Capital Markets Corporate

January 8, 2021

Our Weekly Newsletter

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Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

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Mortgage lending surges to 13-year peak
Mortgage lending has surged to a 13-year high with more than 100,000 mortgages approved in November. While house purchases dropped in the spring as pandemic restrictions took hold, the Stamp Duty holiday sparked an increase of homebuying activity and helped home prices rise. According to building society Nationwide house prices in December were up 7.3%. A partner from Knight Frank adds that although the banks are increasingly eager to lend, many still haven’t worked through a backlog of applications that built up during the lockdown. (From BBC, 5 January 2021)

Bitcoin hits record high on 12th anniversary of its creation
Bitcoin has surged to a record high following rising interest from investors and the shift towards viewing cryptocurrency as a mainstream payment method. Its value quadrupled in 2020 and last weekend hit a new high of more than $34,800 on the 12th anniversary of Bitcoin’s creation. Supporters of the currency argue that it is supplanting gold as a store of value and with the US dollar at its lowest level since spring 2018, advocates of cryptocurrencies claim they protect against inflationary money-printing by central banks. (From The Guardian, 3 January 2021)

City firms scrutinise FCA’s light touch to SMCR 
Leading City law firms have criticised the UK financial regulator’s light-handed touch in implementing its flagship scheme for holding executives more accountable for their actions. The FCA has launched just 37 investigations under the Senior Managers and Certification Regime in the past five years. Lack of intervention from the City regulator has left decisions on whether to penalise senior executives at the door of firms themselves, according to lawyers. (From FT, 1 January 2021)

Launch of Pensions Dashboard delayed again  
The launch of the much-anticipated Pensions Dashboard has been delayed again, with a 2023 date now mooted. The tool, initially proposed by Chancellor George Osborne in 2016, is intended to help millions of people save for retirement by providing them with an overview of their savings through keeping track of each pension pot workers have opened over their career. (From The Times, 5 January 2021)

Banks’ profits lifted by SPAC boom 
A sharp rise in the use of Special Acquistion Companies (SPACS) lifted big banks’ earnings last year. Billions of dollars in fees earned by setting up so-called blank-cheque companies in 2020 helped elevate banks’ profits, highlighting how booming capital markets are helping them weather the coronavirus crisis. SPACs are often seen as an attractive alternative to a traditional IPO due to the process’s ability to reduce high listing costs. (From Private Equity News, 6 January 2021)

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