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Rules imposed after financial crisis have ‘gone too far’, Reeves tells City bankers

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Rules imposed after financial crisis have ‘gone too far’, Reeves tells City bankers

Rachel Reeves has told City bankers attending her Mansion House speech that regulations put in place to protect the economy after the global financial crisis had “gone too far”.

Speaking at the glitzy annual gathering in the Square Mile on Thursday, the chancellor called the financial services sector the “crown jewel” of the UK economy.

She argued that tighter rules on banks and investment institutions after the 2007-8 crash had created “a system which sought to eliminate risk-taking”.

“While it was right that successive governments made regulatory changes after the global financial crisis, to ensure that regulation kept pace with the global economy of the time, it is important that we learn the lessons of the past,” Reeves said.

“These changes have resulted in a system which sought to eliminate risk-taking. That has gone too far and, in places, it has had unintended consequences, which we must now address.”

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The last Labour government had encouraged the City regulator to take a “light touch” approach to regulating the financial services sector, but was then forced to step in and bail out a string of banks when the US sub-prime mortgage crisis prompted a catastrophic chain reaction.

At the time, regulators were accused of failing to rein in the risky behaviours that had led to the crisis, which plunged the UK into recession.

But Reeves suggested she now believed it was time to loosen some of the constraints that were subsequently imposed on the sector.

“We cannot take the UK’s status as a global financial centre for granted. In a highly competitive world we need to earn that status and we need to work to keep it,” she said.

The chancellor set out a series of changes, some of which were proposed by her immediate predecessor, Jeremy Hunt. These include obliging regulators to take into account growth, as well as financial stability; and replacing the current “certification” regime for investment professionals, with a “more proportionate approach”.

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The Financial Conduct Authority has already announced plans to streamline its rulebook for firms to reduce compliance costs, in the hope of promoting growth.

Reeves believes that bolstering private investment is key to improving the UK’s growth rate. She has also announced plans for a mega-merger of public sector pension funds, in the hope of unleashing capital to back UK infrastructure projects.

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The chancellor is keen to stress Labour’s pro-business credentials after her first budget, which increased employer national insurance contributions (NICs) from April.

The Bank of England governor, Andrew Bailey, also addressed the Mansion House dinner, stressing the UK’s longstanding support for free trade, as Donald Trump prepares to slap US tariffs on imports.

“I will own up to being an old fashioned free trader at heart. It’s a British characteristic, I like to think. My point is this: amidst the important need to be alert to threats to economic security, let’s please remember the importance of openness,” Bailey said.

Economists have said that if Trump goes ahead with his plan for a universal tariff of 10% on all imports, it could cut the UK’s growth rate next year to a sickly 0.4%.

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‘Partisan politics’: how efforts to overturn the Johnson amendment could upend campaign finance

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‘Partisan politics’: how efforts to overturn the Johnson amendment could upend campaign finance

Donald Trump has long promised his evangelical base he will undo the Johnson amendment, allowing churches and other non-profits to weigh in on and donate to political campaigns – and his path to doing so is now clearer than ever.

A provision of the tax code since 1954, the Johnson amendment prohibits all tax-exempt non-profit organizations from making political endorsements in – or offering monetary support to – political campaigns. If the president-elect succeeds in overturning it through any of a few available methods, experts say it could have the profound effect of opening up a flow of dark money into politics.

“I think it’ll have as big, or a bigger impact than Citizens United,” said Andrew Seidel, a constitutional attorney and expert on Christian nationalism. “I don’t think people are fully prepared for a country in which churches can accept tax deductible donations in the billions of dollars and then turn around and use that money for partisan politics.”

With a likely narrow majority in the US House of Representatives and the Senate, Trump has multiple avenues to challenge the provision. He could try to push Congress to take legislative action. He could attempt to unwind parts of the provision through executive action, an approach that would likely be subject to litigation. Or, he could involve the Department of Justice – which he has vowed to mobilize politically – in a key, ongoing Texas lawsuit threatening the law.

During Trump’s first term, he failed to deliver on his promise to destroy the amendment. Congress failed to roll back the regulatory measure and in an executive order gesturing at the issue, Trump only advised the treasury to take a lenient posture on the political speech of clergy – “to the extent permitted by law”.

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Now, with a lawsuit filed in Texas making its way slowly through the courts, Trump has yet another avenue to chip away at legal limits on churches’ political activity. The complaint, filed against the IRS by National Religious Broadcasters, two Texas churches and the group Intercessors for America – whose mission includes a “call for godly government” – seeks to find the Johnson amendment unconstitutional.

It claims that churches are subject to “unique and discriminatory status” under the tax code and that the IRS “operates in a manner that disfavors conservative organizations and conservative, religious organizations” in enforcing the law.

Named after its author Lyndon B Johnson, the Johnson amendment is inserted into section 501(c)(3) of the tax code to prevent certain non-profits from “participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office”. The law also notes that “contributions to political campaign funds” would “clearly violate” the provision.

Some churches already flaunt the law’s requirement to refrain from endorsing political candidates – a trend that the Texas Tribune has documented. Repealing the Johnson amendment would allow churches to go further, including potentially donating to partisan causes. Because churches, unlike other non-profit organizations, are not required to file 990 forms disclosing key financial information to the IRS, such an arrangement would allow for little public oversight.

Representing National Religious Broadcasters on the complaint is Michael Farris, the former CEO of the powerful rightwing legal outfit Alliance Defending Freedom and a driving force behind the “parental rights” movement, which seeks to limit schools’ ability to teach about race, gender and sexuality in the classroom. Like the conservative “parental rights” movement, the push to do away with the Johnson amendment could chip away legal barriers separating church and state.

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In the short run, overhauling the provision could, Seidel said, allow churches to function effectively as Super Pacs, accepting tax-deductible donations from politically-motivated donors and channeling them into political causes. Such a scenario could, Seidel cautions, force churches to subject themselves to the same financial disclosures that Super Pacs face.

“The church could be the subject of litigation, but then again, who’s going to be running the IRS? Who’s going to be enforcing that?” said Seidel. “It’ll be the Trump administration.”

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9Pay Presents All-in-One Efficient Financial Solution at Singapore FinTech Festival

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9Pay Presents All-in-One Efficient Financial Solution at Singapore FinTech Festival

HANOI, Vietnam, Nov. 14, 2024 /PRNewswire/ — From November 6 to 8, 9Pay showcased comprehensive payment services in Vietnam to businesses at the Singapore FinTech Festival 2024. 9Pay’s participation at one of the largest global Fintech events has attracted significant attention from companies and industry experts.

Singapore FinTech Festival (SFF) 2024 is organized by the Monetary Authority of Singapore in collaboration with the Association of Banks in Singapore for the 9th time at the Singapore EXPO Convention & Exhibition Center. The event attracted 65,000 participants from 134 countries and regions, including more than 3,400 government and regulatory attendees across 665 central banks, regulatory institutions, and other government organizations.

For 9Pay, attending SFF 2024 in Singapore is a strategic step to strengthening its position in fintech in Southeast Asia and the world. Coming for the first time as an official exhibitor of this famous financial event, 9Pay was welcomed warmly by many financial professionals and clients, as a trusted fintech company in Vietnam. This has contributed to strengthening the position of Vietnam’s financial technology industry in the international area, demonstrating that Vietnamese fintech enterprises are ready to compete and integrate into regional and global marketplaces.

9Pay team at their booth at the Singapore FinTech Festival 2024

The State Bank of Vietnam’s 2024 report highlights Vietnam as a top FDI destination, ranking 25th globally and outpacing regional peers like Indonesia, the Philippines, and Thailand. Key drivers include Vietnam’s large domestic market, robust consumer spending, and proactive government reforms that streamline processes and bolster foreign trade. Improved technology infrastructure has made sectors like e-commerce, fintech, logistics, education, and tourism particularly attractive. With deep market insight, 9Pay, a licensed payment intermediary, has empowered numerous companies to thrive in Vietnam by offering seamless, all-in-one payment solutions.

As the leading payment service provider, 9Pay has established powerful partnerships with international PSPs and Remittances, allowing partners to receive payments seamlessly and facilitating smooth money transfers to Vietnamese beneficiaries. Typical instances include e-commerce platforms expanding in Vietnam that can easily collect payments and promote growth, and an online education provider that integrated 9Pay’s localized payment solution, simplifying tuition payments for Vietnamese students while improving user experience.

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Boost Business Efficiency with Collection – Disbursement and Payment Gateway Service

The 9Pay Collection and Pay-Out Service offers several standout benefits for partners aiming to expand and operate efficiently in Vietnam. One of key strengths is the Localized Banking Advantage, enabling partners to use 9Pay as a local bank account for seamless collection and disbursement, simplifying operations and enhancing financial workflows.

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Brazil's Finance Minister Signals Uncertainty Over Fiscal Package Announcement This Week

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Brazil's Finance Minister Signals Uncertainty Over Fiscal Package Announcement This Week
BRASILIA (Reuters) – Brazil’s Finance Minister Fernando Haddad said on Wednesday he is uncertain whether there is enough time to announce a spending containment package this week, adding that it will be released once President Luiz Inacio Lula da Silva gives the go-ahead. The market is eagerly …
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