Capital Markets in Financial Services UK

The SSM six months on | How banks are getting on and what lies ahead

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The start of May marked six months of operation for the Single Supervisory Mechanism (SSM), the new framework for banking supervision in the Eurozone. The largest banks in the SSM have had their first taste of ECB-led supervision. The learning curve for them - and for supervisors at the ECB and national authorities - has been steep. And just as banks grapple with the task of responding to the new regime, the ECB has started tackling its supervisory priorities for 2015.

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Posted on 15/05/2015 | 0 Comments

Management information for conduct risk: Underpinning better decision-making

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Regulators are placing increasing emphasis on the management of conduct risk within financial services firms. Central to this is the right management information (MI). The importance of MI is also set to increase in the UK under the Senior Managers Regime (SMR) and Senior Insurance Managers Regime (SIMR), where strong conduct risk MI will help Senior Managers to demonstrate that they have taken reasonable steps to understand conduct risks and that they have put in place appropriate controls.

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Posted on 29/04/2015 | 0 Comments

Reporting requirements are expanding rapidly

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In recent years we have seen a seismic shift in the tax transparency landscape. The US Foreign Account Tax Compliance Act (US FATCA) has proved to be a watershed moment and we are rapidly moving towards a global network of automatic information exchange spearheaded by the OECD’s Common Reporting Standard (CRS).

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Posted on 14/04/2015 | 0 Comments

Automation will change the character of London businesses | How will Financial Services adapt to the new environment?

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Since the Industrial Revolution, technological advances have transformed business and commerce, and changed the character of jobs that people do. With the rapid progress of digitisation, a further period of major transformation is under way. London, its Financial Services industry included, will inevitably feel the change and will need to respond.

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Posted on 1/04/2015 | 0 Comments

EBA guidelines on limits on exposures to shadow banking entities

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On 19th March the European Banking Authority (EBA) issued a consultation paper which sets out its approach to limiting exposures from banks to the shadow banking sector, proposing that the large exposures regime be used to restrict exposures, in addition to existing Pillar II requirements.

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Posted on 26/03/2015 | 0 Comments

FCA Business Plan ǀ What firms can expect from the FCA in 2015-16

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Yesterday, the Financial Conduct Authority (FCA) published its Business Plan. Firms should read this document closely, as it outlines the FCA’s view on the key risks to its objectives, its priorities, and the activities it intends to undertake in 2015-16. 

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Posted on 25/03/2015 | 0 Comments

Senior Managers Regime ǀ Top Five Lessons Learned

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Her Majesty’s Treasury announced on 3 March 2015 that the commencement date for the Senior Managers Regime (“SMR”) will be 7 March 2016, and the Financial Conduct Authority (“FCA”) published its feedback statement on accountability on 16 March 2016. The timeline for commencement of the new regime is set; banks will have until 8 February 2016 to notify the Prudential Regulation Authority (“PRA”) and FCA of the names of all those, including people currently approved, who will be senior managers under SMR.

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Posted on 17/03/2015 | 0 Comments

The FCA's Coverholder and TPA thematic review | How prepared are you?

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As we near the outcome of the Financial Conduct Authority’s Coverholder thematic review, general insurance firms across the Lloyd’s and London market should consider how they stack up against regulatory expectations and current good market practice. Over the next month, we will be producing a series of short blogs covering some of the key elements of delegated authority control and oversight that we see the market currently designing and implementing:

Blog 1: Conduct risk assessments

Blog 2: Due diligence, audits and Management Information (MI)

Blog 3: Key market solutions and commercial challenges

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Posted on 16/03/2015 | 0 Comments

FCA competition study may come to have far-reaching implications for investment and corporate banking

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The Financial Conduct Authority (FCA) has announced that it will kick-off a market study looking at competition in investment and corporate banking services in spring 2015. This comes as part of its review into competition in the wholesale sector, published yesterday, and follows its call for inputs last July. The FCA has found that limited transparency over both price and quality may make it difficult for clients to assess the value for money of investment banking and corporate banking services, and that bundling and cross-selling of services may make it difficult for new or smaller firms to compete against the established investment banks and universal banks.

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Posted on 20/02/2015 | 0 Comments

Proposed revisions to the standardised approach to credit risk | More risk sensitivity, more complexity

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On 22 December, 2014 the Basel Committee on Banking Supervision (BCBS) published a consultation paper on “Revisions to the standardised approach for credit risk”(CRSA) (Footnote 1). The aim of the revised CRSA as proposed by the BCBS is to tackle weaknesses in the current approach, including:

• over-reliance on external credit ratings;

• lack of granularity and risk sensitivity;

• out-of-date calibration;

• lack of comparability across different banks and jurisdictions; and

• misalignment of treatment between the current CRSA and exposures risk weighted under the internal ratings based (IRB) approach.

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Posted on 4/02/2015 | 0 Comments