Changing Finance: new this month – June

Our monthly round-up of news, ideas and initiatives related to transforming the UK financial system for people and planet, compiled by the Lab’s CEO, Jesse Griffiths.

A whole lotta regulation goin’ on

The most important bill in the Queen’s Speech was the Financial Services and Markets Bill – a bumper collection of financial regulation changes. What do we know about it so far? The Treasury Select Committee is the latest to warn against an ‘international competitiveness’ mandate for the UK’s financial regulators, which is embedded in the Bill.

Here’s why Buy Now Pay Later must be regulated, now. The government plans to do so – but Martin Lewis says it’s taking far too long, particularly as one-third of users already can’t afford repayments. Maybe Klarna’s problems are a sign of a coming recession.

Uh oh – Ministers are watering down audit reforms.

There’s been a 40% rise in automated push payment fraud (or APP, where criminals pretend to be someone you know) so the government plans to introduce new regulation. It also plans to overhaul consumer credit legislation. But will that really be enough, given more and more people are turning to high cost lenders?

The climate crisis

The Bank of England’s climate ‘stress tests’ show the financial services industry will lose hundreds of billions more if climate action comes too late. Financial firms and individual savers also face a huge financial hit due to ‘stranded assets’ – when the climate transition causes oil and gas assets to lose value (new research).

Here’s how the overhaul of insurance regulation in the UK – a global insurance centre – is ignoring climate risks. Thankfully, 39 insurers have stopped insuring new coal power projects but a few remain, led by Lloyd’s of London.

Bankers think total transformation is needed for banks to become fit for purpose in response to the climate crisis, says our new report. Should bankers’ pay therefore be linked to climate risks? The Basel Committee, the global banking regulator, thinks so.

Greenwashing allegations are bringing ESG investment to a reckoning. But are regulators cracking down on greenwashing? Here’s why they need to. Unfortunately, new criteria for membership of GFANZ have been slammed as greenwashing as they still allow fossil fuel investments.

Here’s a new update to a great tool for finding out which banks back fossil fuels.

The darker side…

Will the new Economic Crime Bill crack down on dirty money? Here’s a credible manifesto for tackling economic crime.

Sadly, the long-awaited Law Commission recommendations on corporate criminal liability – crucial for tackling money laundering – have been branded ‘unambitious, uninspiring and insipid’ by MPs.

Here’s a new exposé of the lobbying power of big finance.

Is the era of bumper City bonuses back?

Billionaires made more in the 24 months of the pandemic than they did in 23 years. (Though they have lost a lot so far this year.) But some millionaires are demanding: ‘tax us now!’ (Just as the UK admits it has no clue how much tax is being evaded through offshore accounts).

… and hopeful alternatives

Think shareholder-ownership is the only successful model for running a business? Think again – here’s a great new report on diversity in business ownership and governance and why this is important.

So, are credit unions a real alternative to banks?

Also…

Central bankers at the BIS say crypto risks are now materialising. Regulators are going to introduce capital rules for crypto. But does the recent crypto collapse mean dreams of decentralised finance are already dead?

UK credit card debt is ballooning for the wrong reasons.

Here’s the first strategic plan from the new UK Infrastructure Bank.

And finally…

A shocking tale of hunger, inequality and food prices in the developing world.

Sadly, inflated methods of counting loans and private investment mean  overseas aid statistics are not credible. Here’s why this matters.

How nudge theory is blocking the path to progress.

The biggest ever four-day week trial has been launched, involving companies across the UK.

And an interesting tale of quitting a 30-year City career and joining Extinction Rebellion.

What if monopoly were played by realistic rules?