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Explainer: How Britain is exploiting Brexit to reform finance?

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Explainer: How Britain is exploiting Brexit to reform finance?

LONDON, Dec 9 (Reuters) – Britain proposed over 30 reforms on Friday to bolster the Metropolis of London’s function as a world monetary centre, now outdoors the European Union and going through competitors from Amsterdam, Paris and Frankfurt, in addition to New York and Singapore.

IS THIS BIG BANG 2.0?

Not fairly, nevertheless it marks a swing within the regulatory pendulum from years of accelerating financial institution capital necessities and tightening shopper protections, to considering what tweaks are wanted to make guidelines work higher for Britain after Brexit.

Initially trailed as a Large Bang 2.0 on the identical scale as far-reaching Eighties reforms of share buying and selling, the modifications have now been dubbed the “Edinburgh Reforms” after the town the place they have been formally unveiled by finance minister Jeremy Hunt.

The federal government has toned down its rhetoric, insisting there will probably be no ‘race to the underside’, huge departure from worldwide norms, or scrapping investor protections, however that regulators ought to assist the monetary sector’s worldwide competitiveness.

Hunt mentioned it could be flawed name the reforms a Large Bang given the necessity to keep away from ‘unlearning’ classes from the 2008 world monetary disaster and underscored the independence of regulators.

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“The Metropolis doesn’t wish to see deregulation. Right this moment’s bulletins are a sign of an evolution, reasonably than revolution,” mentioned Alasdair Haynes, CEO of Aquis inventory alternate.

WHAT’S RING-FENCING ALL ABOUT?

Britain has already introduced an easing of capital guidelines for insurers and is now turning to banks.

Since January 2019 banks have needed to ring-fence their deposit-taking arms with a cushion of capital to insulate them towards blow-ups of their riskier actions.

Banks have complained the foundations are too strict and hinder smaller ones from competing with larger lenders within the mortgage market. The federal government mentioned it can observe suggestions from a overview it commissioned and amend the foundations.

The federal government will seek the advice of mid-2023 on exempting banks with out main funding banking actions from the foundations, and on elevating the deposits threshold which triggers compliance with ringfencing guidelines, from 25 billion kilos to 35 billion kilos.

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ARE BANKERS NOW OFF THE HOOK?

It is not again to pre-financial disaster ‘lite-touch’.

The federal government had already introduced it can scrap an EU cap on banker bonuses, although different curbs on how bonuses are paid are anticipated to stay.

Britain launched guidelines in 2016 to make senior bankers, including senior officers at insurers in 2018, straight accountable for the choices they take after few people have been punished for misconduct that led to the worldwide monetary disaster when taxpayers bailed out lenders.

It was feared as a software to publicly disgrace bankers by placing “heads on sticks”, however to date there have been few investigations or enforcement instances. Bankers say regulators additionally take too lengthy to provide the inexperienced mild to senior appointments.

The federal government will overview this senior managers and certification regime within the first quarter of 2023, with no indication but of the dimensions of any modifications.

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WHAT ABOUT MARKETS?

There will probably be a raft of critiques as London seeks to meet up with New York in listings.

Matters underneath overview embody the foundations on short-selling, or bets that the value of inventory will fall. The federal government proposes to scrap outright an EU-era “PRIIPs” explanatory doc given to buyers, changing it with an alternate framework.

There will probably be an business taskforce to look at the case for halving the time it takes to settle a inventory commerce from two working days to 1, a transfer already deliberate in america.

Guidelines on prospectuses that firms give to buyers after they record on an alternate will probably be overhauled, together with a reform of guidelines for securitisation.

The federal government commits to setting up guidelines for a “consolidated tape” by 2024, to offer market costs for buyers to examine on finest offers throughout buying and selling platforms.

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The federal government will act on suggestions from a overview into bettering how listed firms faucet buyers for recent funds.

There will probably be a overview of EU guidelines which require brokers to itemise charges for inventory selecting analysis and executing inventory orders, often called ‘unbundling’ – a rule the EU has already partially reversed. There will even be trials for a wholesale market venue that operates on an intermittent foundation to enhance firms’ entry to capital earlier than they publicly record.

AND GREEN FINANCE?

The federal government will seek the advice of on bringing environmental, social and governance (ESG) firm rankings suppliers underneath the regulatory internet.

The rankings are extensively utilized by buyers for selecting firms which tout ‘inexperienced’ credentials, however they aren’t regulated. The Monetary Conduct Authority mentioned it could encourage regulation centered on transparency, good governance, administration of conflicts of curiosity, and strong methods and controls.

WILL THERE BE A BRITCOIN?

Prime Minister Rishi Sunak, when he was finance minister, referred to as for a “Britcoin” or digital pound for sooner funds.

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The federal government will seek the advice of with the Financial institution of England in coming weeks on a digital pound for retail use.

Reporting by Huw Jones;Enhancing by Elaine Hardcastle

Our Requirements: The Thomson Reuters Belief Rules.

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Section 8 scam uses fake link on Facebook to steal information, NC Housing Finance Agency warns

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Section 8 scam uses fake link on Facebook to steal information, NC Housing Finance Agency warns

Thursday, June 13, 2024 11:19PM

Section 8 scam uses fake link on Facebook

The scam is presented as a fraudulent Facebook page, made to look like the NC Housing Finance Agency’s account.

RALEIGH, N.C. (WTVD) — The NC Housing Finance Agency issued a warning to North Carolinians seeking a Section 8 Housing Voucher after an online scam was found on social media.

The scam is presented as a fraudulent Facebook page, and made to look like the NC Housing Finance Agency’s Facebook account. It encourages people to provide information through a fake link — or pay a fee to access the vouchers or get on a waitlist.

“The NC Housing Finance Agency is not affiliated with this account, the flier, or the scam and does not endorse any such solicitation,” The agency said in a statement.

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For more information about Section 8 Housing Choice Vouchers visit here.

Anyone who may have been affected is encouraged to file a police report and file a report with the Federal Trade Commission and the North Carolina Attorney General.

Copyright © 2024 WTVD-TV. All Rights Reserved.

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At G-7, Biden and European leaders agree to finance Ukraine using Russian assets

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At G-7, Biden and European leaders agree to finance Ukraine using Russian assets

Key details of the financing arrangement still need to be agreed, but the leaders, meeting at a summit of the Group of Seven major advanced economies, hope it will shore up Ukraine’s finances as it fights against the two-year-old Russian invasion.

Separately, Biden and Ukrainian President Volodymyr Zelensky are expected to unveil a bilateral security agreement that seeks to establish a long-term U.S. commitment to military aid for the embattled country.

The steps by G-7 leaders at the summit in southern Italy represent the latest effort by Western allies to signal their commitment to supporting Ukraine’s defense with arms and funding, despite political divisions within the U.S. and Europe creating uncertainty about the longevity of that support.

Russian President Vladimir Putin has redoubled the military pressure on Ukraine in recent months, exploiting the sputtering flow of Western military aid to badly damage Ukraine’s energy grid with missile attacks and expanding Russia’s ground offensive in eastern Ukraine.

G-7 leaders aimed to announce the framework of an agreement to use the investment returns, mainly interest payments, generated from roughly $300 billion in Russian sovereign assets that the U.S. and Europe froze after Russia launched its full-scale invasion of Ukraine. Most of the Russian central bank assets are held in Europe.

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The plan seeks to create a new financial instrument to provide Kyiv with years’ worth of expected profits on Russian assets.

U.S. and French officials said they hope the disbursements can start flowing to Ukraine by the end of the year.

A senior Biden administration official said G-7 leaders had a “political agreement at the highest levels for this deal. And it is $50 billion…that will be committed.”

Zelensky, one of several world leaders invited to join the three-day summit at a luxury resort in the Italian region of Puglia, was due to hold a joint news conference with Biden late on Thursday.

The U.S.-Ukraine security pact seeks to commit future administrations to work with Congress to provide funding and military support for Kyiv. It makes no new promises regarding Ukraine’s bid to join the North Atlantic Treaty Organization. White House officials acknowledge that future U.S. presidents could withdraw from the bilateral agreement, which isn’t a treaty and doesn’t require congressional approval. It also has no dollar amount of military funding attached.

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Ukraine has already signed a series of similar pacts with European and other countries, some of which have spelled out specific future support.

Former President Donald Trump, who faces Biden in November’s rematch election, has said he believes he could persuade Putin to negotiate an end to the war and has questioned why the U.S. has been sending billions of dollars worth of military and financial aid to Ukraine.

But Trump quietly consented to the passage of a short-term military-aid package for Ukraine and endorsed proposals by some Republicans to support Ukraine in the form of a loan.

White House national security adviser Jake Sullivan told reporters Thursday that the security agreement with Ukraine was a “real marker of our commitment, not just for this month, this year, but for many years to support Ukraine, both in defending against Russian aggression and in deterring future aggression so that Ukraine can be a sovereign, viable, thriving democracy.”

Sullivan told reporters traveling aboard Air Force One Wednesday that it would send Russia “a signal of our resolve. If Vladimir Putin thinks that he can outlast the coalition supporting Ukraine, he’s wrong. He just cannot wait us out.”

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Ukraine desperately needs continued financial support. A separate loan package from the European Union worth 50 billion euros, equivalent to around $54 billion, is intended to help shore up Kviv’s ability to pay for basic government services, salaries and pensions through 2027.

In addition, the World Bank estimated in February that Ukraine’s reconstruction costs after the war will total close to $500 billion.

The planned $50 billion in financing for Kyiv backed by Russian assets must still overcome differences between Washington and European capitals on the technical details of how to structure the funding and how the risk on the loans should be shared.

European officials have said in recent days they envisage much of the funding would flow via existing EU programs for Ukraine. They also want the U.S. to help guarantee the loan so that if profits from the Russian assets stop flowing in, Europe won’t have to foot the bill alone.

The EU wants the loan to pay mainly for military aid for Ukraine, in line with a previous agreement it made on how to use the windfall profits, which are expected to total around $3 billion to $4 billion a year. The EU also wants to make sure their companies win some of the contracts for the civilian or military work that Ukraine spends the money on.

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Washington had been pushing for a loan to be made by a special purpose vehicle managed by the World Bank, with the U.S. and its G-7 partners supplying the money upfront. The U.S. is concerned that the flow of profits from frozen Russian assets could be halted in Europe if Hungary, whose leader Viktor Orban has long had close relations with Moscow, vetoes the continued EU sanctioning of Russian assets. Authorization for the asset freeze and other EU sanctions must be renewed every six months.

European officials have said resolving the technical details could take many weeks. Sullivan said G-7 leaders planned to set a clear timetable for experts to agree on details.

Noemie Bisserbe contributed to this article.

Write to Ken Thomas at ken.thomas@wsj.com and Laurence Norman at laurence.norman@wsj.com

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Pak may borrow $23 bn in next fiscal year to finance development plans

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Pak may borrow $23 bn in next fiscal year to finance development plans

These nations and international creditors are now dictating their terms due to their unending dependency on them | Photo: Shutterstock


Pakistan has planned to borrow a minimum of $23 billion in the next fiscal year, including the rollover of a bilateral debt of $12 billion, to finance its development plans and meet its external financing requirement which will keep the cash-strapped country’s foreign and economic policies dependent on global financial institutions like the IMF, according to a media report on Thursday.


Budget documents for fiscal year 2024-25 showed that Pakistan would borrow at least $23.2 billion, or Rs 5.9 trillion, which did not include any loan from the International Monetary Fund (IMF), The Express Tribune newspaper reported, adding that the International Monetary Fund’s loan will be for balance of payments support.


Out of the $23 billion, the government has included $20 billion in budget documents. It has not made the rollover of $3 billion by the United Arab Emirates (UAE) part of federal books as it is also meant for balance of payments support.

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Details showed that Pakistan would take $19 billion in loans for budget financing and building its foreign exchange reserves. The amount appears colossal, which will keep the country’s foreign and economic policies dependent on the IMF, the World Bank, Saudi Arabia, China, the UAE and the Islamic Development Bank.


These nations and international creditors are now dictating their terms due to their unending dependency on them.


Prime Minister Shehbaz Sharif has claimed that he has received investment pledges of $15 billion from Saudi Arabia and the UAE but so far these promises have not translated into concrete agreements.


After being unable to acquire new debt from foreign commercial banks, the government has once again budgeted $3.9 billion worth of foreign commercial loans in the new fiscal year. However, in the outgoing year, China rolled over $1 billion of commercial debt.


There was hope that the international credit rating agencies would improve Pakistan’s junk rating under the $3 billion IMF’s standby arrangement. However, political and economic vulnerabilities prevented them from improving Pakistan’s standing.

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Finance Minister Muhammad Aurangzeb said on Tuesday that the rating agencies were waiting for approval of the new Extended Fund Facility of the IMF. In case of further delay in the improvement of the ratings, the government’s plan of raising $4.9 billion through Eurobond and foreign commercial loans would not materialise.


The government had estimated the receipt of $6 billion from sovereign bonds and foreign commercial loans in the current fiscal year. After such deals could not be clinched, the State Bank of Pakistan bought an equal amount from the Pakistani markets.


The government has once again included the rollover of $5 billion in cash deposits from Saudi Arabia. This shows that the country will not be able to return the money out of which $3 billion had been taken in 2019 for just one year.


However, Saudi Arabia has not agreed to extend the oil facility of $1 billion to the next fiscal year, prompting the government to exclude it from the projection of external loan receipts. Similarly, the government has not included any new loan from Saudi Arabia for the import of petrol.


China’s $4 billion in cash deposit has again been added to the rollover queue, of which $2 billion is maturing next month.

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The UAE’s financing has not been added to the federal borrowing plan since the money has been given for the balance of payments support, which will be serviced by the central bank from its profits. Out of the $3 billion, $1 billion is maturing next month.


The government has also estimated a new loan of $500 million from the Islamic Development Bank and $465 million on account of Naya Pakistan Certificates. Around $1.1 billion will be borrowed to finance the federal Public Sector Development Programme, according to the paper.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Jun 13 2024 | 2:19 PM IST

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