Shocks & Stares » Financial Services http://blogs.hillandknowlton.com/shocksandstares H&K\'s Financial & Professional Services Team Blog Tue, 19 Mar 2013 08:00:56 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 The acceptable face of economic debate? http://blogs.hillandknowlton.com/shocksandstares/2012/04/the-acceptable-face-of-economic-debate/ http://blogs.hillandknowlton.com/shocksandstares/2012/04/the-acceptable-face-of-economic-debate/#comments Wed, 04 Apr 2012 11:18:01 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=632 THIS POST IS BY JOSHUA GLENDINNING

Angela Knight, head of the British Banker’s Association, is to step down after five years at the helm of the industry body. Knight has led something of a charmed life in what would be seen by many as an invidious position in an adverse political climate for the financial services sector. While the former Tory MP doesn’t garner respect from all political quarters, she is certainly admired by many within the financial services sector for her ability to speak on behalf of the industry. According to The Guardian, she has given over 800 broadcast interviews, and travelled over 14,000km to and from Brussels alone since 2006. For those working in the City, it has been preferable to have such a shrewd political operator speaking on their behalf rather than having to face the ire of public opinion themselves

Knight’s time at the BBA has been indicative of a broader trend within politics and the media. Despite frequent media brickbats, those within the financial services sector are often far better able to carve themselves positions of political and intellectual authority than many other would-be commentators. Ultimately, the BBA is little more than a lobbying organisation for its members and yet Knight has been able to assume an air of authority within the media which would not be accorded to many others in similar positions.

For example, Unite General Secretary Len McCluskey may have been making political waves this week but he is unlikely to be asked on most news programmes to talk on subjects that don’t explicitly affect his members. (Incidentally, for an interesting insight on the man who appears to have the ability to turn the government and subsequently the public into Corporal Jones from Dad’s Army, listen to Profile on Radio 4). Knight, on the other hand, has been frequently asked to discuss broader social and economic issues, as well as more obvious areas such as the reform of the banking sector.

The financial crisis (or perhaps Robert Peston) has increased public interest in the financial services sector to a level previously unseen. However, outside of personal finance, many commentators in possession of a sufficient degree of technical knowledge are also industry insiders. The adversarial exceptions to this rule (for example, here and here) lack experience at conveying their views to the new audience which has invaded their previously arcane and quiet cloister of political debate. Unlike construction, manufacturing or even many service industries, the products of financial services are almost entirely intangible and the sector is therefore assumed to be too complex or too boring for most people to understand. The upshot is that media discussion is divided between either popular yet infantile anger or sophisticated yet sterile analysis.

‘The acceptable face of British banking’ may not be missed by all, but the reputation she has built for herself is certainly instructive for any company or organisation wishing to make an impression on the media.

]]>
http://blogs.hillandknowlton.com/shocksandstares/2012/04/the-acceptable-face-of-economic-debate/feed/ 0
FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/10/fps-friday-fiver-22/ http://blogs.hillandknowlton.com/shocksandstares/2011/10/fps-friday-fiver-22/#comments Fri, 14 Oct 2011 14:48:34 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=354 Hello All, and welcome to a surprisingly sunny Friday in central London. There’s certainly not been a shortage of financial services and politics related stories this week, and we’ve tried to give you a flavour of some of our favourites below. Thanks as ever to Ed Jones and Jonny H for their contributions.

TAXING TIMES…..Barely a week goes by without the EU sparking controversy on our idyllic isle. Among other things it was the EU’s proposed financial transaction tax causing consternation. As noted by the Telegraph this week, John Cridland said: “The likely effect of many of Brussels’ current proposals will be to damage the UK’s prospects for growth. Nowhere is this more acutely the case than for professional and financial services, which are being bombarded with unwarranted regulation.” He went on to describe the proposals as “a Brussels revenue-raising exercise, and one that will hit London disproportionately hard”. He didn’t stop there though, also slamming Brussels’ plans for Solvency II…

Cridland’s point was very clear - this will lead to the demise of London as a financial centre, to be overtaken by the perennial competitors New York, Singapore and Hong Kong. Sad times.

A TOUGH WEEK FOR GOLDMAN…..A lot of people like to have a dig at Goldman Sachs, but the first time in a while investors now have a reason to complain as well. It’s been a grim week for the world’s premier investment bank. Having their name dragged back into the mud following Raj Rajaratnam’s sentencing to 11 years in prison for insider trading didn’t help. Being accused of dodging a large UK tax bill didn’t exactly add to the party mood either.

These are tricky issues for Goldman, but the real concern for them is their bottom line performance. Ahead of their quarterly results next week, some analysts are suggesting the bank may be headed for an (almost) unprecedented loss. To put this into context, the bank has made precisely one quarterly loss in the past 12 years – right in the heart of the financial crisis. To be fair, it’s not just Goldman. Other investment banks are struggling as well. But when the leader of the pack is looking down at their shoes, you know something is definitely up.

IT’S OH SO QUIET…Shhhhh…..It’s not been a great week for Blackberry users. The company avoided the Friday Fiver’s Bad Week slot but owing to a loose wire or something of that ilk, services across the globe went down and messages piled up in the virtual post-room.

As Alice Ross of the FT observed on Twitter, the business community did not know what to do with themselves. People were forced to talk to each other and instead of shuffling head down, thumb scrolling their way on to the tube, take in their surroundings. Email can become fatiguing and we’re sure this week’s enforced rest will not have done anyone any long-term harm.

APPS FOR FINANCE…..The tweet below caught our eye this week from Hargreaves Lansdowne’s Tom McPhail, signalling an interesting development in the way that people manage their investments.

GOOD WEEK/BAD WEEK…..It remains pretty hard to find people or companies enjoying good weeks at the moment, but the FT’s Claer Barrett managed to find two on Friday. As she noted, both Harrod’s and Poundland posted strong trading results this week. Regardless of which end of the retail spectrum you’re at, the message is clear – if you’re a market leader, there is still room for growth. It’s mainly those in the chasing pack that are struggling at present.

As for bad weeks, Goldman above qualifies for one definitely, but we’re plumping for BNP Paribas. It’s tough enough being an investment bank at present anyway. But what you really don’t need to add to your woes is one of Germany’s leading business newspapers losing its rag with you and publishing a quite unique interview, minus any of the words uttered by the bank’s chief executive (you can see the worded version here). PR’s a tough game sometimes….

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/10/fps-friday-fiver-22/feed/ 0
FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/09/fps-friday-fiver-21/ http://blogs.hillandknowlton.com/shocksandstares/2011/09/fps-friday-fiver-21/#comments Fri, 30 Sep 2011 16:08:05 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=319 Hello all and happy Sunny Friday. It’s a good thing the rays are shining outside, because things are still looking decidebly wintery for the global economy. The Fiver touches on this issue this week as you’d expect, but we’ve also comments on Ed Miliband’s speech at the Labour Party conference and we profile some of the work we’ve been doing with Aviva. Thanks to Sallie, Ed, Jonathan and Joey.

Towards anomie? The human cost of the Greek crisis…..Yet another round of crisis talks were required this week to try and resolve the seemingly irretraceable problem of European sovereign debt and avoid a situation where Greece defaults on its financial commitments. Needless to say, further funds have been made available to help prop up struggling nations. In a fascinating piece for Newsnight, Paul Mason went beyond the bailouts to examine the human cost of Greek debt. The Newsnight broadcast can be found here and we’d encourage you to watch it.

The Greek economy continues to burn (Image: Belfast Telegraph)

The message to take away from the piece was that Greek society is in a fragile condition. Young people expect nothing from the state and are understandably disillusioned by the situation they find themselves in. This sense of betrayal extends beyond the nation’s youth and up into many middle class families. Mason’s report refers to the potential for anomie – not a word we were familiar with – which describes the worrying potential for a breakdown of social norms. It’s all too easy to see events through the big picture prism of the EU politicians and German parliamentary debates but it is worth sparing a thought for those who face the consequences of these decisions.

Choose your leader…..A leader in waiting addressed the Labour Party conference this week. He looked unassuming, strode the stage with confidence and was greeted with a standing ovation…..Step forward Rory Weal, the 16 year old who took Liverpool by storm, enthusiastically embraced by the actual leader Ed Miliband, who some might argue could learn a thing or two from the young man.

Labour found a new star this week, but Ed Miliband's speech was hampered by technical difficulties (Image: Daily Telegraph)

The leader’s speech itself was just getting going when the Blue Screen Of Death (BSOD) struck all the main broadcasters whose screens cut out missing the middle section. It meant Ed Miliband could not deliver his message of a ‘quiet crisis’ engulfing Britain. Not that it mattered much. We all knew what was in it anyway.

There were jeers from the party faithful for the mere mention of Tony Blair, yes he who so awfully delivered them three General Election victories, two of them landslides. How dare he! On the evidence available the speech was well received by the party, if not in the media. That suggests Ed Miliband has aptly captured the mood of the party – and it is one that doesn’t want to be in Government. Thanks goodness for that then.

House of bubbles…..The Financial Times today reported on an increasingly sticky situation in the Chinese property market. Construction in the country is big business in both senses of the word – skyscrapers are still sprigning up daily, and apartments are going for well over $10m according to the paper.

The problem for Chinese officials with all this growth is twofold – one, rapid growth leads to bubbles and we know what happened last time there was a big one of those involving housing. And two, property developers in China are a mixture of “dragons and fish tumbled together” in the words of one official. In other words, while some developers know what they’re doing, many others don’t.

China is keeping the world economy going - but a bubble is growing there

The Chinese authorities have therefore come up with a plan which hopefully tackles both these issues – tightening up bank mortgage lending. It seems to be working. As the FT notes, “stocks and bonds of Chinese property developers have been battered this year”, prices are falling and transactions are down.The question now, which the FT asked in a seperate article yesterday, is whether the fall signals the controlling or bursting of the bubble.

Dancing with Diversity…..Our Aviva team were very excited this week to see their hard work pay off on the very worthy Street Dance for Change campaign. This saw young people from across the country upload their own street dance videos to raise money for the Railway Children charity and the chance to win VIP Diversity 2011 Tour tickets.

Dancing, Diversity and the Railway Children - our campaign of the week

We had some great young people come to a dance workshop with Diversity and learn some of their latest street dance moves at the world renowned Pineapple Studios in Covent Garden. Plus, Diversity created a fab new video specially for the campaign, which is well worth a view. If you want to see some behind the scenes shots from the video check out Diversity’s Twitter feed.

For any who fancies getting involved and uploading a routine but just needs a little inspiration, Ashley Banjo shows off a few basic moves here. For every view of every competition entry Aviva will donate £2 to Railway Children and the video that raises the most money, i.e. gets the most views, will win VIP Diversity 2011 Tour tickets and meet the group. The team enjoyed working with the boys (thanks for tweeting about the campaign!) to raise money for Railway Children and hope that the competition hits its £50,000 target.

Video of the week: Trader or hoaxer…..This video made the rounds after ‘independent trader’ Alessio Rastani stunned BBC viewers and presenters in a painfully frank interview where he said the “market is toast” and that the stock market is essentially finished.

TV's newest hate figure - Alessio Rastani (Image: Metro.co.uk)

His candid remarks were not well received with many viewers questioning his authority to make these comments. Some even branded him a hoaxer, choosing to believe that Rastani is the work of Andy Bichlbaum from The Yes Men rather than accept the bleak future he painted. Could we really be heading towards another economic recession? What do you want to believe?

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/09/fps-friday-fiver-21/feed/ 0
FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/09/fps-friday-fiver-20/ http://blogs.hillandknowlton.com/shocksandstares/2011/09/fps-friday-fiver-20/#comments Fri, 23 Sep 2011 13:04:41 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=294 Known unknowns…

Frank Portnoy, Professor of Law at the University of San Diego has written a fantastic article in today’s FT on market uncertainty, rogues, risk taking and trust in banks. The best we’ve seen and rather frightening, Dr Doom would be proud, because ultimately, however much we regulate, we are only basing decisions on what has happened in the past, rather than what could happen in the future – i.e, Greece defaulting.

Every picture tells a story…

Photograph: Dan Kitwood/Getty

Indeed this photo, featured in Jackie Ashley’s excellent comment piece on what the future may hold for the Liberal Democrat’s (it’s a fairly bleak outlook) tells a very specific story of the Liberal Democrat’s past; the good intentions of fresh faced Lib Dem MP’s. Contrasted this week, with the harsh realities of Government, and the tensions between the two, superbly captured in Danny Finkelstein’s commentary.   

F8: The media story of the week…

Facebook and Spotify have teamed up to bring free music to Facebook users and announced the fruits of their labours this week with this video. Mashable provide a better summary than we ever could, but this is certainly worth knowing about.

“Disastrous miscalculation” – but by whom?

Yesterday Kweku Adoboli, the UBS trader accused of losing £1.5 billion, appeared in court on charges of two counts of fraud and two of false accounting dating back to 2008. During the hearing his lawyer said that he is “sorry beyond words” for his actions.

Mr Adoboli is not the only one who should be sorry – or worried. Mr Adoboli actually shopped himself; it was not the UBS risk or compliance teams that picked up on his reckless behaviour. This presents a massive problem for UBS and its internal control systems as they have been shown to be unfit for purpose.

“Disastrous miscalculations” have certainly been made, both by an individual and an institution.

Get set for the iphone 5…

Infographic: Dusan Belic, IntoMobile

 

The ‘will they, won’t they’ speculation was all a bit much for the iPhone junkies around the office this week, and despite the lack of information coming out of Apple themselves, we think all this confusion just makes for an even bigger launch when the iPhone 5 actually hits the stores – and we can’t wait.

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/09/fps-friday-fiver-20/feed/ 0
FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/06/fps-friday-fiver-7/ http://blogs.hillandknowlton.com/shocksandstares/2011/06/fps-friday-fiver-7/#comments Fri, 17 Jun 2011 17:16:28 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=172 Hello again all. It’s been a frantically busy week here in the Financial & Professional Services team, but as ever we bring you the Friday Fiver which rounds up this week’s events. Thanks to contributors Mel, Nick, Jo and Jonathan this week.

Freedommmmmm…Braveheart bonds, kilt edged bonds, Connery bonds and Jonathan’s own personal suggestion of shortbread bond are just some of the names being used to describe new powers that will allow Scotland’s government to issue debt.

Mel's adopted country is about to issue its' own bonds

The Scotland Bill makes provision for the country to raise up to £2.2bn from markets to fund infrastructure projects. There had been calls to permit up to £5bn of borrowing but this idea has been dismissed and Treasury ministers are at pains to emphasise that this does not amount to writing a blank cheque. It remains to be seen what ratings agencies will make of Scotland’s credit worthiness.

However, this week also saw riots on the streets of Athens as the Greek government seeks to implement austerity measure s to cut spending and meet the nation’s debt commitments. The dangers of small economies borrowing big sums of money should be front of mind for Scottish ministers.

We hear all about the Economist…This week,we were lucky enough to meet Daniel Franklin at the FPS Big Bite. The well respeceted Business Affairs Editor has been at the Economist for a staggering 28 years and gave us an insight into the passion that journalists have for this successful newspaper. With a circulation of over 1.5million around the world and 200,000 in the UK you can imagine that the publication only attracts the best of the very best of journalists!

We learnt all about the 'weekly newspaper' this week

After making us promise that we wouldn’t bombard him with emails following our lunch (sorry in advance Daniel!!) he went on to explain the thinking and routine behind The Economist giving the team a useful inside look into the ‘fiercely independent’ newspaper.

A regulatory phoenix …On Thursday the Government published its financial regulation White Paper and draft Bill which will see the creation of the new Financial Conduct Authority and Prudential Conduct Authority, and split of regulatory supervision now been offered up to replace the FSA.

Those readers who are equally wizened as this writer (Mel) might have a sense of déjà vue, having witnessed at first hand – working as a fresh faced, hopeful graduate at the Bank of England when the BCCI crisis erupted in the 1980s setting off – the chain of events which ultimately culminated in Gordon Brown forcing the old lady to relinquish her jealously guarded control of the banks.

Fast forward to 2011 and, here we are again!, the previously lauded and internationally revered one-stop financial regulatory juggernaut of the FSA and the ambiguous tripartite structure between HMT, the Bank of England and FSA both now found failing in the aftermath of the latest – and let’s acknowledge – near Armageddon financial crisis.

So another brave new phoenix emerges from the ashes with strengthened and expanded statutory objectives around responsibilities for the insurance sector, an enhanced competition regime and a strengthened role for FOS.

Otto Thoresen, Director General, ABI endorsed these measures but pointed to unanswered questions about how the links between the different regulatory bodies – PRA and FCA – will work in practice and how exactly FOS will work with FCA. Indeed, yes it is important to avoid overlap and confusion. Sound familiar?

The battle for pension reform is about to begin…The pressure has slowly been building on this one, with strikes being pencilled in across the week. But Treasury Secretary Danny Alexander lit the touch paper this morning with an article in the Daily Telegraph outlining the government’s intention to force public sector workers to work longer and pay more for their retirement pots.

Saving for old age is a very hot political potato

Is it fair? Many in the private sector would say so. Will it happen? That’s still in the balance – Alexander certainly came in for a tough time at an IPPR event this afternoon where he outlined the government’s thinking. The key date is 27th June, when negotiations are likely to conclude.

Brand promises & customer experiences…It’s fair to say that financial institutions have endured something of a reputational rocky patch amongst consumers. Many customers have been disappointed with the service they’ve received, coupled with poor products and several miss-selling scandals – a fact highlighted by this week’s episode of Panorama.

Thankfully it seems the industry is finally beginning to wake up and adopt a much more consumer oriented approach. Nick was lucky enough to be able to attend an event at the Financial Services Forum examining the relationship between brand promises and customer experiences. One of the central themes that emerged from the discussion was that a brand is not represented by a new logo or slogan but by the 1000’s of gestures made by the business to its customers across the world every day.

Every interaction is a chance to reinforce the business’ brand values and this needs to be recognised throughout the entire customer journey. Managing expectations coupled with the odd piece of exceptional customer service can go a long way! It was refreshing to see such a detailed deep dive into the lives of the consumer and what struck me was the extent to which experiential brands such as Alton Towers, Emirates and Walt Disney are streets ahead.

Their whole proposition is built around the consumer experience and they understand the importance of recognising this at every level. With regulatory bodies also placing unprecedented levels of scrutiny on consumers rights, perhaps many of the UK’s biggest banks should take a leaf out of the books of Mickey Mouse and Pluto. A smile and a genuine belief in the brand you represent seem key.

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/06/fps-friday-fiver-7/feed/ 1
FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps%e2%80%99-friday-fiver/ http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps%e2%80%99-friday-fiver/#comments Fri, 20 May 2011 17:04:38 +0000 Jonathan Henderson http://blogs.hillandknowlton.com/shocksandstares/?p=135 After last Friday’s company Charity Day, the Fiver is back. This week we tour the globe and the news agenda with comment on time zones, tweets, trades and the thorny issues surrounding the state-owned banks. Thanks to Clare Coffey, David Chambers, Ross Gillam and Nick Woods for their contributions.

Time warp

Economists often watch German manufacturing exports or Saudi Arabian oil production for signs about the health and direction of trends taking place in the global economy. The small island nation of Samoa is not well known for its economic significance but last week the country announced a move which says a lot about the global economy.

The Samoans have decided to move the zigzagging International Date Line to their east. The move which will take place later this year will bring the country a day closer to Asia and Australasia.  

As a nation, the Samoan’s seem happy with change. In 2009 they decided to switch sides and start driving on the left of the road. The rationale for this latest decision is to put them in closer sync with the East. The FT described this as a “clear vote of confidence for the Asian century.” 

The old adage that time is money seems appropriate.

 Shares for everyone?

The British public should all receive a portion of the shares the government owns in RBS and Lloyds Banking Group when the time comes to sell them back to the private market. That was the view this week of the Centre for Policy Studies, which published a paper outlining the idea. The media inevitably picked up on the fact that doing this would also cause the City to lose out on around £1bn of fees for underwriting and processing the share sale.

So is it a good idea? Anthony Hilton in the Standard was broadly supportive, though he had reservations about whether the idea could actually work. From our point of view, anything that reintroduces consumers to the notion of share ownership, dividends and the wider sphere of personal finance has to be a good thing.

 Clear as Westminster mud

Today’s report on injunctions by a committee of top judges has questioned the boundaries of reporting on statements made in the House of Commons and Lords. Committee chairman Lord Neuberger criticises MPs using parliamentary privilege to simply “flout” rules, supporting the report’s comments that reporting in the Lords or Commons can only be protected by parliamentary privilege where ‘summary is published in good faith and without malice’. This last comment challenges the free reign of journalists to report what they like, something many have argued is unfair and equates to a gagging order. Rather than drawing clarity on the issue, the report seems to highlight the just how blurry the current law is.

However, what is even less clear is what the rules should be on those who use social media to openly discuss injunctions. Journalists and the general public are just as likely, if not more, to search Twitter for the latest gossip and news rather than listen to statements in the Commons and Lords. With this in mind, businesses who want to bury bad news need to pay just as much attention to conversations online as they do at the despatch box.  

 Inflation targets – what is the point?

Official figures released this week announced that CPI has hit the heady heights of 4.5%, more than double the Bank of England’s target level. The Bank concedes it expects inflation to continue to grow this year, even hitting 5%.

 

In a speech last night, the Bank’s deputy governor for monetary policy, Charlie Bean (yes, Mr. Bean is a deputy governor!), admitted that the Bank had taken the decision to “accept a temporary period of above target inflation”. This therefore begs three questions: how long does a ‘temporary period’ last, on what criteria was this deemed ‘acceptable’ when there are millions of households struggling to make ends meet, and what is the point of a target if it is acceptable to fall flagrantly short of it?

Clearly Mr Bean and his colleagues are struggling to do their jobs. Is this because though the target is simple, they do not have the means to get there? Is their inaction, action? Do they have the requisite insight and tools to enable them to do their jobs? They say a bad workman blames his tools – and maybe our leading economic brains can justifiably say that the tools at their disposal have proven to be inadequate (hence the regulatory infrastructure changes to come) and therefore they are hamstrung as a result. However, the millions of households across the country can ill afford the wait or the expense of a ‘temporary’ period of crushing inflation.  

Glencore – The saga continues

So the long wait may finally be over but the speculation remains as Glencore this week made its much anticipated IPO. Whilst much of the hype had centred on rumours of oversubscription, shares in the Swiss-based commodities trading company traded on a “conditional basis” between a high of 553.17p an increase of 4.4 per cent from the offer price – and a low of 530p.

 

With many investors hoping for an opening day rally of between 5-10% many were left feeling somewhat underwhelmed. Whilst many commentators may argue that the trading activity marks a normal stabilisation procedure, the debate around the wider issue of the somewhat sluggish European IPO market looks set to continue.

With this in mind it seems Glencore will continue to be under the spotlight until next Tuesday as the business moves to unconditional trading with the most positive projections suggesting the company will go straight into the FTSE 100, only the third time this has been achieved.

Either way with 5 of its executives set to become billionaires, perhaps it’s not all doom and gloom!

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps%e2%80%99-friday-fiver/feed/ 0
FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps-friday-fiver-4/ http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps-friday-fiver-4/#comments Fri, 06 May 2011 13:22:55 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=104 Yes, it’s back. After a break for the Easter holiday, some glorious weather and that dress, we return with the Financial and Professional Services team’s Friday Fiver. We also have a fresh contributor this week, our new regulatory and government expert, Melanie Worthy. Other pieces this week come from regulars Ed Jones, Ross G, Karen and myself.

Crunch time for RBS and the FSA…The Treasury Select Committee and the FSA announced this week that they’ve asked City heavyweight Sir David Walker and lawyer Bill Knight to conduct an independent review of the report the FSA is producing into the failure of RBS. They will examine whether the report fairly reflects the findings of the FSA’s investigation of RBS, as well as analysis of its own regulatory activities.

Sir David Walker - charged with reviewing the demise of RBS (image from guardian.co.uk)

Walker’s unique attributes of being both a credible City figure plus a trusted Government adviser make him an obvious choice for the role. His track record helps too – he has headed Government enquiries, such as in 2009 when he examined governance at the big UK banks.

Just as well then, as he’s going to have his work cut out. However “complex” the issues were, as the FSA cites somewhat reluctantly, there will be strong media interest and expectation for answers as to the causes of RBS’ demise; the excessive cost to the public purse from bailout; and the wider malaise that played out across the banking sector as the financial crisis ensued.  Whilst Walker and Knight tread through a minefield to avoid the legal conflicts to RBS employees, they’ll be mindful of the need to show teeth and forensic review on both sides of the regulatory fence.

Nick Clegg – Stick or Bust…Most observers of the Westminster Village Ed’s spoken to in recent months have agreed on one thing: May 5th and the outcome of the AV referendum will determine the fate of the Coalition Government. As we’ve said previously, the fates of Nick Clegg and Ed Miliband appear eerily interlinked, with success for one leading to failure for the other. It seems neither will come out of this episode particularly favourably though.

It's not been a vintage week for Nick Clegg

Judging by Chris Huhne’s recent outbursts, it would seem to look more terminal for Nick Clegg, and Ben Brogan was on to something this week when he said Nick Clegg’s body language in PMQs was ominous.

Cameron, demonstrating his exceptional political judgement, was keen to move the story on and talk up the other important work the Coalition has set out. But where can it realistically go from here? If Lords reform is offered as a carrot to the Lib Dems to carry on, it’s highly likely a similar demoralising defeat will occur on it. On the flip side, Lord Knight’s suggestion that an early election to deliver the Conservative’s a majority is intriguing, but given the barriers against this, difficulties over NHS reform and the current state of the economy, this would appear wide of the mark.

Where else can the Lib Dems look?…Given the loss of 300 council seats and a probable resounding no to AV, what will be telling in the coming days is how the Lib Dem rank and file respond to defeat. Paddy Ashdown has already launched an attack at David Cameron, and Clegg may well be hoping that this and other attacks distract party members from aiming their wrath at him.

Clearly, Clegg is going to have to secure some tangible wins for the Lib Dems in order to quell the growing frustration. With this in mind, he may seek to increase the fight for a greater say on health reforms. The Health and Social Care Bill should allow for greater private provider provision of health care, but the extent to which the Tories have wanted to pursue this has caused unease amongst many Lib Dems.

The current pause in the process of passing the Bill and now the increased chance of Lib Dems demanding changes means that private equity firms are going to be increasingly turned off due to the levels of uncertainty around private provision. If the Lib Dems decide to really dig their heels in, private equity firms could lose out on what previously looked like a sure investment.

Exchange-Traded Funds – the current big thing?…Earlier this week, we enjoyed a fantastic training session with David Yates from Finance Talking. One of things he focused on was the growth of ETFs in recent years. Financial News picked up on this point earlier this week as well, noting the recenty outflow of money from four of the five largest asset managers and into ETFs – the magazine claimed $41.4bn of new money was poured into ETFs in Q1 2011 according to Blackrock.

Not everyone seems convinced though. In today’s FT, Gillian Tett examined the boom in this market, and argued that concerns are building amongst regulators about it. While not as inherently dangerous as the pre-2007 fad for ‘CDOs’, she did note that there are some striking parallels here. Clearly, others are still a big fan of them though, as FT Alchemy notes today.

This week's Big Bite was all about the future

Learning about the future…The exciting guest for this week’s FPS Big Bite was Patrick Harris from The Futures Company. He gave us some great insights into the world of futures and left us with an interesting and thought provoking debate.  As Patrick pointed out ‘the future is all around us, it’s just not evenly distributed’. We hope that gets you all thinking as much as it did our team!

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps-friday-fiver-4/feed/ 0
Blog safari – hunt for the best financial service bloggers http://blogs.hillandknowlton.com/shocksandstares/2011/04/blog-safari-hunt-for-the-best-financial-service-bloggers/ http://blogs.hillandknowlton.com/shocksandstares/2011/04/blog-safari-hunt-for-the-best-financial-service-bloggers/#comments Wed, 27 Apr 2011 11:15:41 +0000 Jonathan Henderson http://blogs.hillandknowlton.com/shocksandstares/?p=98 I have recently been on a blog safari. I hoped to track down the best blogging talent the financial services industry had to offer and bag them for our blogroll.

[Cameras at the ready]

I envisaged the web as a Serengeti, a vibrant ecosystem, full of talented and insightful bloggers from across the spectrum of financial services all offering their thoughts on the latest developments from within the industry.

The big beasts of the plain were immediately obvious. Established journalists such as Mark Kleinman and Robert Peston break big industry stories via their blogs on a regular basis but these sit on traditional news sites.

I was searching for lesser known talent but it proved elusive. There were a few notable exceptions although these came from individuals with a background in journalism or from corporate entities. Dominic Frisby, a regular contributor to Money Week, runs Frisby’s Bulls and Bears. The site is aimed at private investors and provides insight into the latest economic and market developments and is full of interesting audio interviews, particularly for those with an interest in commodities investment. Likewise, for those with an interest in fixed income, M&G’s Bond Vigilantes provides regular and accessible comment on debt markets.

I’m at a bit of a loss as to why there are so few blogs from individuals within the industry worth reading. It is possible that the industry is so well served by traditional media that there’s little demand for blogs.

Compliance and regulation also make it difficult for bloggers to write about the companies they are working for.

[Financial services bloggers are harder to spot]

In true David Attenborough style, I had hoped to unearth new, undiscovered blogging talent but what I found was that it is either hidden in amongst the undergrowth or still in the evolution process. If you have discovered a financial services blogger with something to say, then do let us know.

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/04/blog-safari-hunt-for-the-best-financial-service-bloggers/feed/ 0
Our Top 5 Business Columnists http://blogs.hillandknowlton.com/shocksandstares/2011/04/our-top-5-business-columnists/ http://blogs.hillandknowlton.com/shocksandstares/2011/04/our-top-5-business-columnists/#comments Tue, 19 Apr 2011 12:45:03 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=20 As you might expect, our Financial & Professional Services team consume a truckload of traditional and new media every day on all things money. Despite the never-ending torrent, one thing we always make time for is to read the many excellent business columnists and commentators that try to make sense of everything going on.

We read a lot of these, and websites too, but which are our favourite business columnists?

With that in mind, here’s a list (in no particular order) of five of our favourites who appear in the business pages each week. This is by no means definitive, and indeed there are many others who we love to read as well – we’d welcome thoughts on your favourites too:

Anthony Hilton - one of our absolute must reads (Image from PRWeek.com)

1. Anthony Hilton, Evening Standard – A consistent hit in our team, Hilton has been providing commentary on the City for several decades. Never afraid to pull punches when it comes to analysing an issue, he always presents clear, concise, logic behind his arguments. Simply put, a must-read for us and thousands of others involved in financial services.

2. John Authers, Financial Times – Authers used to write the daily ‘Short View’ column analysing the markets but recently moved to head up the ever-excellent Lex Column. A shrewd commentator, he has the gift of making complex financial and economic jargon sound relatively simple and easy to understand for the general reader – ably demonstrated by his regular Friday ‘Long View’ column. Mentions to Gillian Tett and Martin Wolf as well here.

3. Ian King, The Times – King took over the Business Editor’s desk at The Times late last year. Before him, David Wighton also provided a concise viewpoint on the business stories of the day. King has continued in that vain, injecting a touch of humour into his column alongside strong but fair viewpoints, and cutting-edge analysis. For his part, Wighton now writes a regular Saturday business column amongst other things.

4. Jeremy Warner, Daily Telegraph – Formerly the Independent’s star Business Editor, we love to read Warner’s twice-weekly column in the Telegraph for its more in-depth look at key business and economic issues. He’s not afraid to take a swipe at those he disagrees with either, as his little dig at the Guardian’s Polly Toynbee earlier this month showed. He’s also a prolific tweeter.

5. Pauline Skypala, FTfm – More specialised than the others in this list, but we include Skypala because of her talent for probing the inner workings of the fund management industry and asking tough questions of it as a result.  An excellent way to start off the week with a cup of coffee on a Monday morning. Another good tweeter to follow as well.

6. Lucy Kellaway, Financial Times – Ok, so this makes six, but we like to enjoy the lighter side of business commentary as well, and Kellaway’s ‘On Work’ column on a Monday certainly provides that. I may not always agree with what she writes, but for examining office-based issues that affect us all in a humourous way, there are few better. You can look for her latest column on Twitter too.

Lucy Kellaway - Perfect Monday morning reading

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/04/our-top-5-business-columnists/feed/ 0
The Vickers report – what’s the impact for consumers? http://blogs.hillandknowlton.com/shocksandstares/2011/04/the-vickers-report-whats-the-impact-for-consumers/ http://blogs.hillandknowlton.com/shocksandstares/2011/04/the-vickers-report-whats-the-impact-for-consumers/#comments Wed, 13 Apr 2011 09:15:31 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=51 Broadly speaking, there were two parts to this week’s interim report from the Independent Commission on Banking. The first focused on how best to avoid another cascade failure of the banking system, which would likely place the onus on the government to bail out failing banks in order to avoid system-wide collapse – as happened in 2008. The proposals to tackle this are twofold: One, create distinct ‘firewalls’ between retail and investment operations in UK banks; Two, increase the ratio of capital held to lending issued in the retail part of banks.

Sir John Vickers - published his interim report on the future of banking in the UK this week

Judging by the rise in the share price of UK banks after the report was released, the view from the City seems to be that these recommendations are less onerous than might have been expected (though as the Independent’s Andrew Grice noted, the balance of squealing from both sides showed that Vickers may well have got it just about right).

The second part focused on competition in the retail banking sector, and it’s here that the consumer is likely to feel the most immediate change. Vickers’ view is that despite Lloyds Banking Group selling off 600 branches, more need to go to encourage competition in the high street. Bad news then for Lloyds (who reacted strongly) as well as HSBC, Barclays and particularly Santander, who have only recently finished a buying spree of high street operations.

What does all this mean for the consumer? Well, at least two significant changes. The first is the potential for the UK to follow many other markets and start charging consumers for operating a bank account. The UK has held off on this front for many years, but if retail banks are going to hold more capital, they will claim they need to raise money accordingly – charging for a current account is one way to do this. Try explaining that to an already hostile public though.

The report could mean more competition

The second could be more banking names on the high street. Metro Bank is one such option – despite offering what many journalists label ‘middle of the road’ savings rates, it continues to attract positive reviews, and more importantly, customers. The second is the Co-Operative, interviewed on Channel 4 News last night, and likely rubbing their hands with glee as the market opens up before their eyes.

In theory, more competition means improved rates on savings and mortgages for consumers. The question is though, will these improved rates compensate for the extra charge being paid for banking services that is likely to be introduced?

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/04/the-vickers-report-whats-the-impact-for-consumers/feed/ 0