BANKING

European Commission publishes Winter Economic Forecast

The European Commission published its Winter European Economic Forecast along with a press release. It covers the years 2016, 2017 and 2018 and includes data on gross domestic product (GDP) growth, inflation, employment and public budget deficits and debt, amongst others. These forecasts focus on all 28 EU Member States, the candidate countries as well as some non-EU countries. EC, 13 February 2017

Lending and savings up despite economic uncertainty

Building societies provided almost one in three mortgages approved in the final quarter of 2016.  Collectively they approved 109,543 new mortgage loans, up 7% on the same period in 2015.  Consumers saved less in Q4 than they did the previous year but balances still rose by £2.9 billion. Lending in 2016 as a whole was higher than in 2015 with mortgage approvals up by 13%.  Consumers had a total of 448,157 mortgages approved by the UK’s 44 building societies, to the value of £65.4 billion. Savings balances increased by £18.5 billion, up 79% on the amount in 2015. BSA, 13 February 2017 

Technical changes to automatic enrolment: consultation on draft regulations

A Department for Work and Pensions consultation seeks views on draft regulations which make two changes to the automatic enrolment process and will apply to employers due to become subject to automatic enrolment duties during 2017. The regulations provide for:

  • A change to the automatic enrolment duties trigger set out in legislation for these new employers (known as post-staging employers); and
  • The option for post-staging employers to defer automatic enrolment for their workers.

The consultation ends on 3 March 2017. Department for Work and Pensions, 10 February 2017

European Commission speech on international financial system

European Commission has published a speech given by Vice President Valdis Dombrovskis, European Commissioner for Financial Stability, Financial Services and Capital Markets Union (CMU), on the merits of upholding a strong international financial system. Mr Dombrovskis highlights the advantages of international regulatory co-operation and a common approach to financial regulation. He argues that the effect of lax regulation in one country can be to create conditions for inadequate regulation and contagion throughout the world. He suggests that the effect of financial centres such as New York, London, Paris and Frankfurt having very different rules would be:

  • Increased exposures to risks imported from jurisdictions with less stringent rules.
  • Increased expense for global financial institutions in complying with different legal requirements.
  • Greater incentives for financial institutions to engage in regulatory arbitrage.

Mr Dombrovskis states that a strong commitment to international regulatory co-operation and internationally agreed standards should underpin the future relationship between the UK and the EU. EC, 10 February 2017

Bank of England works with Anomali to improve threat intelligence capabilities

​The Bank of England FinTech Accelerator recently ran a proof of concept looking at innovative technologies that collect, integrate, hunt and investigate cyber security intelligence data. Following the successful completion of this proof of concept, the Bank has decided to continue to work with Anomali to monitor and mitigate efforts against cyber threats. Previously, the Accelerator has undertaken proof of concepts looking at a range of areas such as Blockchain, cyber resilience and data analysis. The Accelerator was launched in 2016 to work in partnership with technology firms to help us harness FinTech innovations for central banking. It offers firms the chance to demonstrate their solutions for real issues facing us as policymakers, together with the valuable client reference that comes with it. BoE, 10 February 2017

Finance & Leasing Association new figures

The FLA has released the following figures

  • The number of second charge mortgage repossessions was 144 in 2016, almost 37% lower than in 2015. In the final quarter of 2016, the number of repossessions was 39, up by 18% compared with the same quarter in 2015.The rate of second-charge mortgage repossessions, as a percentage of average outstanding agreements, has fallen from 0.34% in 2009 to just 0.07% in 2016.
  • Asset finance new business (primarily leasing and hire purchase) grew by 5% in 2016 – the sixth consecutive year of growth. New business in December 2016 fell by 13% compared with the same month in 2015. New business in the commercial vehicle finance and business equipment finance sectors was up 7% and 16% respectively in 2016, while new finance for plant and machinery was flat over the same period.
  • Continued growth in consumer finance for new businesses saw a 9% increase in 2016. New business in December grew by 2% compared with the same month in 2015. Credit card and personal loan new business together grew by 8% in 2016, while retail store and online credit new business was up by 2% over the same period. Second charge mortgage new business grew 4% by value, while volumes fell by 6%.

FLA, 10 February 2017

INSURANCE

Consolidated accounting and reporting requirements for entities in the UK and Republic of Ireland issuing insurance contracts

The Financial Reporting Council (FRC) has published a revised edition of the FRC's Financial Reporting Standard (FRS) 103 Insurance Contracts incorporates the amendments required under Directive 2009/138 (Solvency II) that were issued in May 2016. FRC, 13 February 2017