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Home » Daily Briefing » Daily briefing - 1 December 2016

Daily briefing - 1 December 2016

coffee, drink, cafe, food

Lafferty News has been observing with interest the skirmishes as Basel IV proposals are finalised. On the one side, regulators, led by Stefan Ingves, argue that "some parts of Europe have persistently not fix their severe problems"; on the other, Frédéric Oudéa, head of the European Banking Federation, has made the case against heavier regulation, arguing stoutly that banks in the continent are innocent of ignoring, let alone disguising, structural weaknesses. But divisions are deepening at the global level: the incoming Trump administration dislikes regulation on principle and plans to do away altogether with Dodd-Frank, within which many global rules were enshrined. Time is running out before the Washington DC turnover in January, and agreement on Basel IV has fallen behind schedule.

Canadian banks are reporting results this week: the fiscal year fourth-quarter earnings reports come as the industry digests new regulations and the domestic economy copes with ongoing weakness in oil prices. Profits at Royal Bank of Canada, the country's largest bank, are down two percent year on year, thus falling short of analyst estimates when it comes to earnings per share: lower trading revenues are held to be responsible. Scotiabank meanwhile reported stronger results, with shares gaining as a result. CIBC and TD Bank report later today, and Bank of Montreal concludes the Big Five reports next week.

Mastercard has been blazing quite the tech trail since the summer, with recent announcements on experimental blockchain APIs, chatbots for banks and merchants, Selfie Pay for online shoppers and a deal with PayPal for NFC acceptance in the United States. Now it is partnering with Verifone to launch a point-of-sale financing app in Britain. Eligible customers paying for a purchase will be presented with an option to pay in fixed instalments. A Verifone executive told Reuters: "For the merchant it's an interesting value proposition because we're saying: we're going to give your customers a new way of financing their purchase that's private — they don't need to talk to anybody or do any credit checks". Meanwhile Mastercard has also filed four new blockchain patents with the US Patent and Trademark Office. And, in other news from the world of blockchain, Japan Exchange Group has unveiled a blockchain consortium.

The everyday consequences India's demonetisation policy — or "cash dash" as it has been nicknamed — continues to play out in the lives of one-fifth of the world's population. Interestingly, anecdotal evidence reports that old notes, despite losing their legal tender status, are still in use amongst small merchants. Might government diktat be stymied by human nature? The Modi government has certainly been bold, but will it prevail when success depends on so many people changing lifelong habits so profoundly overnight?

Brexit: Transatlantic cables may keep FX routed through London post-Brexit
Brexit: Full costs as yet unrevealed [Economist paywall]
Italy's top three banks 'systemically important', need buffer
Eight years after collapse, Iceland's Kaupthing looks to list bank
Incoming head of Raiffeisen emphasises continuity
UK asking currency supplier to find animal fat alternative

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