In this post, we will review a recent action by the EU that takes into account credit rating regulation, as well as Brexit. It was only last week when we reviewed the most recent regulatory manoeuvrings in relation to credit rating agency regulation , and yesterday it was announced in the business media that the EU have taken another step. However, whilst that step is having very little effect, it is being seen as a direct warning shot to the British as the new British Prime Minister, Boris Johnson, continues to reiterate that the UK will be leaving the EU on the 31 st October, with or without a negotiated exit deal. Rather than regulatory amendments, the EU has taken the unprecedented step of stripping five particular countries of its market rights . On the basis that the EU has warned Canada, Brazil, Singapore, Argentina, and Australia that, for the past 6 years, the rigour of its regulation of credit rating agencies is not equivalent to that of the EU’s regulation of the in...

We have covered the automotive industry on a number of occasions here in Financial Regulation Matters , ranging from posts on emissions-related scandals and issues with the leadership of some of the industry’s largest companies (via Oluwarotimi Adeniyi-Akintola ) to the increased focus on the electrification of the industry . In today’s post however, we shall focus on the current state of the British automotive industry and examine whether the current issues impacting the industry are related to Brexit, as most of the press suggests, or to deeper-rooted issues that may fundamentally affect the future of the industry in the UK. The subject of the auto industry in the post-Brexit era is a complex one. There are materials that are available, and indeed incredibly useful, in order to gain a solid understanding of the issues – see the excellent Keeping the Wheels on the Road: UK Auto Post-Brexit developed by Prof. David Bailey @dgbailey and others as part of the Bite-Sized Brexit ...

Today’s post discusses the recent, and very much expected move of the European Banking Authority from London to Paris. Very much in response to Brexit, the EBA now sits at the junction of a new phase in its development in terms of forming a central component of a new direction for European financial service provision. This post will discuss this move and also assess an interesting and thought-provoking article by Frances Coppola ( @Frances_Coppola ) in a recent issue of Forbes. In November of 2017, Paris and Dublin were tied in the race to be the new home of the European Banking Authority. After the decision of the British electorate to leave the European Union was confirmed, it was deemed essential by the EU that the EBA, and the European Medicines Agency, would both be relocated from London. Whilst the EMA were relocated to Amsterdam, it would be Paris that would emerge victorious in the race to secure the presence of the EBA , in a move that would see the EBA sit in the same ...

In 2017, this author produced an article that examined the potential regulatory framework that exists in the UK where Credit Rating Agencies are concerned ( later published in 2018 ). We spoke about this issue here in Financial Regulation Matters , where we discussed how there may be a need to incorporate sole regulatory responsibility within one of the regulatory bodies should the UK be unable to come to a ‘deal’ with their EU partners. As part of the EU (Withdrawal) Act, the Government has recently come to a decision regarding which body would be responsible for regulating the CRAs in the wake of a no-deal Brexit, and it confirms the findings of the article. However, it is worth revisiting this developing story to examine what the consequences of such a decision may be. It has been decided, as the original article produced by this author predicted, that the Financial Conduct Authority would be the regulatory body charged with supervising the credit rating industry , should th...

We have spoken here in Financial Regulation Matters of the potential for a regulatory race-to-the-bottom in the post-Brexit era. With the U.K. choosing to go out into the economic landscape on its own, the potential for a weakening of regulatory protection to encourage foreign trade and investment is tremendous, and hardly a surprise. Yet, the FCA, as one of the fundamental elements in the regulatory framework that governs the U.K., has no option but to refute any suggestion that the framework will be weakened as a result of Brexit. In this post, we shall examine their latest insistence on the back of what were very telling declarations by leading British politicians. Speaking on a recent visit to Tokyo, the Economic Secretary John Glen told his audience that ‘ we will do whatever it takes to keep the UK as a global hub for financial services and to maintain the City of London as an asset for Europe ’. This follows on from Theresa May telling the UN Summit in New York recently ...

This very brief post provides a small update on a continuing story that has been covered throughout here in Financial Regulation Matters . Tesco has been in the news a lot recently, whether that be on account of aiming to move into the ‘discount supermarket’ marketplace , or on account of a massive amount of job losses as the company goes through a restructuring process, both on the shop floor and across management . However, our focus today will be on providing an update to the ongoing attempted takeover of the wholesale firm Booker. The proposed takeover of Bookers has been a protracted one, and although the deal has been given the go-ahead, slightly controversially, from competition regulators , there are still a number of hurdles to clear before the deal can be completed. Whilst the approval from the competition regulator was a major hurdle, getting everybody on side is perhaps the largest hurdle and, in that sense, the deal still has some way to go before it can cross the...

In the first of a number of posts today, this post looks at some of the noises emanating from the financial elite within the U.K., particularly with regards to Brexit. It should come as no surprise that the decision to leave the E.U. has caused anxiety amongst business leaders within the City, and recent political developments have not made a positive impact in that regard. So, in this post, we shall look at some of the concerns that are being raised, and the impact that certain developments may have upon the City, and also the British society moreover; ultimately, the question developing is how the secession will play out in terms of finding a balance between the decision of the (very slight) majority of the electorate, and business within the U.K. The first development that needs to be examined is the political manoeuvrings that took place last week when, in Parliament, the Government saw its attempt to ‘ promise to give assurances ’ on a Parliamentary consultation over the fi...

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...

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...

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 ...

In today’s post, the focus will be on a few potential M&A (Mergers and Acquisitions) deals that the British competition regulator, the Competition and Markets Authority (CMA), is currently dealing with. Whilst also serving as a review of the recent business news in this field, this post will seek to analyse the complex nature of the CMA’s task and all of the aspects that it must consider; the effect of their decision in a given case will, by its very definition, go on to have massive consequences for those businesses involved and, more importantly, the public which is exposed to the effects of these potential deals. What we will see is that, in a number of cases, the balance which is aimed for will weigh heavier on any given side, but finding a solution to this is almost impossible, if even desirable. First up for us is Tesco and its proposed deal to take over the wholesale company Booker, which is something we have analysed before here in Financial Regulation Matters . The...