Financial Regulatory Forum

UK move to limit bank branches irks global lenders

 By Kirstin Ridley

LONDON, Feb 17 (Reuters) – A quest by British regulators to protect local taxpayers by pruning the branches of global banks is riling the industry and risks running roughshod over a principle of free movement within Europe.

Britain’s Financial Services Authority (FSA), which unilaterally published tough new liquidity rules for banks last year, is keen to stop banks operating in London from setting up branches. It prefers subsidiaries, which are easier to police.

This push for “subsidiarisation” has gathered steam since the collapse of Icelandic banks in 2008 left UK depositors empty-handed, shattering a European principle that national regulators will protect the interests of international clients.

While bankers have dubbed this drive “simplistic” and “troubling”, lawyers note the FSA needs to leapfrog a so-called passporting rule, under which banks are allowed to set up branches across the 33-nation European Economic Area (EEA).

“One … has to question whether there would, in fact, be sufficient appetite to agree such a change among the smaller (EU) member states, who could see a risk of being shut out of the major European financial markets,” notes Ben Kingsley, a partner at London law firm Slaughter and May.

UK’s top financial regulator quits

Summer departure

Summer departure

By Kirstin Ridley and Clara Ferreira-Marques

LONDON, Feb 9 (Reuters) – Britain’s top financial regulator announced he was to step down, surprising markets and casting doubt over the future of the Financial Services Authority and an overhaul of the sector.

Hector Sants, a former investment banker well-respected in the industry, will leave the FSA just after a general election widely expected to leave the opposition Conservatives in power.

The Conservative Party, a long-time leader in opinion polls, has said it wants to abolish the FSA and hand its banking supervisory powers to the Bank of England, saying the regulator failed to spot problems ahead of the financial crisis and was unable to avert a costly bailout.

BREAKINGVIEWS – Goldman bonus delay raises puzzling questions

– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By George Hay

LONDON, Jan 19 (Reuters Breakingviews) – Goldman Sachs is taking its time, but it’s not clear why. Employees at the investment bank are usually told their annual bonus a few days before full-year results. But even though shareholders will discover the total amount spent on compensation on results day this Thursday, staff must now wait until next week to hear their individual windfall.

Goldman’s own explanation for the delay is that the welter of new regulations in 2009 has caused some slippage in working out individual bonuses. The G20 guidelines and the UK’s 50 percent tax on payouts over 25,000 pounds mean banks have new shackles, while Goldman’s conversion to a bank holding company means its financial year ends in December instead of a month earlier.

UK authorities propose measures on OTC derivatives

LONDON, Dec 16 (Reuters) — Britain’s Treasury and Financial Services Authority proposed regulatory measures for over-the-counter derivative products on Wednesday, including higher capital charges for non-centrally-cleared trades.

The authorities published a paper to identify steps to address problems in management of counterparty risk and a lack of transparency in derivatives markets highlighted by the financial crisis.

“Given the importance of OTC markets to the UK economy (43 percent of the global OTC market is located in the UK), the UK has been leading the analysis of how these issues might be addressed,” the report said.

No plan yet to extend banker pay rules – UK’s FSA

LONDON, Dec 8 (Reuters) – Britain’s financial watchdog said on Tuesday it had no plans to alter existing curbs on bankers’ bonuses and remuneration, or to extend them beyond the banking sector, until it reviews the rules in the middle of next year.

The Financial Services Authority (FSA) said on Tuesday holding back on change would allow regulators to assess the impact of EU changes and the effects of a banking review published by City grandee David Walker.

The FSA, criticised for failing to address problems that led to a near-collapse of the banking system, laid out its new code of practice on pay in August, including a ban on entering into contracts with individuals which provide guaranteed bonuses for more than one year. [ID:nLC475859]

Draft UK bank law confirms tougher watchdog powers

Britain's Chancellor of the Exchequer Alistair Darling and his wife Margaret leave 10 Downing Street to attend the State Opening of Parliament, in central London November 18, 2009.       REUTERS/Suzanne Plunkett (BRITAIN POLITICS)By Huw Jones
LONDON, Nov 19 (Reuters) – Britain’s financial watchdog will have powers to claw back bank bonuses that breach globally agreed rules on remuneration and force hedge funds to provide data, a draft law published on Thursday showed.


Facing defeat, UK government targets deficit, bank pay

By Keith Weir and Matt Falloon
LONDON, Nov 18 (Reuters) – Britain’s Labour government promised on Wednesday to halve its huge budget deficit and curb bankers’ pay in the hope of reviving its popularity before a national election next year.


Britain’s financial reform faces carve-up threat

Britain's Prime Minister Gordon Brown (L) and Leader of the opposition Conservative Party David Cameron walk through the Members' Lobby of the Houses of Parliament before the State Opening of Parliament, in central London November 18, 2009.      REUTERS/Dominic Lipinski/Pool    LONDON, Nov 18 (Reuters) – Britain’s opposition Conservative Party said it would ditch the core of a financial sector reform bill if it wins power next year, but lawyers expect other parts such as curbs on bankers’ pay would be introduced.

New EU finance watchdogs seen muzzled on companies

By Jonathan Gould
FRANKFURT, Nov 18 (Reuters) – Three new pan European Union financial watchdogs being set up next year are expected to have limited powers when it comes to individual markets and companies, officials said.


Britain to make it easier to sue banks – government source

LONDON, Nov 16 (Reuters) – The British government will this week outline legislation allowing consumers to group together to claim damages from financial institutions that mislead customers over financial products, a government source said on Monday.