The Royal Bank of Scotland reported its first profit in 9 years since the financial crash. The Financial Conduct Authority and the United States Commodity Futures Trading Commission announced collaboration plans on Fin Tech. The Chinese Communist Party prepared for the removal 5-year limits on its leadership, which would allow President Xi Jinping to rule for life. The United States further increased sanctions on North Korea targeting the country’s maritime industries. Here is our summary of the stories that matter in finance and regulation from the last two weeks.


The Irish Times reported that the Department of Finance was challenging the European Central Bank’s classification of restructured home loans as non-performing. Restructured loans remain classified as non-performing loans, with the ECB pushing banks to reduce bank exposures. However, many of those loans could now be classified as performing, following restructuring agreements with borrowers. Ulster Bank confirmed it was looking to sell as many as 7,000 non-performing loans and had set aside €68m in its accounts; Permanent TSB Bank also confirmed it was looking to sell some of its €4bn portfolio of non-performing loans.

RaboDirect announced its withdrawal from the Irish market with effect from 16th May 2018. The bank has 90,000 customers and €3bn of deposits. The move follows a decision from Dutch parent Rabobank Group to simplify its business model. The group will continue its activities in corporate banking in the country. It confirmed that customers will need to move their accounts and that it would pay interest in full on notice accounts.

Michael Walsh, the former non-executive chairman of the Irish Nationwide Building Society, reached a settlement agreement with the Central Bank resulting in a disqualification of three years and a fine of €20,000. Mr Walsh admitted breaches under financial services law relating to the building society’s Credit Committee, the non-disclosure of risk reports to the INBS Board of Directors and the failure of the building society to establish a credit risk policy for profit share agreements. The settlement agreement had the effect of removing Mr Walsh from the Central Bank Inquiry into the INBS. The Chairperson to the Inquiry gave her opening statement on the fifth module of the investigation into Suspected Prescribed Contraventions, relating to the operation of that Credit Committee.

The Central Bank of Ireland made a statement on Irish authorised CBL Insurance Europe dac, after one of its major re-insurers, CBL Insurance Limited, was placed into interim liquidation by the High Court in New Zealand, on application of the Reserve Bank of New Zealand. CBLIE provides specialist insurance across Europe; the company announced that it continued to operate and that all insurance policies remained in force but that it was writing no new business. The Central Bank confirmed it was consulting with European regulators on next steps.


ABLV Bank AS in Latvia was mired in crises and was deemed to be failing or likely to fail under the Single Resolution Mechanism. Latvia’s third largest bank has €3.6bn of assets but struggled to attract liquidity after the United States Treasury invoked provisions of the Patriot Act which limits other banks ability to deal with it, following allegations that it was involved in the funding of the North Korean regime and money laundering. The Single Resolution Board confirmed that it would not take resolution action, instead leaving the matter to the Latvian authorities. Meanwhile the governor of the Latvian Central Bank, Ilmars Rimsevics was suspended as he denied allegations of bribery. The country’s Prime Minister Maris Kucinskis stated that his country would slash the amount of foreign deposits in his country’s banks and confront the money laundering allegations.

The delay to the Insurance Distribution Directive was approved by the European Council. The transposition deadline will now be 1st July 2018 with an application date of 1st October 2018. EIOPA published its latest quarterly insurance statistics for Solvency II, which looks at assets held as well as premiums, claims and expenses, on a country basis.

The European Banking Authority issued Guidelines on the supervision of significant bank branches which competent authorities and financial institutions are required to comply with. The joint European Supervisory Authorities issued a pan-European warning to consumers on buying virtual currencies. They were described as high risk unregulated products which were unsuitable for investment, savings or retirement planning.

   United Kingdom

In Brexit news, the UK cabinet met at Chequers to decide its Brexit policy ahead of the March negotiations with the European Union; the UK will propose three ‘buckets’ where some industries will remain fully aligned to EU regulation whilst some will diverge and others will be subject to common regulatory goals. Prime Minister Theresa May is to expand on the idea in a key note speech but Donald Tusk, president of the EU Council, responded that the idea was ‘pure illusion’. Boris Johnson appealed to Remain supporters in a key note speech and David Davis assured his audience that there would be no ‘Mad Max’ outcome from Brexit. Meanwhile the Labour Party confirmed it would seek to remain in the Customs Union with the EU, giving rise to the possibility that Conservative Party rebels might vote with Labour MPs in the House of Commons. Meanwhile the Irish government confirmed that it was looking at a range of measures, including state aid, to offset the predicted damage of Brexit to its agricultural economy.

Dominic Chappell, the former owner of BHS was fined £50,000 plus costs by Barkingside Magistrates Court, following his conviction for failing to provide information to the Pensions Regulator. He was previously convicted on three counts.


India’s Punjab National Bank suffered a $1.8bn fraud at its Mumbai branch. A deputy branch manager and associate at the country’s second largest state-backed bank were believed to have advanced guarantees to certain customers, which allowed those customers to obtain overseas funding. The bank did not hold a central record of its guarantee obligations, whilst the branch used software which did not generate an approval request for the Head Office.

Chinese authorities seized control of Anbang Insurance Group and arrested its chairman Wu Xiaohui, on concern that the company had illegal business operations which could endanger the company’s solvency. The China Insurance Regulatory Commission intends to keep the company as a private enterprise whilst restructuring its shareholding. The company came to international prominence when it bought the Waldorf Astoria hotel in New York in 2014 and was described as a ‘platform insurer’. The regulator was reported to be concerned about significant redemptions due on wealth products which the insurance would struggle to repay.

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