Business activity and also demand for credit may be returning in Britain, but the uncertainty around Brexit is, if anything, growing after the recent rhetorical skirmishes between the EU and its departing member. Now the chief executive of Goldman Sachs, Lloyd Blankfein, has spoken to the BBC of his fears that the expansion of London as a financial capital "will stall [or perhaps] backtrack a bit". It is a curious sort of comfort then that the timetable for Brexit is so tight: at least certainty of some sort is in the works. Mr Blankfein counselled both sides to remain calm and "take stock of what their long term economic interests are. And in the UK it is to try and have a very good relationship with a very big trading bloc, and for the European market to recognise what a big economy the UK is." Hear, hear.
The world of payments has been continuously revealing itself as central rather than peripheral, especially as digitalisation makes efficiencies and outcomes possible that seemed but pipe dreams only a few short years ago. From Prime Minister Modi in India to the framers of PSD2 and the proponents of Open Banking, there is a belief that competition can be increased, and incumbents reformed, by nurtured digital — rather than directly regulatory — means. Now the UK's Payment Systems Regulator is proposing the streamlining of three separate entities — Faster Payments, the Cheque and Credit Clearing Company and Bacs — by the end of 2017: "That would mean new banks will only have to make one application to use all the three systems, thereby speeding up the process and cutting costs", notes Reuters. The question is: can the regulators really succeed? And, further, will the passion for open APIs survive the transition to post-EU commercial pressures on Britain?
Across Europe, Spain's Banco Popular has reported a loss of €137m for the first quarter. This did not match analyst expectations, but the fact that the balance sheet appears to be strengthening and encouraging plans are in place under new chairman, Emilio Saracho, has led to a sharp rise in share values. Nonetheless the fact remains that, as City AM observes, "Banco Popular has the largest slice of non-performing loans in the Spanish banking sector." The bank's toxic property assets reportedly run to €37bn. In France, Société Générale has seen net profits for the quarter fall 19 percent to €747m, a situation not helped by the €963m needed to settle a legal case brought by Libya's sovereign wealth fund over trades in 2007 and 2009: the sum is being accompanied by a public apology for its employees' "lack of caution".
Uber faces criminal probe over software used to evade authorities
China's push to stabilise financial system leaves markets in disarray [WSJ paywall]
Bank of England reveals individual banks' debt requirements for first time [FT paywall]
Quotes of the Week
A selection of quotes that have caught our eye of late at Lafferty News.
- "Our pivot to Asia continues."
Stuart Gulliver, CEO of HSBC, quoted by BBC News
- "This is not only raising questions about Jes Staley, it also raises questions about the Barclays board."
Michael Lafferty, speaking on Share Radio
- "If a systemic crisis is brewing, it may be in the shadow banking system."
John Plender on Canadian and Australian lenders, Financial Times
- "By providing for faster settlements, more transparency, and diversification, fintech is likely to have as many stabilising as destabilising effects.."
Larry Summers, Financial Times
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