Dear <<First Name>>
Here's my January round up of the latest news, ideas and initiatives related to transforming the UK financial system for people and planet. I hope you enjoy it!
(De-) regulation battleground
The UK government has (re-) launched the biggest shake-up of financial sector regulation for a generation in the ‘Edinburgh reforms’ – prompting the Bank of England to warn against too much deregulation. Other experts say the package is a dangerous mistake. Could this let risky banking rise again? This is how this deregulation can drive monopoly power. Overall, as the Lab has detailed, we should be very worried as this could increase the risk of a future financial crash.
Might we finally get rules that can hold company executives accountable for economic crime?
Why the legal sector isn’t playing its part in preventing money laundering.
Many big financial firms are not ready for the new ‘consumer duty’ rules to enhance consumer protection.
Here’s why 'Solvency II’ insurance sector reforms are not really about ‘releasing billions for investment’ as the government has claimed. The Bank of England has warned that they actually increase risks.
Perhaps we should do something about the revolving door between regulators and the industries they regulate.
Global regulators are turning their attention to risks outside the banking system and the Bank of England is going to stress-test hedge funds and private equity.
Inequality on our doorstep
The super-rich (top 1%) have taken almost two-thirds of all new wealth in recent years, and the number of UK billionaires is up 20% since the pandemic. It’s been a record year for millionaire bankers in the EU too. But some millionaires are calling for higher taxes - on themselves.
Meanwhile, the cost-of-living crisis has helped credit card borrowing to soar to its highest level since 2004. Here’s an informative FT thread on the impact of austerity and its contribution to current woes. Perhaps there should be a fair debt write-down.
Why do asset managers love to fund authoritarian regimes?
More worrying news about the next crisis
Investors are keeping a keen eye on which financial market will cause big problems next. Could it be PCP (personal contract purchase) car loans that spark the next crisis?
A new report says there will be a banking crisis worse than 2008 if the City doesn’t prepare for the value of fossil fuels to collapse.
The regulator estimates 750,000 households are at risk of mortgage default.
Why crypto should be regulated like gambling, not banking.
A new climate?
Increasing extreme weather means the cost of catastrophe insurance is soaring, and some reinsurers are going bust.
More positively, HSBC says it will stop financing new oil and gas fields (though with caveats) and this is how bankers are restricting the boom in coal production. But 40 banks and financial institutions are financing climate-changing methane activities through meat and dairy. And only 10% of bank financing for energy is supporting renewables.
Did asset managers use their board votes to support climate action in 2022?
A new report lays out how poorly members of GFANZ – aka the Glasgow Financial Alliance for Net-Zero – are performing. Only a few have adopted meaningful policies to restrict new fossil fuels.
The net zero Tsar has been pretty scathing about the UK government’s approach to green investment.
And finally…
Millennials are breaking the oldest rule in politics and refusing to become more conservative as they age.
Here’s a really interesting and useful tool for finding out who funds your MP.
And you may enjoy these natty graphs telling us what is happening with international aid.
I hope that you enjoyed this month's edition - any feedback is welcome.
Best wishes
Jesse
Jesse Griffiths, CEO, Finance Innovation Lab
Mobile: 07740 264 639 | Twitter: @JesseLGriffiths
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