Regular readers of Financial Regulation Matters (and, in truth, any financially-concerned writing) will be more than aware that President Trump has his sights set firmly on the Dodd-Frank Act’s destruction; in fact, he is unequivocal in his aims to remove regulations that ‘ enshrine too big to fail and encourage risky behaviour ’. Yet, his planned dismantling, like almost every other ‘huge’ plan that he declared on his way to the White House, has not come to fruition and the new strategy is, seemingly, based upon a piecemeal approach and taking victories whenever one presents itself; recently, with certain actions taken at a Government agency created by the Dodd-Frank Act, Trump sensed a victory and acted. Yet, things have not gone smoothly and in this post we will assess the development of this story and some of the implications. It has been suggested on numerous occasions that the roadblocks that have been erected in Trump’s remarkable path will force his Administration to th...

The second post today is a short follow up from a post earlier in the year that looked at the leniency of the deterrent selected for the accounting industry. In that post we looked at how the SEC and the Financial Reporting Council (FRC) were handing out ‘record fines’ of £5m here or $6 million there, something which onlookers noted was ‘ less than half a day’s work ’ for these top-four Auditors. Therefore, you can imagine this author’s delight when reading the headline in the Financial Times yesterday that a ‘ review recommends larger fines for accountancy firms ’; yet, regular readers of Financial Regulation Matters know that there was no such delight, because the rest of the article could have been written without one having read it. Obviously, the article goes on to confirm that, as suspected, the increase in fines was not really worthy of a headline, if the increase even goes ahead at all. In the report commissioned by the FRC and led by for Court of Appeal Judge Christ...

One does not have to search for long in the archives of Financial Regulation Matters to find criticism of the Conservative Government. Whether the focus is on the increase in food banks , tax avoidance , elitism , siding with business over the public , or a level of privatisation that is forcing the U.K. into a corner it will struggle to get out from, there has been no shortage of criticism. However, the first thing to note is that today’s post is not, nor the blog moreover, pro-Labour (or, in fact, any political party); Labour are simply just as culpable as their Conservative brethren. To demonstrate this point, today’s post, the first of two, will look at the recent ‘landmark study’ that suggested the Conservative Party’s austerity measures have caused upwards of 120,000 deaths, unnecessarily, since embarking upon this attempt to recoup the losses caused by the financial sector; yet, the analysis will do so from within the parameters of the need to understand economic cycles. ...

Today’s second post looks at the ever-developing story that the British-based multinational construction firm Carillion has today issued its third profit-warning since July , in addition to its suggestion that it is about to breach conditions attached to loans that it is accountable for. With the increasing utilisation of so-called ‘ Public Private Partnerships ’ and ‘Public Finance Initiatives’, as discussed in a recent post here in Financial Regulation Matters , it is worth discussing the potential effect that this financial bombshell will have; will it cause the socially-integrated company to begin to spiral and ultimately fail, or will it be the latest demonstration of a company that is ‘ too big to fail ’, as one onlooker has suggested today. Carillion is proving to be synonymous with this particular period of Britain’s economic history, with the firm winning a number of lucrative and highly-visible contracts, including skyscrapers in Manchester , and of course the infamou...

This very short commentary, the first of two posts today, reacts to the news that Standard & Poor’s (S&P), the world’s leading credit rating agency, is to open a branch in Riyadh, the capital of Saudi Arabia. Only very recently did we discuss the recent developments within Saudi Arabia here in Financial Regulation Matters and, as part of that push to reorganise under the ‘ Vision 2030 ’ banner which is being developed by the Crown Prince, the oil-rich state is attempting to move into the financialised marketplace more; the effect of this will be remarkable for the growth of the country, but will also open it up to the iniquities of the marketplace that plague their Western colleagues; the parasitic emergence of S&P just before Saudi Aramco is floated and the country begins its move away from petro-dollars is no coincidence. The question, then, is what exactly is the country letting itself in for? S&P received approval to locate to Riyadh this time last year, a...

In this post, the focus is on the issue of referenda, again, in the context of the British Electorate’s decision to secede from the European Union in 2016. We have looked at the issue of ‘Brexit’ on a number of occasions here in Financial Regulation Matters , for obvious reasons, but only really once from a systemic/theoretical viewpoint. Yet, in light of comments today from one of the most influential business leaders in the world, it is perhaps timely to revisit the issue once more and look more systematically at the issue of referenda and their effects. In this modern world where direction is presented via a Tweet, Lloyd Blankfein, the CEO of Goldman Sachs, delivered a telling tweet earlier today that will surely have an effect upon development in the U.K. In his Tweet he stated that there was ‘lots of hand-wringing’ from CEOs regarding Brexit, and that with the Brexit decision being so ‘monumental and irreversible’, ‘ why not make sure consensus [is] still there ’? Effectiv...

It has been nearly two weeks since the news broke that yet another offshore law firm’s accounts had been hacked and subsequently leaked. After the ‘ Panama Papers ’ scandal that broke in 2016, this latest leak – the so-called ‘Paradise Papers’ – has the capacity to engulf a large number of particularly influential and recognisable people. Yet, it is worth questioning a. what this leak actually portrays, b. what the effect of the leak may be, and c. what the leak tells us about the larger picture? To answer those questions, the following seeks to introduce the leak, and provide some context for the claims that are consistently emanating from it. The so-called ‘Paradise Papers’ leak, which is the catchy title being given to the leak of documents from a Caribbean-based Law firm called Appleby (its ‘fiduciary’ arm is called ‘ Estera ’ after a recent management buyout), is the second-largest document data leak, with the so-called ‘Panama Papers’, derived from the Law firm Mossack Fon...

Today’s short post serves to review the recent movements of French regulators aiming to crack down on large-scale tax evasion taking place in and through its jurisdiction. Le Parquet National Financier (PNF) are France’s largest financial regulator in terms of financial-based crime, so equivalent really to the Serious Fraud Office in the U.K., and we looked at their work recently here in Financial Regulation Matters with regards to their investigation of Airbus and its potential involvement in widespread bribery. Today, however, we will review their recent work with regards to tax evasion, which is particularly pertinent given the recent ‘ Paradise Papers ’ scandal which will be the focus of tomorrow’s post. For HSBC, one of the world’s largest and most widespread banks, this specific problem today stems from the group’s Swiss Private bank arm, and relates specifically to claims that it helped wealthy clients evade taxes – it was claimed that more than €1.6 billion’s worth of ...

Today’s post is a short commentary on the latest development in a story which we have already covered here in Financial Regulation Matters . In early October we looked at the Financial Stability Oversight Council (FSOC) and their decision to remove AIG, the insurance Giant that played a central role in the Financial Crisis, from its designation as a ‘Systemically Important Financial Institution’ (SIFI). In the post we discussed how some of the world’s most influential financial figures, like Carl Icahn, had been devoting considerable time and effort to seeing this designation removed and how, ultimately, the decision could be seen as Donald Trump and his Administration making good on a number of promises to scale regulation back in the coming years. On Friday this deregulation picked up pace, but this time on a global level, and for this post these developments signal a clear marking of a systemic shifting through the economic cycles – however, this has connotations. The detai...

In yesterday’s post we looked at the issue of regulatory independence, and how the mandate of regulators can be manipulated and warped to serve the so-called ‘greater good’. In that post we focused on the FCA with regards to its bending for Saudi Aramco and the impending record-breaking IPO, but today we shall look at something far more political. This is not to say that the FCA bending for Saudi Aramco, in light of the impending uncertainty that is Brexit, is not a political issue, which of course it is, but the case we are focusing on today is particularly political and, potentially, has incredibly wide-reaching consequences. The case in point for this post is the news that the potential merger between AT&T and Time Warner is being held up by the Justice Department, with the alleged sticking point being that Time Warner (and AT&T once they merge) must sell the company that owns CNN. Whilst this may seem inconsequential, the connection between CNN and US President Donald ...

Earlier in the year we looked at the British Government’s attempts to attract the Saudi Energy Giant Saudi Aramco to the U.K. , for the purposes of using the London Stock Exchange (LSE) as the foreign listing organisation for what will be the largest Initial Public Offering (IPO) in history. In the post we discussed how the Financial Conduct Authority, the regulator tasked with regulating the listing mechanisms within the jurisdiction, was actively attempting to reduce the stringent rules surrounding who can use the LSE to enable Saudi Aramco to bring its record-shattering IPO to London. The obvious issue was that the reduction of standards related directly to concerns that have been mentioned almost consistently here in Financial Regulation Matters and across the majority of the literature/commentary, in that the uncertainties that are fundamentally intertwined with Brexit will cause a ‘race to the bottom’, in a number of sectors including the regulatory sector. There have been ...

Today’s post looks at what, potentially, could be the next large-scale case of corruption, and that is the amalgamation of allegations of corruption perpetrated by the European-based Aero Corporation Airbus. Whilst we have looked at the Aero industry closely recently, particularly with regards to the trade-dispute between Bombardier and Boeing, this post can perhaps be regarded as the next instalment of our analyses into the work that the Serious Fraud Office (SFO) is conducting, because it is extremely likely that the SFO will be taking action against Airbus at some point. A previous post regarding the SFO looked at its reprimanding of Rolls-Royce , and there are many similarities between the actions taken in that case, and the actions that may be taken in this particular case; yet, the political elements that are included in this case mean that the outcome may be much different to what is currently being projected. Firstly, it is worth reviewing Airbus’ current situation, bec...