banking & finance litigation update - jd...
TRANSCRIPT
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CONTENTS
Domestic Banking 2
Domestic General 3
European Banking 5
European General 6
International Banking 6
International General 7
Press Releases 8
BANKING & FINANCE LITIGATION UPDATE
ISSUE 82
2 | Issue 82 - Banking & Finance Litigation Update
DOMESTIC BANKING
BANK OF ENGLAND
1. The Bank of England has announced a major
change to its monetary policy arrangements. The
changes, which will be implemented from 2016,
will mean there will only be eight decisions made
on interest rates each year, rather than 12.
Financial Times, 12 December 2014
2. The Financial Times has reported that the Bank of
England began an investigation into possible
market manipulation by its own staff in the
summer. The bank is trying to ascertain whether
its employees knew about or facilitated the
manipulation of money-market auctions which
occurred during the financial crisis.
thetimes.co.uk, 22 November 2014
BARCLAYS
3. As part of its plan to cut the number of branches it
operates to reduce costs, Barclays is to introduce a
home-based system whereby customers will be
able to talk to staff about issues via a "Skype-
like" system instead of having a face-to-face
interview.
Sunday Telegraph, 30 November 2014
CO-OPERATIVE BANK
4. The Co-operative Bank has had its financial
strength deemed as inadequate after failing Bank
of England stress tests. The tests have forced the
Co-op to accelerate its plans to improve its
finances. Details of its new capital plan have been
approved by the Bank of England.
Telegraph, 16 December 2014
LLOYDS BANKING GROUP
5. The government has made a surprise
announcement that it plans to sell up to 5.4 per
cent of its remaining stake in Lloyds Banking
Group over the next six months. The sale, which
could be worth £3 billion, would leave the
government with less than 20 per cent of the bank
in its possession before the next general election.
Telegraph, 18 December 2014
6. The dormant Bank of Wales name has been
purchased by Lloyds Banking Group along with
the Banc Cymru name. Lloyds is hoping to use
the names to market savings products to new
customers and has already created a website for
the brand.
Telegraph, 15 December 2014
7. Scottish Widows, the insurance arm of Lloyds
Banking Group, is to sell its offshore investment
and tax planning business which is based in the
Isle of Man. Those with knowledge of the process
have indicated that there are a number of parties
interested in the sale of the entity which is
responsible for around £5 billion of funds.
Financial Times, 1 December 2014
8. Lloyds Banking Group is to "simplify" its range of
savings accounts offered by its three entities
Lloyds, Halifax and Bank of Scotland. The group
is to replace 47 old accounts, which are no longer
open to the public, with just three savings accounts
paying 0.25 per cent interest. The change will
mean that a third of Lloyds existing customers
with the accounts will see their income drop as a
result of rate cuts.
Telegraph.co.uk, 26 November 2014
THE ROYAL BANK OF SCOTLAND
9. Current account customers with The Royal Bank
of Scotland ("RBS") have been getting unexpected
letters from the lender informing them that their
debit cards need to be replaced as they have been
"compromised". This is happening even where
customers have not lost cash nor observed any
suspicious activity on their accounts. The lender
said the move was part of a trial launched in the
summer with the intention of eradicating card
fraud before it happens. It did not reveal the
number of customers who were being contacted.
Telegraph.co.uk, 18 December 2014
10. Bloomberg has reported that RBS intends to
withdraw from fixed-income trading in Japan and
reduce employees from approximately 200 to
lower than 50. It is anticipated that RBS
Securities Japan will relinquish its primary
dealership and executives of RBS are said to be
scheduled to meet shortly with officials from the
Financial Services Agency to detail the proposal
for closure.
Independent.co.uk, 10 December 2014
11. Intesa Sanpaolo, the Italian lender, has announced
that it will only bid for the wealth management
operation of RBS if the unit is sold in its entirety.
www.dlapiper.com | 03
The UK lender is looking to sell the international
division of Coutts only.
Telegraph, 29 November 2014
12. The Prudential Regulation Authority (PRA) has
uncovered a mistake in RBS's core capital ratio
which it says has been "overstated" by £4 billion.
RBS has admitted the error, which came to light
during analysis by the PRA of the European
Banking Authority's stress test results, and may
face a financial penalty as a result.
Times, 22 November 2014
STANDARD CHARTERED
13. A new group has been set up by Standard
Chartered to fight financial crime as it tries to
convince regulators in America that it is taking
radical action so that scandals in relation to
sanctions-busting and money-laundering do not
happen again. The financial crime risk committee
will be made up of senior directors and
knowledgeable external advisers to eradicate
misconduct and to assure the US authorities that
the terms of a deferred prosecution agreement will
be met, the lender said.
thetimes.co.uk, 11 December 2014
14. Following a settlement in 2012 between Standard
Chartered and the US Department of Justice with
regard to money laundering violations, the
regulator has extended its deferred prosecution
agreement with the bank until the end of 2017,
saying it had not yet "reached the standard
required" in an acceptable compliance
programme.
Telegraph, 10 December 2014
15. Credit ratings agency Standard & Poor's has
downgraded its rating on Standard Chartered for
the first time in two decades, considering it to be
less creditworthy as a result of a series of profit
warnings and increased charges on loans. The
lender's long-term debt has been cut from AA- to
A+ and its short term debt from A-1+ to A-1.
Telegraph, 29 November 2014
DOMESTIC GENERAL
16. The Serious Fraud Office has confirmed that a
man in Billericay, Essex, has been arrested. His
arrest is thought to be the first in connection with
an investigation into attempts to rig the foreign
exchange market. £2.7 billion worth of fines were
handed to six banks in November, in connection
with rigging allegations.
Telegraph, 20 December 2014
17. As it continues its work on the 2015 edition of its
stress tests, the Bank of England has made it clear
that banks are likely to be tested on their ability to
withstand a shock emanating from what are
known as "emerging markets". The banks which
could be most tested by such a focus would be
HSBC and Standard Chartered, with their
presence in Asia, and Barclays, which has a
growing business in Africa.
Independent, 17 December 2014
18. Bank of England "stress" tests on eight high street
banks have found three of them - the Co-
Operative Bank, Lloyds Banking Group and RBS
- lacking in financial strength. The five others -
Barclays, HSBC, Standard Chartered, Santander
UK and the Nationwide building society - did not
have any capital inadequacies. Of the three banks
shown to have some issues, only the Co-op Bank
was ordered to prepare a revised plan being the
only bank to fall below a minimum core tier one
capitalisation that had been set by the Bank of
England.
Guardian.com, 16 December 2014
19. Following months of negotiations with the
Treasury, nine high street banking groups -
Barclays, HSBC, Co-operative Bank, Lloyds,
Nationwide, RBS, Santander, TSB and NAB
(owner of Clydesdale Bank and Yorkshire Bank) -
have agreed to offer basic bank accounts with no
charges for failed payments. The banks also
agreed to provide all account holders with debit
cards and full access to the UK's main cash
machine network, services previously charged for
or unavailable to many basic account customers.
The deal was welcomed by consumer groups.
4 | Issue 82 - Banking & Finance Litigation Update
Times, 16 December 2014
20. The Financial Conduct Authority ("FCA") has
proposed a ban on banks and other financial
services firms from directing customers who wish
to complain or get some advice to premium-rate
phone numbers. Under the proposals the banks
would not be able to charge anything over the
basic rate. Currently many banks offer new
customers a Freephone number, but switch
existing customers to premium-rate numbers.
Times, 13 December 2014
21. Under new powers which came into force on 12
December 2014, fines or even criminal penalties
could be handed to any banks or building societies
which allow current accounts to be opened by
known illegal immigrants. The bank account
move is part of a strategy by the Home Office
which aims to make life in the UK more difficult
for those foreigners who do not have visas.
Financial Times, 12 December 2014
22. New guidelines which are being developed by the
financial industry and the FCA, could see bankers
having social media behaviour included in their
employment contracts. The finance industry has
been slow to adopt popular social media
platforms, but this is changing with the industry's
launch of The Social Media Charter, a set of
standards aimed at helping to avoid any future
embarrassing incidents.
Financial Times, 12 December 2014
23. The commissioner of the City of London Police,
Adrian Leppard, who has national responsibility
for tackling fraud, has said that, for the first time,
banks must be made to report the full extent of
financial crime to the authorities. Mr Leppard said
that the failure by the financial industry to give
proper notification about incidents, meant that the
criminals involved were being allowed to get off
"scot free". Once compensation has been paid to
customers banks prefer to keep any fraud details
confidential, leaving millions of incidents
unreported.
Telegraph, 11 December 2014
24. Rating agency Standard & Poor's has claimed that
the ring-fencing regime due to be imposed on the
UK's five biggest high-street banks by the Bank of
England, could end up relegating their investment
banking divisions to "junk" status. In order to
protect customers from risky activity the banks
must, from 2019, place their retail and trading
operations in separate subsidiaries.
Telegraph, 10 December 2014
25. With banks becoming increasingly concerned over
the rising level of penalties being levied against
them and the impact this could have on their
capital, the FCA is to conduct a review of its
penalty regime. Investigations into possible
rigging of the foreign market and the Libor
interest rate benchmark, have seen FCA fines
reach record levels, with £1.39 billion in fines
handed out since April 2014, more than three
times the previous high amount for a whole year
period.
Financial Times, 8 December 2014
26. The past year has seen a jump in bank overdraft
charges, with the average customer rate having
increased by 11 per cent, according to Bank of
England figures. This is despite a period of record
low funding costs for banks, which has meant falls
in savings and other borrowing rates.
Sunday Telegraph, 7 December 2014
27. British banks have been surprised by chancellor
George Osborne's move in his Autumn Statement
to launch a crackdown on their ability to off-set
future tax bills by using post-2008 financial crisis
losses. Osborne called it "totally unacceptable"
that, due to the level of so-called deferred tax
assets held on their balance sheets, "some banks
would not pay any tax for 15 to 20 years." The
move will, over the next five years, raise around
£3.5 billion in extra tax. Foreign banks whose UK
arms hold large amounts of deferred tax assets
could be affected by the crackdown.
Financial Times, 4 December 2014
28. Challenger bank Shawbrook, established in 2011,
has hired investment banks Goldman Sachs and
Bank of America Merrill Lynch, as it prepares for
a 2015 float on the London Stock Exchange.
Going public would enable the bank to have an
acquisitions currency, raise fresh capital and use
share awards as an incentive for staff.
Times, 4 December 2014
29. The Treasury and the Bank of England have
issued a joint statement in which chancellor
George Osborne announced his intention to extend
the Funding for Lending Scheme (FLS), which
was set to end in January 2015. The cheap credit
will only be available to banks if it is used to
support small businesses. So far the FLS, which
has seen £48 billion drawn down by lenders, has
not led to an increase in the level of net lending to
small business.
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Times, 3 December 2014
30. The chairman of Metro Bank, Vince Hill, has
criticised the technology systems used by
incumbent banks, describing them as
"horrendous". Hill, who co-founded the
challenger bank, said that the banking industry
compared unfavourably to the high standards
reached by other industries when it came to
technology.
Financial Times 28 November 2014
31. A report by the think-tank New City Agenda has
found that retail banks have made provision for
£38.5 billion worth of fines and compensation
since the turn of the century, and since the
financial crisis of 2008 they have received over 20
million complaints. The report also said that it
would take a generation before the public regained
the trust in banks lost as a result of the financial
crisis and various mis-selling scandals.
Telegraph.co.uk, 26 November 2014
32. Investors and companies have suggested that the
FCA's plan to change equity research would result
in a reduction of liquidity and analyst coverage
which in turn would limit the effectiveness of
small companies trying to raise money through
IPOs on the stock market.
Financial Times, 25 November 2014
33. The Treasury is to drop its challenge to EU rules
on a bonus cap following a ruling from the
advocate-general of the European Court of Justice
that Britain's challenge had "no legitimate
grounds".
Times, 21 November 2014
34. Lawyers and banking industry figures have
warned that plans from Bank of England governor
Mark Carney to force bankers who misbehave to
pay back their salaries, and not just bonus
payments, could clash with the EU's bonus cap
and could face serious legal challenges. Mr
Carney has expressed an interest in "performance
bonds" being used to pay bankers.
Telegraph, 18 November 2014
35. In a new report, MPs from the Parliamentary
Committee on Banking Standards have said that
more bank employees, including more staff in the
mid-tier, should be subjected to a tougher pay
regime by regulators. The report argues that the
current rules need to be broadened as they apply to
too few.
Financial Times, 17 November 2014
36. As regulators look to improve their understanding
of the "culture" at investment banks, as well as
how bankers in the City carry out their business on
a day-to-day basis, the FCA has begun holding
unscheduled site visits with bankers and traders in
an effort to ensure employees are not coached to
give certain answers ahead of interviews.
Times, 17 November 2014
EUROPEAN BANKING
COMMERZBANK
37. Commerzbank will begin charging negative
interest on big deposits. For the moment
the charges will not be levied on private
customers, only on "single large corporate clients
with high balances" in addition to "large
corporations and institutional investors". The rate
at which penalty interest is charged will be
discussed with individual clients. The charges
could apply from as early as December.
Telegraph, 21 November 2014
CREDIT SUISSE
38. The owner of the Daily Express and OK!
magazine has settled with two City giants in a £42
million court case regarding a derivative swap he
claimed was "incomprehensible". In a joint
settlement with Credit Suisse and hedge fund
group GLG, Richard Desmond is understood to
have won a considerable amount, believed to
be over £10 million. A trial had been scheduled
for January 2015.
Independent, 18 December 2014
DEUTSCHE BANK
39. Deutsche Bank has completed its withdrawal from
the buying and selling of physical commodities
following investigations by authorities that it had
participated in alleged abuse. The bank has ended
its involvement in trading in precious metals and
follows other banks, such as Barclays, JP Morgan
and Morgan Stanley on reducing or withdrawing
from the commodities trading sector.
Financial Times, 28 November 2014
EUROPEAN CENTRAL BANK
40. In a move that will bring it more into line with
other central banks, the European Central Bank
("ECB") has confirmed that, from January 2015, it
6 | Issue 82 - Banking & Finance Litigation Update
intends to publish accounts of its monetary policy
deliberations.
Financial Times, 19 December 2014
41. Whilst uncertainty remains over the impact that
plummeting oil prices will have, the ECB has
outlined a wait-and-see approach to pumping
money into the eurozone's struggling economy.
Officials have "stepped up" preparations for a
stimulus, according to ECB president Mario
Draghi, but the bank is waiting to see if the
economy is improved by spending over the
Christmas period. A bond-buying programme
could be started at the ECB meetings in January or
March if deflationary pressures in the Eurozone
economies are reinforced by the drop in the oil
price.
Times, 5 December 2014
SANTANDER
42. Santander UK has issued a convertible debt worth
£300 million to its Spanish parent Company
Banco Santander to strengthen its capital position
ahead of further stress tests from the Bank of
England next year. It is expected that the stress
tests in 2015 will look at banks' accounts as they
stand at the end of December 2014 to assess their
financial strength.
Sunday Telegraph, 21 December 2014
43. Santander UK has announced that Baroness
Vadera will join its board on 1 January 2015 as
joint deputy chairwoman and replace the current
chairman, Lord Burns, on 30 March 2015. The
former investment banker will be the first woman
chair of a British bank.
Times, 13 December 2014
44. After recently taking over as executive chairman,
Ana Botín has put her stamp on Santander. Chief
financial officer José Antonio Álvarez will replace
Javier Marín, who is leaving the Spanish lender, as
chief executive effective from 1 January 2015.
The position of lead independent director will be
filled by Bruce Carnegie-Brown, a non-executive
director of the lender's British arm, Santander UK,
when Ms Botín was at the helm.
Times, 26 November 2014
SOCIETE GENERALE
45. Societe Generale has advised its clients to
liquidate British assets and dump sterling before
the UK general election in May 2015. Alain
Bokobza, head of the bank's global asset team has
warned that much of Britain's growth is driven by
excess leverage and a housing bubble and that
"this is due to lax monetary policy that needs
tightening".
Telegraph, 3 December 2014
EUROPEAN GENERAL
46. A lawsuit has been filed at the European Court of
Justice by a group of investors who lost hundreds
of millions of euros when Banco Espírito Santo
collapsed. The suit challenges the decision by the
European Commission to approve a bailout by the
Portuguese state. Brazilian investment bank BTG
Pactual, hedge fund Third Point, and the other
investors have previously filed a legal challenge
over the lender's restructuring. The main entity
left after the restructuring, Novo Banco, is due to
be sold off by Portugal, but the new lawsuit could
cast doubt on the sale.
Financial Times, 15 December 2014
47. A failure to reach an agreement on the basic
elements of a proposed financial transactions tax
by the end of 2014, ahead of its proposed start in
2016, means it is likely that the EU's 'Tobin' tax
will be postponed, possibly indefinitely.
Times, 9 December 2014
48. A referendum in Switzerland has seen voters
overwhelmingly reject proposals that would have
forced the Swiss National Bank to hold 20 per cent
of its assets in gold. The rejection, by 77 per cent
of voters, has given the National Bank space to
protect the Swiss franc against an ECB blitz of
quantitative easing.
Telegraph, 1 December 2014
INTERNATIONAL BANKING
BANK OF AMERICA
49. A move by George Osborne in his Autumn
statement to reduce the amount of corporation tax
banks can avoid, intended to recoup money from
the bailed-out banks Lloyds and RBS, will also
affect Bank of America. Unusually for a foreign
bank, Bank of America has $7 billion of deferred
tax losses in the UK resulting from its purchase of
Merrill Lynch in 2009.
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Times, 8 December 2014
CITIGROUP
50. Citigroup has set aside £1.7bn in anticipation of
regulatory fines related to manipulation of the
foreign exchange market, Libor and money
laundering. Michael Corbat, the bank's chief
executive, announced the provision at a financial
conference in New York.
Telegraph, 10 December 2014
CLOSE BROTHERS
51. Close Brothers has said that another rise in
business lending has counterbalanced the tough
conditions in its market-making operation keeping
it on track for the year. The merchant banking
group attributed an increase of 2.3 per cent in its
loan book to £5.4 billion in the three months to the
end of October to robust demand for property and
asset finance. Reduced funding costs are also
making its margins better while the level of bad
debts dropped.
Telegraph.co.uk, 20 November 2014
GOLDMAN SACHS
52. John Waldron, who worked on the Fox and News
Corp demerger, has been appointed as co-head of
investment banking by Goldman Sachs. He
replaces John Weinberg, who is moving to a new
post at the bank.
Independent, 20 December 2014
NATIONAL AUSTRALIA BANK
53. National Australia Bank, which has signalled it
intends to withdraw from the UK market, is
reported to have appointed Morgan Stanley to
lead a flotation of subsidiaries Yorkshire Bank
and Clydesdale Bank which could value the
banks at over £2bn in total. A flotation could be
delayed by the 2015 UK general election and low
appetite for listings.
Sunday Times, 23 November 2014
NOMURA
54. Jeremy Bennett has stepped down as Nomura's
European CEO. Yasuo Kashiwagi will take over
as acting European CEO.
Financial Times, 21 November 2014
INTERNATIONAL GENERAL
55. In a move which is largely symbolic, restrictions
on market access for foreign banks have been
loosened by China, as it looks to make good on
earlier promises to allow more competition in its
domestic financial sector. The waiting period for
foreign banks to make an application to conduct
renminbi business once they establish operations
in China, has been reduced from three years to
one, with a two consecutive years of profitability
requirement dropped. Foreign currency business is
restricted for those foreign banks not in possession
of a renminbi licence.
Financial Times, 22 December 2014
56. The US Financial Industry Regulatory Authority
has handed out fines totalling more than $40
million to ten banks over breaches of conflict of
interest rules, after the banks - either implicitly or
explicitly - promised Toys "R" Us better research
coverage by their market analysts in exchange for
a place on the retailer's stock market listing in
2010. The float did not go ahead.
Times, 12 December 2014
57. Benjamin Lawsky, head of the New York
Department of Financial Services is to write to
banks with a New York state charter or licence,
including Barclays, Deutsche Bank and Standard
Chartered, asking them to look on cyber security
as a key part of their overall risk management
strategy. The banking regulator is to issue new
guidance that will include increased scrutiny of
banks' cyber security procedures.
Financial Times, 10 December 2014
58. Following the most comprehensive review of the
country's financial systems since 1997, the
Australian government has told the country's
banks that, in order to make sure they are
"unquestionably strong" and robust enough to
survive any future financial crisis, they need to
hold extra capital running to billions of dollars.
The review also recommended that, to make
competition easier for new entrants and smaller
banks, extra capital on mortgage lending should be
set aside by Australia's four "pillar banks".
Financial Times, 8 December 2014
59. As banks look to crack-down on staff behaviour
which could be illegal, they are moving away from
traditional monitoring systems and instead looking
8 | Issue 82 - Banking & Finance Litigation Update
to state of the art surveillance software, new data
sources and behavioural science. This follows the
use by regulators of the analysis of electronic
messages to help them catch bankers accused of
rate-rigging.
Financial Times, 1 December 2014
60. As a result of the recent drop in oil prices, a
number of banks, including Barclays and Wells
Fargo, could experience huge losses from an $850
million loan made by the banks to two oil and gas
companies.
Financial Times 27 November 2014
61. Diamond Bank, one of the biggest banks in
Nigeria, has sold an 18 per cent share to the
private equity house Carlyle Group for £150
million.
Financial Times, 25 November 2014
62. With penalties for misconduct soaring, the year to
the end of September 2014 saw the US
Department of Justice collect a record $24.7
billion in fines on behalf of itself and other US
regulators, compared to $8 billion in 2013 and $13
billion in 2012.
Times, 20 November 2014
63. Following a review by the Australian Securities
and Investment Commission, seven staff involved
in a regulatory investigation looking at benchmark
interbank interest rate fixing have been suspended
by Australia and New Zealand Banking Group.
Telegraph, 20 November 2014
64. In one of the most significant moves by China in a
decade in terms of the opening of the country's
capital account, the Shanghai-Hong Kong Stock
Connect has been launched. The trade channel
will enable wealthy Chinese investors to trade
hundreds of stocks in Hong Kong, giving greater
freedom with regard to overseas investments.
Financial Times, 17 November 2014
65. Bank of England governor Mark Carney has
warned private equity firms, hedge funds and
other areas of the unregulated "shadow banking"
sector that the next year will see them being
closely scrutinised by financial regulators, due to
concerns over the risks they may pose to financial
stability.
Telegraph, 17 November 2014
PRESS RELEASES
66. FCA to regulate seven additional financial
benchmarks
The FCA will regulate seven additional major UK
-based financial benchmarks in the fixed income,
commodity and currency markets from 1 April
2015. This extends the FCA’s initial regulation of
LIBOR (the London Interbank Offered Rate), as
introduced by HM Treasury in 2013, and
implements the recommendations of the Fair and
Effective Markets Review.
Financial Conduct Authority, 22 December 2014 http://www.fca.org.uk/news/fca-to-regulate-seven-
additional-financial-benchmarks
67. Chancellor confirms manipulation of key
FOREX benchmark to be made a criminal
offence
The Chancellor George Osborne has confirmed
that the government will extend the legislation
originally put in place to regulate LIBOR to cover
seven further financial benchmarks, including the
main foreign exchange benchmark, with those
found guilty of manipulating these benchmarks
facing up to seven years in prison.
HM Treasury, 22 December 2014 https://www.gov.uk/government/news/chancellor-
confirms-manipulation-of-key-forex-benchmark-to-be-
made-a-criminal-offense
68. Government makes recommendations to
strengthen financial regulators’ enforcement
decisions
The government has published a number of
recommendations to ensure that the way the
financial regulators, the FCA and the PRA make
enforcement decisions continues to be fair,
transparent and efficient, following a review.
HM Treasury, 18 December 2014
https://www.gov.uk/government/news/government-makes
-recommendations-to-strengthen-financial-regulators-
enforcement-decisions
69. Government to sell part of its remaining
shareholding in Lloyds through a trading plan.
The Chancellor has set out the next stage in the
government’s plan to return Lloyds Banking
Group to private ownership and get taxpayers’
money back, by announcing that the government
www.dlapiper.com | 09
will sell part of its remaining shareholding in the
firm through a trading plan.
HM Treasury, 17 December 2014 https://www.gov.uk/government/news/government-to-sell
-part-of-its-remaining-shareholding-in-lloyds-through-a-
trading-plan
70. Bank of England announces results of UK
stress test
The Bank of England has announced the results of
the first concurrent stress testing exercise of the
UK banking system. Alongside the stress test
publication, the Bank of England also published
its Financial Stability Report, which sets out the
Financial Policy Committee’s assessment of the
outlook for the stability and resilience of the
financial sector, and the Systemic Risk Survey,
which quantifies and tracks market participants’
perceptions of systemic risks.
Bank of England
http://www.bankofengland.co.uk/publications/Pages/
news/2014/169.aspx
71. Bank of England announces results of UK
stress test
Chancellor of the Exchequer, George Osborne,
has welcomed Mark Carney’s proposals to
strengthen transparency and accountability of the
Bank of England, and the recommendations of the
Warsh review to improve decision making and
transparency of the Monetary Policy Committee.
HM Treasury, 11 December 2014
https://www.gov.uk/government/news/bank-of-england-
proposals-to-bolster-transparency-and-accountability-
welcomed-by-chancellor
72. Bank of England announces measures to
bolster transparency and accountability
The Bank of England has published an
independent report by former Federal Reserve
Board Governor Kevin Warsh, following his
review of the Monetary Policy Committee’s
transparency practices and procedures.
Bank of England, 11 December 2014
http://www.bankofengland.co.uk/publications/Pages/
news/2014/168.aspx
73. Bank of England maintains Bank Rate at 0.5%
and the size of the Asset Purchase Programme
at £375 billion
The Bank of England’s Monetary Policy
Committee has voted to maintain Bank Rate at 0.5
per cent. The Committee also voted to maintain
the stock of purchased assets financed by the
issuance of central bank reserves at £375 billion.
Bank of England, 4 December 2014
http://www.bankofengland.co.uk/publications/Pages/
news/2014/012.aspx
74. Funding for Lending Scheme: Bank of England
and HM Treasury announce extension
The Bank of England and HM Treasury have
announced a one-year extension to the Funding
for Lending Scheme (FLS). This extension will
provide lenders with continued certainty over the
availability of cheap funding to support lending to
small and medium-sized enterprises (SMEs)
during 2015, even in the event of stress in bank
funding markets.
HM Treasury & Bank of England, 2 December 2014
https://www.gov.uk/government/news/funding-for-
lending-scheme-bank-of-england-and-hm-treasury-
announce-extension
75. FCA publishes terms of reference for credit
card market study
The FCA has published the terms of reference for
a credit card market study. The FCA announced
the market study in April 2014 after its own
research showed that the credit card market was
not working well for some consumers.
Financial Conduct Authority, 25 November 2014
http://www.fca.org.uk/news/fca-publishes-terms-of-
reference-for-credit-card-market-study
76. PRA fines RBS, Natwest Bank and Ulster Bank
£14 million for IT failures
The PRA has fined RBS Plc, National
Westminster Bank Plc and Ulster Bank Ltd £14
million for inadequate systems and controls which
led to a serious IT incident in 2012. This is the
first financial penalty the PRA has imposed since
it came into being in April 2013. The FCA has
separately fined the banks for the same incident
Prudential Regulation Authority & Financial Conduct
Authority, 20 November 2014
http://www.bankofengland.co.uk/publications/Pages/
news/2014/152.aspx
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77. Historic rupee bond issued in London
The government has welcomed the International
Finance Corporation’s announcement that it has
issued an Indian rupee 10 billion bond in London.
It is the largest ever rupee bond to be issued on the
London Stock Exchange, and is the longest issue
ever for an offshore rupee bond with a maturity of
10 years.
HM Treasury, 18 November 2014
https://www.gov.uk/government/news/historic-rupee-
bond-issued-in-london
78. Regulating individual conduct in banking: UK
branches of foreign banks
A Treasury consultation seeks views on the draft
Financial Services and Markets Act 2000
(Relevant Authorised Persons) Order 2015, which
would apply the Senior Managers and
Certification Regime to UK branches of foreign
credit institutions and to foreign investment firms
that carry on the regulated activity of dealing in
investments as principal in the UK and are
regulated by the PRA. Comments by January 30,
2015.
HM Treasury, 17 November 2014
https://www.gov.uk/government/consultations/regulating-
individual-conduct-in-banking-uk-branches-of-foreign-
banks
79. The FCA and industry agree to improve the
way consumer complaints are dealt with
Financial firms have collaborated with the FCA
on a thematic review and, as a result, have agreed
to make improvements to the way they deal with
consumer complaints. The FCA will be consulting
on possible changes to its dispute resolution rules
later.
Financial Conduct Authority, 17 November 2014
http://www.fca.org.uk/news/fca-and-industry-agree-to-
improve-the-way-consumer-complaints-are-dealt-with
80. European banks call on policy makers to show
commitment to enabling growth and
calibration of regulations
The European Banking Federation (EBF) has
stated that the current fixation on tighter and
continuous regulation on banks needs to be set
against requirements to boost the economy. EBF
president Christian Clausen stated that the Board
remains firmly opposed to the proposed
mandatory separation of trading activities as it
would damage both the functioning of the
financial sector and the economy.
European Banking Federation, 14 November 2014
http://www.ebf-fbe.eu/wp-content/uploads/2014/11/EBF-
Board-press-release-November-2014-FINAL.pdf
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