Capital Markets Corporate

October 26, 2018

Our Weekly Newsletter


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.

Inside The Secret Lives Of Central Bankers

An anthropologist has spent 20 years studying the customs, beliefs and rituals of the world’s central bankers, concluding that these architects of the global economy consider their trait of detachment to be an asset. However, the study also found that “high-mindedness” comes at a cost, as many bankers have found when they are caught in the middle of tricky party-political situations. (From The New York Times, 20 October 2018)

The Cryptocurrency “Flippening”

Over the last year, many crypto enthusiasts predicted that Ether would overtake its rival Bitcoin to become the world’s most valuable cryptocurrency. However, in a major turn of events, both currencies ended up flopping. Commentators have now coined this phenomenon “The Flippening”. Will the flip-flop continue into 2019? (From Financial Times, 19 October 2018)

NASA Says Quantum Computing Is The Future Of Investing

A forthcoming NASA report investigates the efficiency benefits that quantum computers could bring to investment portfolios. The paper highlights how asset managers can use quantum computers to make investment decisions, for example by finding the perfect balance of risk and return. (From Financial Times, 20 October 2018)

Combatting Bank Payments Fraud

In the latest attempt to tackle bank payments fraud, Pay.UK – the operator which oversees the country’s major payments systems – is introducing a long-awaited change to online banking verification to help ensure that bank transfers are sent to the correct account. Banks will be required to check that an intended recipient’s name matches their account holder’s records when customers seek to transfer money. (From BBC, 18 October 2018)

No Fees Included In Free Pensions Statement

A new, simplified pension statement – intended to help savers better understand how their retirement pots are growing by providing clear and personalised information – has come under increasing scrutiny for not including relevant information on fees and charges. The two-page annual statement was developed by an industry group and endorsed by the FCA and the Pensions Regulator. (From Financial Times, 19 October 2018)

The UK Financial Services Industry – A Regulatory Minefield Post-Brexit?

Last week POLITICO hosted an event, ‘UK Financial Services industry: shaping the new trajectory’, which saw regulators, (former) British politicians, European politicians, consultants and financial professionals come together for presentations and roundtable discussions on the ‘regulatory battlefield’ on the post-Brexit horizon.

Kicking off the evening, Valdis Dombrovskis, Vice-President of the European Commission (EC) assured the audience that despite rumours of a no-deal Brexit, the EC was very much committed to securing an agreement. He stressed that UK financial institutions have had two years to think about what impact a departure from the EU might have on their day-to-day operations. He also noted that companies did not have to wait on a sign from the regulators to be able to make a move.

Afterwards, Olivier Guersent, Director General of FISMA, Mark Hoban, chair of the International Regulatory Strategy Group and former Financial Secretary to the Treasury, and Kay Swinburne, Vice Chair of the European Parliament’s ECON Committee, took part in an animated discussion where they shared their disparate views on Dombrovskis’ intervention.

A forthright Kay Swinburne, in particular, challenged the EC’s view that companies have had a lot of time to prepare. She noted that the debate around the future of clearing contract continuity has no precedent and expressed worries about a ‘cliff edge scenario’. All three agreed that ongoing efforts were needed to reach global regulation, with local regulators already looking into this – regardless of the final shape and form of the Brexit deal.

Journalists in attendance from both POLITICO and Reuters characterised the EC view as overly relaxed in articles the following day, stressing that promises of a report from the EU technical working group on financial services before the end of October were unlikely to be fulfilled, not least due to the delays to the overall Brexit agreement.Creds Button