A new regulatory dawn?
The government is getting a lot of flak for its financial reform plans (not just its tax plans). ‘Call-in’ powers that allow governments to overrule regulators have been branded a ‘recipe for disaster‘ and the announced scrapping of the cap on bankers’ bonuses could fuel dangerous risk taking (and even surprised City bosses). The Chancellor wants a ‘Big Bang 2.0’ – the first big bang was the 1980s financial sector deregulation, which helped lead to the global financial crisis. But ‘now is not the time to water down financial sector regulation‘.
A competitiveness mandate for regulators could risk a new financial crisis, warns one Tory MP. This is why the old competitiveness mandate was removed from regulators in 2012. The new Finance for our Future campaign sets out an alternative agenda to make finance regulation prioritise the outcomes that matter, including climate and inclusion.
Proposals to remove rules that limit speculation on food markets are worrying. Instead, could we curb the commodity market speculation that is pushing up food prices?
Insurance reforms could be a bonanza for shareholders while a senior regulator has warned that the proposed insurance market deregulation puts savings at risk.
The UK is pushing crypto with light touch regulation while the EU has taken a different approach.
The removal of the Treasury’s top official also removes institutional memory of how to handle a financial crisis (and why deregulation helps cause them). Have we learned nothing since the collapse of Northern Rock 15 years ago?
Perhaps the government’s deregulation proposals belong in the past. Actually, the deregulation agenda could be a gift for Labour (but will Labour listen to the arguments against deregulation?)
At least the government seems to have given up on plans to review and potentially merge the financial regulators.
Meanwhile, morale at the Financial Conduct Authority (FCA) continues to tumble.
Inequality and exclusion on the rise
Rich Britons are near the top of global income levels, while poor Britons are near the bottom – fascinating analysis but unsurprising, as the UK is the most unequal advanced economy in Europe. Worldwide, the number of ultra-rich people keeps growing and wealth management is booming as the rich get richer (and markets become more unstable).
The cost of living crisis will worsen financial exclusion (pawnbrokers are doing very well) but banks are not prepared for this, as high street banks have chosen not to deal with the poorest in society. As few as 1% of their customers are struggling, and rising interest rates and other factors mean banks will be winners during the current crisis.
With a clampdown on high cost lenders, where will struggling households turn to get responsible credit? Marginalised communities, such as the traveller community, are set to fare worst.
Did you know that 99% of British workers are experiencing falling real incomes?
The climate crisis
Here’s a nice video on ESG and the struggle over what it means – the ‘war of the words’.
The brilliant Oil & Gas Policy Tracker website rating the fossil fuel policies of banks, insurers and investment firms has been further expanded. And here’s a scorecard for some of the biggest private equity firms.
How climate litigation can push up companies’ insurance costs.
The billion dollar outdoor clothing company Patagonia becomes a trust, with profits invested in fighting climate change.
2022 has been a year of dollar power – why the US currency is still at the centre of the international economic order.
Which high street banks do customers like most?
This is how sovereign debt gets restructured.
A new bill has been proposed to modernise the rules for cooperatives and mutuals.
Can an economic policy framework that is rooted in production, work and localism supplant one based on finance, consumerism and globalism?