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Sam Woods, the Deputy Governor of the Bank of England, has said he would front-run global rules if necessary to avoid Britain's banks building up big exposures to crypto assets that were not backed by sufficient capital. Woods described controversial rules on crypto assets proposed by the Basel committee, the global standard setter for banking regulation, as “quite sensible.” The rules, which would require banks to hold capital in reserve equal to their bitcoin exposure, could prevent the majority of lenders from participating in the crypto space. “At this point our banks don't have material exposures to crypto but you can see over time, there is an investor appetite and not just retail, also institutional investor appetite to have a little bit of this stuff,” Woods said.

 

Reuters

City A.M.

The Pensions Regulator (TPR) has told the trustees of smaller defined contribution (DC) pension schemes they must either demonstrate they provide value, or wind up. TPR will bring in new regulations from next month, which include more rigorous value for money assessments. The new rules mean trustees of DC schemes with less than £100m in assets must compare their scheme’s costs, charges and investment returns against three other schemes.

 

FT Adviser

Money Marketing

Following a report by a committee of MPs into the Greensill Capital debacle, the Chancellor has ordered a review of third-party regulation along with rules on who can acquire the ownership of a bank.

 

Financial Times

 

As China moves to protect markets against the fallout from Evergrande's debt crisis, major western banks have sought to calm fears over their exposure to the property giant, which was due to pay a $83.5m debt interest bill due yesterday. UBS said it faces “immaterial” risk while HSBC said it was not concerned. Standard Chartered and Deutsche Bank have expressed similar sentiments. The People's Bank of China released $17bn into its banking system on Thursday as part of ongoing efforts to stem contagion.

 

The Daily Telegraph

The European Central Bank (ECB) is planning new inspections at the banks it supervises to check their technology and their ability to generate profits, the ECB's top supervisor Andrea Enria said on Wednesday. Separately, an ECB study warns that banks in southern Europe are most exposed to physical risks stemming from climate change. "While European countries are similarly exposed to transition risk when looking at tail firms ... there are a few countries that show exceptional vulnerability to high physical risk," the ECB said.

 

Daily Mail

S&P Global Ratings calculates that reinsurers could be underestimating their exposure to natural catastrophes by between 33% and 50%. “Unmodelled risks and the inherent difficulties in attributing extreme events to climate change create the risk that climate change may not be fully reflected in reinsurers’ catastrophe modelling, particularly in the short term,” said Dennis P. Sugrue, S&P Global Ratings credit analyst. “We believe that those companies that take a more proactive approach to understanding and adapting their exposure to climate risk will be better protected against future capital and earning volatility linked to climate-related losses.”

 

Financial Times

Reinsurance News

Fossil fuel companies are suing governments for more than £13bn for taking climate and environmental action that could harm their profits. Five energy companies, including British companies Rockhopper and Ascent Resources, are suing governments through investor-state dispute settlement (ISDS), a legal process that allows companies to sue governments under international laws governing trade and investment deals. Climate campaigners Global Justice Now warn that the courts threaten governments' ability to take climate action and could “make a mockery” of commitments at November's Cop26 summit in Glasgow.

 

The Independent UK

JPMorgan Chase, Barclays, Citigroup and BNP Paribas are among major banks and investors piling billions of dollars of investment into oil and gas companies preparing to ramp up activity in the Arctic, despite many holding commitments to restrict fossil financing in the region.

 

City A.M.

The Bank of England has revised up its inflation forecasts, predicting it will rise above 4% and that high prices could last until April instead of the end of the year, lifting expectations of a rate rise early in 2022. The Bank’s Monetary Policy Committee voted to hold interest rates at 0.1% and to maintain current stimulus measures, but two members are now calling for support to be reined in. Analysts are now predicting that rates will climb to 0.25% as soon as February. A further increase to 0.5% is possible later in the year. Ruth Gregory, of Capital Economics, said: "The MPC is getting closer to raising rates. Our hunch right now is that the second half of the year seems more likely. But the clear risk is that it happens earlier."

 

Financial Times

The Daily Telegraph

The Times

Daily Mail

Britain’s economic growth has been brought to its lowest levels since pandemic restrictions were eased in March, according to the latest IHS Markit/Cips survey. Growth in private sector output slowed in August as firms struggled with severe shortages while costs rose at the fastest pace since the late 1990s. The flash composite purchasing managers’ index dropped to 54.1 in September from 54.8 in August. City economists had forecast a reading of 54.5. Chris Williamson, chief business economist at IHS Markit, said the data would “add to worries that the UK economy is heading towards a bout of ‘stagflation’, with growth continuing to trend lower while prices surge ever higher.”

 

Financial Times

The Guardian

Uber is to pay out millions of pounds in missed pension payments to UK drivers dating back as far as 2017 under a deal with the retirement savings watchdog. Uber added that its private hire drivers would now be auto-enrolled on to a scheme through which it would contribute 3% of earnings into a pension pot. Drivers can choose to contribute up to 5% of qualifying earnings but will be able to opt out. Uber has been forced to pay pensions and offer other benefits such as holiday entitlement to drivers after the Supreme Court ruled in February that they should be classified as workers, not contractors. The judgment is thought likely to set a precedent for similar platforms. Mick Rix, national officer of the GMB union, which agreed a recognition deal with Uber in May, said: “Uber’s pension scheme is a massive step in the right direction and will no doubt help thousands of drivers as they reach retirement age. GMB urges other platform-based operators to follow Uber’s lead.”

 

The Times

The Guardian

Daily Mail

The Sun

Andrew Monk, the chief executive of London-headquartered investment firm VSA Capital, has criticised UK government proposals for new staff to have the right to ask to work from home. He told the BBC that staff abuse flexible working, at least in financial services, and what these people really want is to work part-time on a full-time salary. VSA Capital, which employs about 20 people in the City of London, has pretty much all its staff back in the office, Monks told the BBC Radio 4 Today programme. "Obviously it varies from industry to industry, but in financial services it's more important to be in the office because it’s a very live industry." Commenting on the fact that some firms, such as PwC and Deloitte, have embraced flexible working, Mr Monk said audit work was taking longer as a result. He added that the time it takes for firms to set up a stock market flotation has jumped from three months on average to six.

 

BBC News

Research suggests that levels of anxiety, depression and stress among an organization’s employees can be raised when a troubled new worker joins the business. A study published online in the Administrative Science Quarterly finds that hiring a professional who was previously diagnosed with at least one of these ailments increases the incidence rate, or the number of co-workers at the new organization who develop similar diagnoses, by about 6.32%. The study examined 250,000 employees at 17,000 companies in Denmark between 1996 and 2015. “The paper looks at the spread of mental health disorders through an epidemiological lens,” said study co-author Julia Kensbock, an assistant professor at the Maastricht University School of Business and Economics in the Netherlands. Viewed from this perspective, she says, mental health disorders can spread from one organization to another through new hires.

 

Wall Street Journal

The Government has that plans to make self-employed people and small businesses keep digital records and report their income to HMRC every quarter have been delayed for a year following pressure from professional bodies. Making Tax Digital for Income Tax will now be introduced in April 2024. Lucy Frazer, Financial Secretary to the Treasury, said: “The digital tax system we are building will be more efficient, make it easier for customers to get tax right, and bring wider benefits in increased productivity. But we recognise that, as we emerge from the pandemic, it’s critical that everyone has enough time to prepare for the change, which is why we’re giving people an extra year to do so. We remain firmly committed to Making Tax Digital and building a tax system fit for the 21st century.”  

 

Financial Times

GOV

The Times

Small law firms will not have to contribute to a fund to help pay for the fight against economic crime, City A.M. reports. The Government’s Economic Crime Levy aims to raise £100m annually from anti-money laundering (AML) regulated organisations, including legal practices, banks and accountancy firms. But only those with revenues above £10.2m will be subject to the new tax.

 

City A.M.

Semiconductor shortages and commodity price spikes could cost global automakers $210bn in revenue this year, according to consulting firm Alixpartners. In May, the firm predicted automakers would lose $110bn in revenue and fall 3.9m vehicles short of production plans for the year. Now, Alixpartners predicts automakers are on track to lose production of 7.7m vehicles in 2021.

 

Daily Mail

Research has found that women are seen as more likeable and competent than men after similar failed attempts at humour, write Dr. Taly Reich, an associate professor of marketing at the Yale School of Management, and Dr. Sam J. Maglio, an associate professor of marketing and psychology at the Rotman School of Management and the University of Toronto Scarborough. When bad jokes are told in the workplace, observers are more likely to give the benefit of the doubt to a woman than to a man, the research suggests. “Even when jokes go south, people think that women are being more attentive to their audience than are men,” the authors write.

 

Wall Street Journal