Banks, Financial

Banking app targets millennials who want help budgeting

Graduate debt, rent and high living costs have made it hard for millennials to save for a house, a pension or even a holiday. For Ollie Purdue, a 23-year-old law graduate, this was reason enough to launch Loot, a banking app targeted at tech-dependent 20-somethings who want help to manage their money and avoid falling […]

Continue Reading


Eurozone inflation climbs to highest since April 2014

A welcome dose of good news before next week’s big European Central Bank meeting. Year on year inflation in the eurozone has climbed to its best rate since April 2014 this month, accelerating to 0.6 per cent from 0.5 per cent on the back of the rising cost of services and the fading effect of […]

Continue Reading


Wealth manager Brewin Dolphin hit by restructuring costs

Profits at wealth manager Brewin Dolphin were hit by restructuring costs as the company continued to shift its focus towards portfolio management. The FTSE 250 company reported pre-tax profits of £50.1m in the year to September 30, down 17.9 per cent from £61m the previous year. Finance director Andrew Westenberger said its 2015 figure was […]

Continue Reading


Travis Perkins and Polymetal to lose out in FTSE 100 reshuffle

Builders’ merchant Travis Perkins and mining company Polymetal face relegation from the FTSE 100 after their recent performances were hit by political events. The share price of Travis Perkins has dropped 29 per cent since the UK voted to leave the EU in June, as economic uncertainty has sparked concerns among some investors about the […]

Continue Reading


RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

Continue Reading

Categorized | Banks

Berlin and Paris on collision course over EU banking rules

Posted on November 24, 2016

Germany and France are set to clash over a planned overhaul of EU banking regulations amid concerns in Berlin that the proposals fail to do enough to shield taxpayers from the costs of banking crises.

Berlin is anxious about a package of reforms unveiled by the European Commission on Wednesday, notably its proposal for how Europe should apply a new international standard for dealing with a large bank when it fails.

Senior German officials are concerned that aspects of the reforms would overly constrain bank supervisors. They want to preserve the freedom for supervisors to demand buffers that go beyond agreed international minimum standards.

The row is set to deepen an already sizeable split between national governments over the future direction of Europe’s banking union, an ambitious but incomplete integration project agreed at the height of the eurozone debt crisis to restore confidence.

Wolfgang Schäuble, Germany’s finance minister, has argued that further steps to build the banking union should be taken only once Europe has agreed on a tough regime of measures to reduce risks in its banks. However, Berlin thinks the Brussels package falls short in key areas.

Berlin’s stance over the rule, known as total loss absorbing capacity, or TLAC, is sharply at odds with that of Paris and Rome, which have pushed for inbuilt curbs on overzealous authorities to avoid European financial groups being put at a competitive disadvantage.

In his proposals on Wednesday, Valdis Dombrovskis, the European Commission vice-president responsible for financial policy, said authorities should be able to set tougher rules only if they could demonstrate that the extra requirements were “justified, necessary and proportionate”.

Within the eurozone, this would rein in the Single Resolution Board, or SRB, the currency area’s agency for handling failed banks, which was established last year.

The TLAC rule will force large banks to issue more securities that can be easily written off if they fail, so reducing any need for a taxpayer bailout. Central bankers, such as Mario Draghi of the European Central Bank and the Bank of England’s Mark Carney, have hailed the measure as a step towards ending the problem of institutions being “too big to fail”.

“We do think that the proposal needs to be improved substantially,” said one senior German official. “We definitely need more work in the risk reduction area.”

In addition to concerns about constraints on the powers of the SRB, Germany is worried by proposals from the commission for determining which types of bonds banks should be able to count towards their TLAC buffers.

The plans from the commission aim to set common rules on when debt should count as “subordinated” and so be eligible to count towards TLAC. Berlin, however, said that the approach chosen by the commission was too reliant on raising new debt, meaning it would take too long to reach targets.

Berlin’s assessment that the Dombrovskis proposals fall short of the “risk-reduction package” that it is seeking is bad for many eurozone governments, notably in southern Europe, that want to accelerate work on further developing the banking union.

The commission last year proposed a common eurozone system for guaranteeing bank deposits but the proposal has become bogged down amid national splits.

Similarly, France is keen for work to progress swiftly on setting up some kind of “public backstop” that could be tapped as a last resort if a large bank were to fail.