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Home » Daily Briefing » Daily briefing - 17 October 2018

Daily briefing - 17 October 2018

More than two years ago, our bank benchmarking service noted that only two banks in a global selection of 100 reviewed made any mention of climate change. That's all about to change. This week, the Bank of England introduces a regime equivalent to the 'responsible manager', but for climate action. On Monday, according to the FT, the bank's Prudential Regulation Authority told boards of banks and insurers to "identify a senior executive to take charge of managing climate-change risks and report to the board -- or face consequences". Will banks take this seriously? (One potential answer is contained in the final paragraph of this briefing.)

Tap and go adoption in the UK sees contactless payments overtake chip and PIN transactions for the first time. Steve Newton, Worldpay EVP said: "The rise of contactless is part of a bigger story: it's not simply about tap and go — it's about convenience and reducing the parts of the shopping experience that customers find irritating, like queuing and waiting to pay. Over 50 percent of shoppers believe that their phones could replace their wallets within the next five years — the phenomenal growth of mobile contactless is a leap along this path. With the added benefit of 'limitless' transactions and biometric security offered by mobile wallets, our smart phones could be the key to the next frontier of frictionless commerce."

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The wily Canadians today decriminalise cannabis entirely, having already seized control of the global market for cannabis pharmaceutical research, and are now legally selling medical cannabis to pharmaceutical companies in the United States who cannot obtain it in their own country. As cannabis possession remains illegal under US federal law, US banks have been unable to service medical cannabis businesses. But US credit unions are stepping into the breach. The GFA Credit Union of Garnder, Massachussetts will from this month offer banking services to cannabis businesses, according to its chief executive Tina Sbrega. Ms Sbrega told the Boston Globe that GFA is "analyzing the cannabis business as a legal business that needs such recognition and that, the lack of banking services, gives a tremendous public safety issue in the state's communities. As of the 1st of October 1, GFA will provide services such as cash management, checking accounts, payroll, wire transfers, and bill payments."

More news this morning on Scandi money laundering scandals, but let's give the hot news a break and look at some underlying problems. Anthropology professor David Graeber — author of the excellent book Debt: The first 5000 years — is sadly little read by people in the financial industry, who have a bafflingly incomplete understanding of financial history. A few years ago, Graeber began investigating why so many workers admitting to "doing nothing" at work, and his investigations led him to this conclusion: the financialization of the global economy over the past 30 to 40 years, and the attendant profits, means that half the people in the world must be kept busy in meaningless jobs. As a consequence, there has been a vast rise in the numbers of people employed in middle management, who create administrative tasks for other workers. Bankers may be particularly interested in the section on 'boxtickers', which seems to accurately describe compliance officials who spend their days ticking boxes on forms that no one will ever look at, and on which no action will ever be taken. Also, David Graeber is very funny in the nerdiest way possible.

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