Capital Markets Corporate

May 28, 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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UK finance sector in top 10 for carbon emissions

If the UK’s biggest banks and investors were a country, they would rank 9th in the world for the carbon emissions they’re responsible for, according to new analysis by Greenpeace and WWF. The study assessed the emissions associated with the global investments of 15 British banks and 10 asset managers, responsible for 805 million tonnes of greenhouse gases. Greenpeace said this shows that the financial sector should be considered “high carbon” along with the oil and gas industry, coal mining, aviation and transport. A spokesman for UK financial institutions said they were committed to being net zero by 2050. (From BBC, 25th May 2021)

The pernicious potential of ‘buy now, pay later’ finance

While buy-now, pay-later finance has its benefits, such as user-friendly interest-free online credit, many warn against the normalisation of acquiring online exactly what you want when you want it, regardless of whether you have the money to buy it or not. Other downsides include interest charges on anything beyond very short-term credit, stiff penalties for missed payments, and fees to retailers meaning costs may be passed on indirectly. While companies like Klarna are formidable start-ups, industry bodies warn that BNPL finance needs more regulation in the UK and other markets. (From Financial Times, 24th May 2021)

UK businesses can unlock growth with green exports, says CBI 

British businesses could create 240,000 low-carbon jobs and boost green exports by billions of pounds to radically transform the UK economy over the next decade, according to the Confederation of British Industry. The UK’s business lobby group said businesses stood to gain from an “early-mover advantage” by leading a campaign to decarbonise the global economy. Alongside decarbonisation, it was added that innovation, growing trade, and levelling-up Britain’s regional economy could unlock commercial growth opportunities worth £700bn by 2030. (From The Guardian, 24th May 2021)

Hedge funds flood into private companies

Hedge funds are rapidly scaling up their investments in private companies. The increase in bets in private firms can be partly attributed to fund managers moving away from assets that may be susceptible to price falls amid a sustained period of high inflation. Investing in private firms’ carries greater risk than owning shares in public companies, but they can yield higher returns. (From Private Equity News, 26 May 2021)

Update processes within one month, urges Pensions Ombudsman 

The Pensions Ombudsman has warned it expects pension providers to update their internal monitoring controls within one month of new regulatory compliance guidance being issued. The timeframe is a sharp contraction of the previous three-month grace period the PO’s gave pension providers to update their due diligence and pension-transfer process. Moving to shorter implementation period has been partly driven by the PO’s concerns that providers are not taking consumer protection seriously enough. (From FTAdviser, 26th May 2021)

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