Included in this week's edition of InCredit: 'Dear CEO' letter sets out FCA expectations for debt packager firms; FMLC paper looks at impact of Brexit on UK and EU data protection regimes and Chair of ECB supervisory board gives speech on banking supervision 


UK

FIA responds to BoE/PRA/FCA discussion paper on operational resilience

The Futures Industry Association (FIA) published their comments to the Bank of England, Prudential Regulation Authority and Financial Conduct Authority on their discussion paper about building the UK financial systems operational resilience. In summary, the FIA supports the key objectives of the proposals in the discussion paper, namely to promote business continuity and to maintain confidence within the financial sector in the event of a disruption to services.

FIA, 8 October 2018

Office of Financial Sanctions Implementation publishes annual review for 2017-18

The Office of Financial Sanctions Implementation (OFSI) published its annual review for April 2017 to March 2018. It provides an overview of OFSI's activities in 2017-18, as well as looking to the future. The review includes sections on UN and EU financial sanctions regimes, UK counter-terrorism asset freezes, frozen funds review, compliance and enforcement, licensing, and raising awareness.

OFSI, 5 October 2018

Building Societies Association publishes guidance on revised UK Corporate Governance Code

The Building Societies Association (BSA) published guidance for building societies on the revised UK Corporate Governance Code (UKCG Code), which was issued in July 2018. The guidance for building societies follows a ‘by exception’ approach, in that it refers only to those elements of the Code which are either not considered to be relevant to building societies, or which raise particular issues for building societies considered worthy of discussion.

BSA, 5 October 2018

UK Finance and FMB launch guide to development finance for SME house builders

SME house builders are to be given help in navigating the development finance process and accessing the funding they need, following the publication of a new guide by UK Finance and the Federation of Master Builders (FMB). The guide offers practical advice to smaller house builders on how they should present their project to lenders to improve their chances of success, as well as the alternative options available if an application for finance is turned down.

UK Finance, 5 October 2018

'Dear CEO' letter sets out FCA expectations for debt packager firms

The Financial Conduct Authority (FCA) published a "Dear CEO" letter which sets out their expectations of debt packager firms providing debt advice and counselling services. The FCA uses this letter as a reminder to those using the 'debt packager model' of the expectations the FCA has in regards to the fair treatment of customers.

FCA, 5 October 2018

FMLC paper looks at impact of Brexit on UK and EU data protection regimes

The Financial Markets Law Committee published a report on the issues of legal uncertainty arising from the Data Protection Act 2018 when the UK leaves the EU. The paper outlines the ways in which these will be significantly impacted by Brexit and touches upon the ways in which the uncertainties in respect of the processing of personal data identified, if unresolved, may undermine risk management, the adequate pricing of financial products, operational continuity and the prevention of fraud. 

FMLC, 4 October 2018

Worldwide

Chair of ECB supervisory board gives speech on banking supervision

Danièle Nouy, Chair of the Supervisory Board of the European Central Bank (ECB) gave a speech entitled "The Financial Market as a Global Village: integrated, innovative, international" where she talks about the single supervisory mechanism and its role in connecting regional and global banking levels.

ECB, 4 October 2018

ECJ gives judgment on interpretation of ‘payment account’ under the PSD

The European Court of Justice (ECJ) published their response to a request for a preliminary ruling concerning the interpretation of Article 4(14) of the Payment Services Directive (PSD). Two Austrian entities, the Federal Chamber of Workers and Employees (having legal standing in order to assert consumers' interests) and ING-DiBa Direktbank Austria made the request to determine whether the standard terms and conditions of the contracts offered by that bank was lawful.

ECJ, 4 October 2018

ECB working paper: A structural model to assess the impact of bank capitalization changes conditional on a bail-in versus bail-out regime

The ECB published Working Paper No. 2181 as part of its Working Paper Series. The Working Paper sets out a structural model for valuing bank balance sheet components such as the equity and debt value, the value for the government when the bank is operated by private shareholders including the present value of a possible future bailout, the bailout value incurred by the government following the abandonment of the private shareholders, and, moreover, some price and risk parameters, including the funding cost spread and the banks’ probability of default.

ECB, 3 October 2018

European Banking Authority's updated Q2 2018 Risk Dashboard shows progress overall but bank profitability still a concern

The European Banking Authority (EBA) published its updated Risk Dashboard, showing data for Q2 2018. Capital ratios remain high, the downward trend of the ratio of non-performing loans to total loans was maintained, average return on equity rose in Q2 2018 but profitability remains a concern, and the ratio of loans to deposits reached the lowest value since 2014.

EBA, 8 October 2018

Key contacts

Amanda Hulme

Amanda Hulme

Partner, Head of Financial Regulation
London

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Lorna Finlayson

Lorna Finlayson

Partner, Financial Regulation
Edinburgh

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Rosanna Bryant

Rosanna Bryant

Partner, Financial Regulation
Leeds, UK

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