also said there is a need to toughen resilience of money market funds, used by companies for day-to-day financing, and UK regulators will publish a consultation paper on MMF regulation later this year. The FPC stressed that "all UK banks" have been assessed on their resilience to moves in interest rate rises, including the impact on their holdings of net open bond positions. (Reporting by Huw Jones and William Schomberg)((uk.economics@reuters.com; +44 20 7542 5109))Keywords: BRITAIN BOE/Our Standards: The Thomson Reuters Trust Principles.

☆ UK watchdog to soften sustainability disclosures for asset managers
▼ + stars: | 2023-03-29 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, March 29 (Reuters) - Britain's financial watchdog said on Wednesday the introduction of new sustainability disclosure requirements (SDR) for asset managers to prevent greenwashing will be pushed back and softened to avoid excluding many funds. The new requirements aim to stop asset managers over-inflating the sustainability credentials of investment funds they sell - so-called greenwashing. The watchdog will also widen the scope products that are labelled as sustainable so fewer funds would be excluded. The FCA said the new rules would clarify that it will not need independent verification of product categorisation to qualify for a sustainability label. There will also be a place for all "in scope" products within the overall package of measures, it said.

☆ Britain eyes shake-up in listing rules to attract more company flotations
▼ + stars: | 2023-03-29 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, March 29 (Reuters) - Britain's financial watchdog said on Wednesday it will consult on streamlining its company listing rules to help London compete better with New York in company floats. It said it would consult on replacing its twin-track standard and premium company listing regime with a single regime and set of requirements. Britain made some changes to listing rules in 2021 to help attract tech company flotations as part of a wider set of reforms to keep London a globally competitive financial centre after being largely cut off from the European Union by Brexit. The watchdog will propose scrapping requiring companies to have a three-year financial track record as a condition of listing, a challenge for start ups, Rathi said. A more permissive approach to dual class share structures - whereby founders can retain control of a company - would also be proposed.

☆ New York holds top spot, London second in Z/Yen financial centre survey
▼ + stars: | 2023-03-23 | by ( ) www.reuters.com time to read: +1 min

LONDON, March 23 (Reuters) - New York kept the top spot in the latest rankings of global financial centres from Z/Yen Group on Thursday, with London and Singapore also unchanged in second and third place. "New York retains a significant first position, and five other U.S. centres are in the top 10," Z/Yen chairman Michael Mainelli said in a statement. The twice-yearly survey rates 120 financial centres combining 61,449 assessments from 10,252 financial professionals with quantitative data. New York retains its leading position in the Fintech ranking, followed by San Francisco, with London moving up one place to third, while Shenzhen rose three places to fourth, Z/Yen said. Z/Yen March 2023 Global Financial Centres GraphicReporting by Huw Jones; Editing by Alison WilliamsOur Standards: The Thomson Reuters Trust Principles.

☆ EU executive says no decision yet on financial sector commission ban
▼ + stars: | 2023-03-22 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, March 22 (Reuters) - The European Union's executive said on Wednesday that upcoming plans to bolster retail investor protections will be "ambitious", but any ban on banks offering commission in return for business from financial advisers has yet to be decided. The European Commission in the coming weeks is due to propose its "retail investment strategy" to deepen its capital market, a step made more urgent by Britain's exit from the bloc. His boss, EU financial services commissioner Mairead McGuinness, has suggested that inducements or commission offered by banks to financial advisers who send business their way should be banned to end a conflict of interest and cut fees. Industry officials talk of the idea of a ban being dropped or introducing over many years. Any follow-up legislative proposal would be for the new commission from late 2024, he added.

☆ Bank of England welcomes Credit Suisse deal, says UK banks are safe
▼ + stars: | 2023-03-19 | by ( ) www.reuters.com time to read: +2 min

[1/2] Logos of Swiss banks UBS and Credit Suisse are seen in Zurich, Switzerland March 19, 2023. REUTERS/Moritz HagerLONDON, March 19 (Reuters) - The Bank of England welcomed moves by the Swiss authorities to broker a take-over by UBS of Credit Suisse on Sunday, indicating it would support approval of the deal, and it said the British banking system was well funded. UBS (UBSG.S) agreed to buy rival Swiss bank Credit Suisse (CSGN.S) for 3 billion Swiss francs ($3.23 billion) in stock and assume up to 5 billion francs ($5.4 billion) in losses in a merger engineered by Swiss authorities. "The UK government welcomes the steps taken today by the Swiss authorities in relation to Credit Suisse to support financial stability, and will continue to engage with the FCA and the Bank of England as is usual," a finance ministry spokesperson said. ($1 = 0.9280 Swiss francs)Reporting by Alistair Smout and Huw Jones Editing by William SchombergOur Standards: The Thomson Reuters Trust Principles.

☆ Britain to bolster the City after Silicon Valley Bank collapse
▼ + stars: | 2023-03-15 | by ( Huw Jones | ) www.reuters.com time to read: +4 min

[1/2] A person walks over Millennium Bridge amidst early morning fog, as the sun rises beyond the City of London financial district in the background, in London, Britain, February 8, 2023. Following the collapse of its parent company in the United States, Silicon Valley Bank's UK arm was sold to HSBC over the weekend to avoid disrupting its customers in Britain. Hunt said he would make a statement in the autumn on how the UK financial system would be strengthened. City Minister Andrew Griffith has said that an accounting rule for pension funds has become a "performance penalty" which holds back investment in Britain. The financial sector has called for faster implementation of the proposals after Amsterdam overtook London as Europe's biggest share trading centre.

☆ Dampened rate expectations ease pressure on borrowers, says UK watchdog
▼ + stars: | 2023-03-10 | by ( ) www.reuters.com time to read: +2 min

The Financial Conduct Authority (FCA) said that in addition to households already behind on payments, 356,000 mortgage borrowers could face payment difficulties by the end of June 2024, but that is far fewer than a previous FCA estimate of 570,000. Those rolling off a fixed rate mortgage deal could end up paying an additional 340 pounds ($404.84) a month on average, the FCA said. Nikhil Rathi, FCA chief executive, told parliament on Wednesday that the watchdog had intervened in over 30 firms that had not treated borrowers in difficulty fairly. "The leadership of banks understand their reputations are at stake if they don't handle things appropriately in coming months," Rathi said. ($1 = 0.8398 pounds)Reporting by Huw Jones; Editing by Susan FentonOur Standards: The Thomson Reuters Trust Principles.

☆ UK says financial reforms will be within same 'orbit' as EU, US
▼ + stars: | 2023-03-09 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, March 9 (Reuters) - Britain's revamped financial market rules will largely be aligned with U.S. and European Union regulations to minimise disruption to global companies, its financial services minister Andrew Griffith said on Thursday. The EU and United States have also set out market reforms and, with the British changes initially trailed as a "Big Bang"-style shake-up, global banks want to avoid major divergence in rules that bump up their costs. Griffith said Britain has a "clear vision" of ambitious practioner-led reforms to make the country's regulation more proportionate, simpler, modern and based on high standards. Danuta Huebner, a European Parliament member who is leading reform of EU securities rules, said the Edinburgh Reforms put increased emphasis on risk taking and competitiveness, but it was unclear if this will mean divergence from the EU. The 27-member bloc said this week it would activate a new forum for UK and EU regulators to exchange views, key to easing tensions over issues like derivatives clearing.

LONDON, March 9 (Reuters) - The European Union's financial watchdogs will test the financial sector's resilience to shocks that could derail the bloc's push to meet a 2030 deadline for slashing carbon emission. This will need extra investments totalling 350 billion euros ($370 billion) a year over this decade, not all sourced from the public sector, meaning a stable financial system will be needed for raising funds. "As part of this work, we would also appreciate any insights into the financial system’s capacity to support green investments under stress." Any "policy relevant" conclusions should be provided to the commission no later than the first quarter of 2025, Berrigan said. "Results should be as differentiated (notably by countries, types of financial institutions, economic sectors) as possible," he said.

☆ EU restarts work on EU-UK regulatory forum after Northern Ireland deal
▼ + stars: | 2023-03-08 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

March 8 (Reuters) - The European Union's executive body said on Wednesday it will finalise a long-delayed discussion forum for EU and UK financial regulators, once the deal on Northern Ireland has been implemented by Britain. The forum, similar to what the EU already has with the United States, was due to have been created by March 2021, but was put on ice because of disagreements over trading relations with Northern Ireland. Those disagreements have been ironed out in last month's agreement, or Windsor Framework, which has yet to be formally implemented by Britain. "We are ready to start work on the finalisation of the Memorandum of Understanding (MoU) on financial services regulatory cooperation," a spokesman for the European Commission's financial services unit said on Wednesday. The forum has no mandate to decide on EU financial market access, but financial industry officials say it could improve strained cross-Channel relations in the sector, and help ease tension in areas, such as derivatives clearing.

☆ EU watchdog to tackle banks with too few women on boards
▼ + stars: | 2023-03-07 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

Women earned on average 9.5% less than male executive directors, and 6% less than male non-executive directors. While banks are allowed to set their own targets for women on boards, some EU states have adopted national laws with targets. EBA Diversity Graphic 2Larger banks, and banks from northern and eastern Europe fare better on diversity, perhaps linked to better childcare facilities in those countries. The EU has just approved a law requiring at least 40% of non-executive board members at listed companies to be women from mid-2026. EBA Diversity Graphic 1Reporting by Huw Jones; Editing by Alexander SmithOur Standards: The Thomson Reuters Trust Principles.

☆ Bank of England says insurers more likely to fail if capital cut rule goes ahead
▼ + stars: | 2023-03-06 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, March 6 (Reuters) - Britain's proposals to loosen capital rules for insurers will increase the chances of an insurance company failing by 20% in a given year, the Bank of England has told lawmakers, reiterating its caution over the government's plan. Following Britain's departure from the European Union, its finance ministry has proposed easing capital requirements for insurers to unlock billions of pounds for investing in infrastructure to boost the economy. Easing the so-called Solvency II rules inherited from the EU is seen as a key "Brexit dividend" for the financial sector, and the ministry overrode warnings from the Bank of England, saying policyholders would still be protected. The BoE will implement the ministry's proposed reforms of Solvency II if approved by parliament, Bailey said. ($1 = 0.8335 pounds)Reporting by Huw Jones; Editing by Susan FentonOur Standards: The Thomson Reuters Trust Principles.

[1/2] A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville/File PhotoLONDON, March 3 (Reuters) - London risks losing its appeal for stock market listings, some investors and financial executives said, with sluggish trading and low valuations driving more companies to float elsewhere. That dashed government hopes that Arm, seen as a British tech success story, would return to the London market, where it was listed before being taken over in 2016. Arm's announcement came a day after Dublin-based construction materials company CRH recommended moving its primary listing from London to the United States. But British companies that floated in New York have not necessarily had the smooth ride they expected, data compiled by the London Stock Exchange (LSE) (LSEG.L) suggests.

☆ London Stock Exchange Group posts steady 2022 earnings, eyes buyback on Blackstone/TR stake
▼ + stars: | 2023-03-02 | by ( ) www.reuters.com time to read: +1 min

LSEG reported total income, including recoveries, of 7.743 billion pounds ($9.28 billion) in preliminary results for 2022, just above analysts' consensus of 7.733 billion pounds. It reported a basic earnings per share of 141.8 pence and a dividend per share of 107 pence, both above analysts' forecasts. It said 300 million pounds of a separate 750 million pound share buyback was executed in 2022, with the remainder to be completed by July 2023. Thomson Reuters, the parent company of Reuters News, owned about $5.6 billion worth of LSEG shares as of Jan 31. Schwimmer said the integration of Refinitiv and a strategic $2 billion partnership announced with Microsoft in December meant the group is "shifting from integration to transformation".

☆ European banks, asset managers study halving stocks settlement time
▼ + stars: | 2023-03-02 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, Mar 2 (Reuters) - Banks and asset managers have set up a new task-force to study whether Europe should keep up with Wall Street by halving the time it takes to settle share trades. Halving settlement in Europe would mean banks and asset managers having to reconfigure their IT systems at a cost. Last September, AFME poured cold water on an idea that would require agreement between the European Union, Britain and Switzerland to avoid fragmenting share trading. The task-force will look at whether Europe should adopt T+1 -- and if so, when -- in a bid to shape regulatory thinking. Given heavy transatlantic share trading, firms in Europe will have to make some changes to reflect the U.S. move in any case.

☆ Morning Bid: EU inflation risks loom large for markets
▼ + stars: | 2023-03-02 | by ( ) www.reuters.com time to read: +3 min

March 2 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole. Asian markets had thought to bask in the glow from Wednesday's radiant PMI data from China, and the region in general. Markets are now leaning toward a peak of 5.50%-5.75%, compared with 5.0% just a month ago. That leaves a lot riding on what EU (HICP) inflation figures for February show later on Thursday. Median forecasts are for an annual figure of 8.2%, but risks are on the upside following the surprises from France, Spain and Germany.

☆ LSE Group targets Blackstone/Thomson Reuters stake buyback as raises outlook
▼ + stars: | 2023-03-02 | by ( Huw Jones | ) www.reuters.com time to read: +4 min

"In addition to our existing share buyback, we are today announcing plans to seek shareholder approval for a buyback directed towards the Blackstone/Thomson Reuters consortium's stake, which will benefit all shareholders," LSEG Chief Executive David Schwimmer said in a statement. The directed buyback is expected to be up to 750 million pounds by April 2024, LSEG said. LSEG said 300 million pounds of a separate, broader 750 million pound share buyback was carried out in 2022, with the remainder to be completed by July 2023. TARGETSLSEG's total income, including recoveries, of 7.743 billion pounds ($9.28 billion) in preliminary results for 2022, was just above analysts' consensus of 7.733 billion pounds, and up from 6.535 billion in 2021. LSEG also raised its guidance on revenue synergies from 225 million pounds by 2025 to 350-400 million pounds.

☆ Morning Bid: Ten-four, Treasury yields soar
▼ + stars: | 2023-03-02 | by ( ) www.reuters.com time to read: +4 min

The remarkable sight of 10-year Treasury yields back above 4% for the first time in almost four months is only matched by two-year yields at 15-year highs stalking 5%. Weekly jobless claims on Thursday and the latest Fed speakers take on unusual importance in such a febrile rates market. And 6% Fed rates that seemed fanciful only a month ago are now being openly discussed by banks. Despite year-on-year oil prices now tracking declines of 25%, European inflation fears are a key feature of this week's nervousness. Benchmark German 10-year bond yields soared to 11-year highs at 2.77%.

☆ 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.

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