Reinventing the wheel (with more automation): In this speech, Governor of the Bank of England, Andrew Bailey, looks at innovations in payments and the challenges they bring. He examines the benefits and risks that so-called ‘stablecoins’ present and the considerations needed for their regulation. You can also read his thoughts on the concept of a central bank digital currency.
Payments after the COVID crisis – emerging issues and challenges: The Bank of England's Christina Segal-Knowles talks about changes to the way people pay for goods and services and the impact Covid-19 has had on that. She goes on to explore how digital currencies fit in and what central banks can and are doing in response to this innovation.
A financial system to support the recovery: As we move into the next phase of the Covid-19 crisis, FCA Chair Charles Randall discusses what kind of financial system is needed for the recovery of the UK's economy, and what kind of financial conduct regulator is needed to support that system.
Emergency regulation and learning from the coronavirus crisis: The first podcast by Chris Woolard in his role as FCA Interim Chief Executive discusses how the regulator's work has had to be reprioritised. There is an interesting section relating to the transition to a carbon neutral economy too [approx. 16min in].
Financial System Resilience: Lessons from a real stress; An interesting speech from Sir Jon Cunliffe, Deputy Governor of the Bank of England. He looks at how resilient the banking system has been during the current pandemic.
COP26 Postponed: The COP26 UN climate change conference set to take place in Glasgow in November 2020 which was postponed due to COVID-19 has been rescheduled. It will now take place in Glasgow from 1st to 12th November 2021 and in partnership with Italy.
The first lesson from the pandemic: state-of-the-art technology is vital: This blog from Pentti Hakkarainen, Member of the Supervisory Board of the European Central Bank takes a look at how banking in Europe has been coping during the Covid-19 epidemic. With the necessity to adapt quickly, it considers the issues of digital transformation; the need for a focus on operational resilience and cyber security, and for boards to fully understand the risks associated with innovative technologies.
Wake up to Money: Stephen Jones of UK Finance gives his perspective on the banks' response to the Government's Coronavirus Business Interruption Loan Scheme (CBILS) on the BBC's Wake up to Money on 1st April 2020. Stephen is interviewed from approx. 25 min into the recording.
Statement from the Bank of England: In these unusual times, this provides a good outline of the measures the Bank and PRA are taking to provide flexibility to help firms maintain their safety and soundness and deliver the critical functions they provide to the economy during the Covid 19 Pandemic.
Transforming Culture in Financial Services - Driving Purposeful Cultures: The FCA has published this discussion paper [DP20/01] which contains a collection of essays on purpose. The intention is 'to share insights, highlight the importance of the topic and encourage broader discussion so firms understand the importance of focusing on their own purpose’. It features a key essay on professionalism, written by the Chartered Bodies Alliance [read here], as well as an essay on purpose in Retail Banking, written by our own CEO Simon Thompson which can be read here.
Our approach to ensuring firms treat vulnerable customers fairly: A speech by Nisha Arora, FCA Director, Consumer and Retail Policy, in which firms are reminded that the regulator’s aim is to see its forth coming Guidance on the fair treatment of vulnerable customers embedded in firms’ culture, processes and practices. It looks like the revised Guidance will be consulted upon this Spring with a view to finalised Guidance being published later this year - see below news section for background to the Guidance.
It’s time to talk about money: A very accessible and interesting speech by Sir Jon Cunliffe, Deputy Governor at the Bank of England, on the future of money. He considers money in its physical cash form, as electronic ‘commercial bank money’ through to the concept of stablecoins. Should central banks leverage new technologies to provide new electronic forms of central bank money as a complement to existing physical banknotes? It’s a good read.
The Road to Glasgow: Speech by Mark Carney, Governor of the Bank of England, at the launch of the COP26 Private Finance Agenda.in which he states: “2020 must be a year of climate action where everybody’s in”.
Big Changes in Retail Banking: A blog from the Competition and Markets Authority (CMA) which takes considers the impact on customers of the banking reforms it introduced 2 years ago and takes a look forward to what further developments we can expect this coming year.
Penalties, remediation, and General Principles: Speech by Mark Steward, FCA Executive Director of Enforcement and Market Oversight, in which he discussing financial penalties as a deterrent, how it differs from the purpose of enforcement and offers some observations from issues arising from cases regulatory over the last 12 months, involving breaches of the General Principles.
Global regulation, local solutions: Thoughts from Nausicaa Delfas, Executive Director of International at the FCA, on the role of global regulators in ensuring firms can compete on a level playing field across jurisdictions, and in reducing opportunities for regulatory arbitrage. She also touches on what lies ahead for the regulator following the UK's withdrawal from the EU.
Sustainable Finance Factsheet: The EU has put together this simple but informative fact sheet outlining its commitment to three ambitious climate and energy targets by 2030.
Is this the decade of the Credit Union?: Speech by Charles Randell, Chair of the FCA, delivered at the National Credit Union Forum, in which he references recent research on unaffordable debt and highlights the work the FCA has committed to with a view to improving financial resilience and providing more alternatives to high cost credit.
Getting to the Core of Culture: John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, speaks about the importance of 'principled decision making and accountability' rather than relying exclusively on rules and policies, as the most effective safeguard against wrongdoing and unethical behaviour.
Regulation in a Changing World: This speech by Christopher Woolard, Executive Director of Strategy and Competition at the FCA, sets the context for why now is the time to consider what the future of regulation might look like. He outlines that, in addition to the anticipated consultation on Duty of Care [see below for background] and review of the Handbook, there will be an open invitation to all to engage with thoughts and ideas about the future of regulation, and a review of the Principles themselves.
Understanding Pay Gaps: An interesting speech by the Bank of England's Andy Haldene which gives some fascinating insight and statistics about gender and ethnic minority pay gaps.
Turning Technology Against Financial Crime: The FCA's Executive Director of Supervision, Megan Butler uses this speech to talk about on how technology can be used to detect and disrupt financial crime, and ultimately the criminals who seek to exploit the system. She refers to the establishment of the Analytics Centre of Excellence, an internal initiative to drive the use of data science, machine learning and AI across the whole of the FCA.
Machine Learning in UK Financial Services: An interesting blog by a team at the Bank of England which outlines the findings of a joint survey with the FCA in 2019 to better understand the current use of machine learning (ML) in UK financial services. This included the finding that the median firm uses live ML applications in two business areas, and this is expected to more than double within the next three years.
UN Principles for Responsible Banking: On 22 September 2019, 130 global banks became the founding signatories of the UN Principles for Responsible Banking yesterday at the UN General Assembly in New York. The Principles aim to promote sustainable and responsible banking - you will find our programmes cover these as green finance and professionalism in banking. For our response please see our news section.
Improving the suitability of financial advice: Although this speech by Debbie Gupta, Director of Life Insurance and Financial Advice Supervision at the FCA is aimed specifically at the financial advice community, there are some aspects which we might all usefully note. "Challenging misconceptions and client education is core to good advice. It is valuable. You are the experts. You will always know more than your client. And we expect your expertise to support your clients in this way. It is what we expect of the services you are paid to provide."
The future of regulation: AI for consumer good: Speech by Christopher Woolard, FCA Executive Director of Strategy and Competition which outlines recent findings on how AI is currently being used in the financial services sector as well as flagging the need for sound governance around the use of AI and machine learning. The FCA are working with the Alan Turing Institute to explore the transparency and 'explainability' of AI in the sector and we can expect more later in the year/start of 2020.
Open letter on climate related financial risks from the Governor of Bank of England Mark Carney, Governor of Banque de France François Villeroy de Galhau and Chair of the Network for Greening the Financial Services [NGFS] Frank Elderson. It outlines the role of central banks but reminds us that 'climate change is a global problem, which requires global solutions, in which the whole financial sector has a crucial role to play'. This was timed to highlight the publication of the NGFS Call for Action which is accompanied by a short explanatory video.
Avoiding the storm: Climate change and the financial system: Sarah Breeden, Executive Director, International Banks Supervision at the bank of England, adds her voice to the rallying call for firms to take climate change seriously and to take action now. This times with the release of the PRA's Policy and Supervisory Statements on Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change. You can also read our blog series on climate change.
Less cash, but not cashless: Speech in which Sarah John, Chief Cashier at the Bank of England makes it clear that ensuring that people can continue to choose to use cash isn’t something that the central bank can do alone. Sarah John also spoke at one of our events recently: you can watch this online
For anyone following the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services might find this webinar from our Australian colleagues at FINSIA helpful in digesting the final report and its recommendations. You may need to register to view.
Opening up and speaking out: As part of the FCA's ongoing focus to improve culture, Chris Woolard talks about why diversity and inclusion matter, and highlights the need for firms to understand non-financial misconduct, such as bullying and harassment, is still mis-conduct.
The Role of Regulation in Encouraging Good Culture: Andrew Bailey comments that the effectiveness of communication with consumers is a test of culture and that therefore they will seek to place trust in experts who can assist with advice and guidance on decisions on saving and investment.
Patrolling the Ring Fence: By 1 January 2019 the largest UK banking groups must have implemented ring-fencing – or separation – of their UK retail business from their international and investment banking operations. James Proudman of the Prudential Regulation Authority (PRA) looks at what these changes mean and how the regulator will police the ring fence to ensure these reforms make key financial services more resilient, and protect taxpayers from further bank bailouts.
Trust and ethics - a regulator's perspective: Andrew Bailey, CEO of the Financial Conduct Authority reminds us of the societal purpose of financial services.
Ideas and institutions: a growth story: Andy Haldane argues that the economy is undergoing a ‘Fourth Industrial Revolution’. He notes that raising levels of skills and training for workers is one way of limiting the costs of technological disruption.
Payments after PSD2: evolution or revolution: Karen McTeague, FCA Director of Retail Banking Supervision, talks about the opportunities created by PSD 2 and Open Banking, and in particular to remember it is an opportunity to demonstrate trustworthiness to customers.
Five years of macro-prudential regulation: Alex Brazier, Executive Director FSSR at the Bank of England, looks back at the creation of the Financial Conduct Authority, Prudential Regulation Authority and Finance Policy Committee and considers the challenges for the future including Brexit, household lending and the unbundling of banking services
Transforming culture in financial services: speech by Andrew Bailey, FCA Chief Executive, in which he reflects on culture within the sector, the regulator's role and expectations, and the importance of positive culture and diversity.
Ethics and Trust in Finance: a simple but effective recap on the importance of ethics and culture in our sector given by the Governor of the Bank of France.
Regulatory Priorities for Retail Banking: a thought provoking speech by Katrina McTeague, FCA Director of Retail Banking Supervision in which she discusses the need for increased competition and how this will benefit consumers.
RoboAdvice - an FCA perspective: A useful overview of the FCA's current line of thinking on Robo Advice given by Bob Ferguson, Head of Department, Strategy & Competition Division.
Research referenced by regulators
Professionalism: in 2018 the BSB published the output for its Principles for Strengthening Professionalism in Banking. This was a year-long project to explore ways of strengthening professionalism in the UK banking sector for the benefit of employees, customers, clients and wider society. CB:PSB and Institute colleagues actively participated in this project which can be found here.
Conduct: Financial Stability Board [FSB] toolkit for Strengthening Governance frameworks to Mitigate Misconduct Risk sets out 19 steps that regulators and firms can take to tackle the causes and consequences of misconduct. Tool 8 notes that ‘Individuals are subject to professional standards of competence and conduct in the discharge of their duties’.
Cryptoassets: In 2019 the FCA published two pieces of research looking at UK consumer attitudes to cryptoassets, such as Bitcoin or Ether. The research includes qualitative interviews with UK consumers and a national survey. Christopher Woolard, the FCA’s Executive Director of Strategy and Competition at the time, commented: 'This research gives us evidence we haven’t had before about how consumers interact with cryptoassets'.
The FSB is also developing a cyber lexicon aimed at ensuring clear and common understanding of the issues and threats in this field. It comprises a set of 50 core terms related to cyber security and cyber resilience in the financial sector.