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Home » Daily Briefing » Daily briefing - 12 November 2018

Daily briefing - 12 November 2018

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American Express will be the first international card scheme to gain a settlement and clearing licence in China. "The card scheme has formed a joint-venture with China's LianLian to build a network business that will enable charges on American Express branded cards to be cleared and settled domestically by the joint-venture," according to Finextra. Previously, foreign card businesses have had to partner with UnionPay for access to the country's payments network. "The opening up of the market comes as China bids to mend fences with Trump's Government in the US and follows almost a decade of lobbying by US-based payment schemes." Mastercard and Visa are still waiting on their licences. What kind of signal is China sending? With the shift in economic heft to the East, there is now speculation that in the next decade, China will displace France as the world's biggest tourist destination. China would clearly like to see Amex-wielding tourists at the head of the queue.

Two years ago, Lafferty News warned that only two banks out of 100 selected for our benchmarking project dealt with climate change in their strategic outlooks in their annual reports. This weekend, Finland's central bank governor Olli Rehn warned that banks will have to take risks caused climate chance into account. "For a banker or any financial institution, climate change poses physical risks, such as extreme weather... and the debt servicing ability of a borrower or their credit quality may be affected," he said, according to the FT. Notably, both of those banks — Denmark's Ringkjøbing and Turkey's Garanti Bank were among the four-star contenders.

Yet Mr Rehn's intervention on climate change may be overshadowed by his comments on big tech and finance. As banks move much of their tech infrastructure to cloud-based services, regulators are questioning the wisdom of a handful of companies including Amazon, Alibaba, Google and Microsoft supplying cloud infrastructure to banks while also becoming significant players themselves in financial services. "His remarks could also signal a new front in the tussle between European authorities and US tech groups, which are already being subjected to intense scrutiny by EU competition authorities and moves to extract more tax from their European operations. When asked whether the ECB was considering regulating big tech groups that have moved into financial services, Mr Rehn said: We see big tech is moving in there,' adding that it was 'currently a matter for discussion among financial supervisors'."

HSBC plots return to Brazil as new chief targets growth

LAFFERTY BENCHMARKING

Garanti Bank scored four stars and HSBC and Spar Nord scored three stars in the 2018 Lafferty Banking 500. The maximum score is five stars.

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