In blockchain news...
Data released by the Reserve Bank of India shows a ten percent month-on-month drop in digital payments as Indians return to using cash. "The number of digital transactions fell from 1,027.7 million in December to 922.9 million in January," reported the Business Standard. Yet, within the data, some interesting patterns emerged; the use of credit and debit cards at the POS remained the biggest chunk of digital payments. "For example, the Immediate Payment Service, used to transfer money in an instant, saw [an] 18 percent increase in volumes in January," the report stated. "Similarly, the Unified Payments Interface (UPI)...was seen gaining traction. In November, only 0.3 million transactions happened through UPI. In December, the number of transactions rose to two million and, in January, it was 4.2 million."
Commentator Chris Skinner is alarmed that big banks will manage to undo PSD2 and its cousin, Open Banking, by claiming that the new protocols will enable fraud. Of course, banks have been worrying themselves sick for years about 'disintermediation', where an outside organisation gets access to the banks customers, data and so on. "Banks are scared," says Skinner. "They've seen the rise of the new world of open APIs, apps and analytics and know that their organisations are not yet ready or fit to change to that world. What to do? Well, the easiest thing to do is to block access to the bank's data. If third party fintech firms cannot get access to the customer's financial data, then you can severely limit what they can do." Expect then to see banks committing heavily to fighting fraud and trying to roll back open banking proposals under the guise of data protection. And, as Lafferty Councils heard in Cape Town recently, some senior executives are sceptical about the chances that European regulators will manage to implement PDS2 at all, especially as banks grow bolder about challenging capital requirements.
Skinner isn't the only one worrying. Danske Bank CFO Jacob Aarup-Andersen told Bloomberg that the final set of revisions to Basel III regulations look to be a bit "up in the air". In short, Aarup-Anderson suggests that any rollback of US banking regulation will have to be met by similar measures in Europe, where banks don't want to be bound by stricter regulation than their American counterparts. "What is important for us is very much that we get a level playing field, that we don't get a U.S. deregulation that is not followed up by European regulations as well," he said. One presumes he meant European deregulation.
In reality, European banking remains in turmoil, with interested parties paying keen attention to unfolding crises. The Financial Times today hails the new UniCredit CEO Jean-Pierre Mustier, who has apparently dazzled investors by arriving to London meetings on the Tube, carrying his own backpack — after getting rid of the bank's private jet. While Mr Mustier has not quite stooped to staying in backpacker hostels, he apparently saves time and money by eating on planes. UniCredit probably could have done without waiting ten years for this kind of parsimony, but a start is better than nothing. Other Italian and European banks are paying rapt attention to UniCredit, which is being seen as a kind of benchmark for Italy's NPL-strewn banking landscape. See also the UniCredit link at the bottom of this bulletin.
One of the main beneficiaries of the Trump presidency has been the American comedy show Saturday Night Live. It turns out that the most watched clip in America last weekend was comedian Melissa McCarthy's turn playing Trump's animated press secretary Sean Spicer. While actor Alec Baldwin has installed himself as Trump's tormentor-in-chief, it's McCarthy's scenery-chewing version of Spicer that had Americans in thrall. The thin-skinned president goes into a huff over Baldwin's glowering impressions, but expect Spicer's ready-to-explode mien and a cowering press corps to feature large in future episodes.
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