Changing Finance: new this month – May

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.

Legislation, legislation, legislation

Perhaps the most important Bill in the Queen’s Speech of 10 May was the Financial Markets and Services Bill. At its heart is a proposal to make regulators cheerleaders for the financial sector through a legal duty to promote ‘international competitiveness’. Here’s why competitiveness is a bad idea that threatens to set the scene for another financial crash, as over 50 economists have warned in a letter to the Chancellor. Is this pay-off for the Tories’ big City donors?

The Bill also matters for the climate, which is why Aviva has backed calls for a climate mandate for regulators instead. A financial inclusion objective is another good idea.

The Bill includes some provisions to protect access to cash. And the Queen’s Speech also includes the long overdue Economic Crime Bill, and a Bill to establish the UK Infrastructure Bank.

However, the government ditched plans for audit reforms, just as KPMG reminds us why reform is necessary by receiving a fine for forging audit documents.

Meanwhile, there’s more discontent at the Financial Conduct Authority, where staff are striking over pay and working conditions.

The climate crisis

HSBC is in more hot water after its adverts were found to be greenwashing. And there’s more climate shame for Barclays, which is big on beef and burning fossil fuels. Perhaps that’s why one-fifth of its shareholders rejected its climate strategy. Sadly, investors at three top US banks – Wells Fargo, Bank of America and Citi – haven’t backed investors’ climate proposals.

Meanwhile, London comes top of the latest edition of the Global Green Finance Index.

Shocking fact: the greenhouse gas emissions from financial investments by big tech companies like Disney are sometimes bigger than the impacts of all their activities.

Phew – the High Court has ruled that charitable trusts don’t have to focus on maximising returns, but can make their investments with climate in mind.

Who benefits (and who loses) from the financial system?

The closure of branches and ATMs risks cutting adrift those reliant on cash, warns Which?

Trillions of dollars are bypassing black-run investment funds.

Meanwhile, the boom in City bonuses risks driving up inequality, says the Institute for Fiscal Studies. This is part of a long-term problem: income from dividends has increased by 142% over the past two decades, compared with a rise of only 45% for income from work, according to Common Wealth.

Find out which countries are most favourable to those who want to dodge tax and launder money – this year’s Financial Secrecy Index is out. But will the Swiss (finally) improve their banking privacy (secrecy) laws?

More shame for Barclays, who have used a tax dodge in Luxembourg to avoid £2bn of tax.

Also…

Why the UK joined the race to woo the crypto industry.

How shadow banks threaten the global economy.

ESG investing is missing the realities of market power in an age of corporate concentration and rising profits: an FT opinion on the failures of stakeholder capitalism.

Here’s an episode of BBC radio’s Costing the Earth on ethical investing and banking – How green is my money?

And finally…

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