Global stock markets fell sharply, led by the Dow Jones, partly as a response to the revived spectre of inflation. The US trade deficit was reported to have expanded in the last year, despite the Presidential policy to reduce it. The Financial Conduct Authority said that it was ‘highly unlikely’ that it could publish its report on practices at the Royal Bank of Scotland in time for the deadline ordered by the Treasury Select Committee. In the United States agreement was reached on government funding which prevented further shut downs. In Ireland the Central Bank prepared to celebrate 75 years since its foundation in 1943. Lloyds Banking Group became the first FTSE 100 company to set a hard diversity target to recruit senior management from black, Asian or minority ethnic backgrounds. Below are the main stories in finance and regulation for the last two weeks.


The Irish government published the Data Protection Bill 2018. It outlines changes to the Office of the Data Protection Commissioner, exemptions for public authorities, offences by company officers and exemptions for the insurance industry for sensitive personal data. It also sets the age of digital consent at 13. The bill has to be implemented into law by May 2018.

The Central Bank published changes to the investment regulations for credit unions, following public consultation (CP109). Three new investment classes of bonds issued by supranational entities, corporate bonds and Tier 3 Approved Housing Bodies have been added, and changes made to the liquidity framework. The regulations will commence on 1 March 2018. The regulator also published notice of its intention to amend the requirements for Loan Origination Qualifying Investors AIFs.


The Single Resolution Board published an ‘extensive’ non-confidential version of the Resolution Decision for Banco Popular, together with valuation reports and the 2016 Resolution Plan. The Spanish bank was placed into resolution in the summer of 2017.

The European Insurance and Occupational Pensions Authority published its first paper in a series of systemic risk and macroprudential policy in the insurance sector. The first paper outlines lessons learnt from the financial crisis and the banking sector which affect the insurance sector. EIOPA also updated its technical documentation on its methodology of calculating risk free interest rate term structures, which deals with the replacement of interest rates. The European Securities and Markets Association published its second Q&A on the Benchmarks Regulation, which clarifies its application to investment funds.

   United Kingdom

In Brexit news Theresa May confirmed that Britain would not seek to remain in the customs union, which in turn revised questions about the nature of the Irish border post-Brexit. The Prime Minister and government ministers have promised 6 speeches on their policy. Impact studies prepared for the government on Brexit showed a negative economic impact on all regions of the UK, with the areas which voted most strongly for Brexit being the most likely to suffer economically. The European Union will seek a provision in any negotiated agreement with the UK that it can withdraw market access if the terms of the proposed transition period are breached, avoiding the usual process of reference to the European Court of Justice. A court challenge as to whether Article 50 could be withdrawn was dismissed by judges as an academic question which they could not opine on. The Single Supervisory Mechanism advised UK based banks to apply for EU licences before June 2018 if they were to be granted before March 2019.

Dharam Prakash Gopee was found guilty in Southward Crown Court of being an illegal money lender, in a case brought by the Financial Conduct Authority. He acted without a licence or approval. He used a form of agreement whereby a borrower sold their house to one of his companies in return for a loan, and was given a licence to remain; he unsuccessfully argued that the network of loans between his companies meant that he was not a money lender. Samrat Bhandari was separately sentenced at the same court to three and a half years’ in prison for his part in the Symbiosis Health Care investment scheme, where elderly and vulnerable investors lost over £1.4m. His was the fourth sentence of imprisonment handed down in the case.

The Information Commissioner’s Office and the Financial Conduct Authority published a joint update on GDPR. The statements confirmed the opinion of the two regulators that there were no incompatible requirements between their regulations. The statement set out how the two regulators were working together and how they would tackle remaining questions in the run up to the May deadline for implementation.

The Serious Fraud Office issued a second charge against Barclays Bank Plc relating to its fund raising in 2008 through Qatari investors. The charge is one of providing unlawful financial assistance between Barclays Plc and Barclays Bank Plc. The practice of financial assistance to purchase your own shares is contrary to company law. The SFO have already laid charges against Barclays and four executives relating to the financing.


A Rabobank subsidiary agreed to pay Department of Justice $369m for failures in anti-money laundering, which allowed Mexican drug gangs to move money. A branch of Calexico was located close to the Mexican border and churned noticeably high amounts of cash without performing basic checks. The bank pleaded guilty to impeding regulators investigating the matter; it was also found to have ignored red flags such as frequent withdrawals of amounts just below the $10,000 limit on transaction disclosures.

Concerns about cryptocurrency bubbles escalated, with senior figures urging regulatory action to tackle the growth of the new tech based currencies. Yves Mersch, of the Executive Board of the Central Bank and Agustín Carstens, general manager for the Bank of International Settlements, both raised concern about the potential impact on the mainstream economies and banking systems. French and German finance ministers called for the issued to be discussed at the next G20 summit in March. Separately JPMorgan chief Jamie Dimon warned his staff that he would fire anyone caught trading bitcoin whilst at work. Meanwhile the European Commission launched the EU Blockchain Observatory and Forum.

Topics covered by Better Regulation include
  • BRRD
  • Banking Structural Reform
  • Basel
  • Benchmarks Regulation
  • Brexit
  • Capital Markets Union
  • Capital Requirements Legislation
  • Central Securities Depositories Regulation
  • Credit Rating Agencies Regulation
  • Deposit Guarantee Schemes Directive
  • Dodd-Frank
  • EMIR
  • GDPR
  • Solvency II
  • Insurance Distribution Directive
  • Interchange Fees Regulation
  • Market Abuse/Insider Dealing
  • Markets in Financial Instruments Legislation
  • Money Laundering Directives
  • Money Market Funds Regulation
  • Mortgage Credit Directive
  • Payment Services Directive
  • PRIIPs Regulation
  • Prospectus Directive
  • Ring-fencing
  • Securities Financing Transactions Regulation
  • Securitisation Regulation
  • Senior Insurance Managers Regime
  • Senior Managers Regime
  • Undertakings for Collective Investment in Transferable Securities Directive