As usual here in Financial Regulation Matters , today’s post looks at something we have assessed on a number of occasions (which likely hints at the systemic and continued nature of these issues that are identified on a regular basis here). Today’s post focuses on the Financial Reporting Council (FRC) as pressure upon continues to increase. Its position, and future as a regulator, is being called into question more and more recently on the back accounting scandals (like that seen with Carillion), but recently the FRC has announced measures which it hopes will be seen as being representative of a proactive regulatory culture within the organisation. The news came yesterday that the FRC is endeavouring to incorporate new procedures into its regulation of the audit industry, with the regulator taking specific aim at the so-called ‘Big Six’ (in reality it is probably a ‘Big Four’). The new approach dictates that when one of the six firms cited – KPMG, Deloitte, PwC, EY, Grant Thornt...

Today’s post reacts to the recently published Parker Review , which is a final report led by Sir John Parker in association with Ernst & Young and Linklaters. The report, entitled A Report into the Ethnic Diversity of UK Boards , aims to shine a light on the issue of representativeness on FTSE Boards, with a specific focus on FTSE 100 Boards, and then prescribe some recommendations which it hopes will have a positive effect in this particular field. So, in this post, we will take a closer look at the Report and assess whether it may achieve its aims and, more importantly, whether its aims are even useful or correctly constructed in the first place. We have looked at this issue of representativeness at Board level before here in Financial Regulation Matters , but mostly from a gender-related viewpoint ( here and here ). However, as the Parker Report states in its preamble: ‘ U.K. Boards have made great progress on gender diversity but we still have much to do when it comes t...

This post focuses upon two particular elements that have been somewhat of mainstays here in Financial Regulation Matters , and those are the Treasury Select Committee and the tuition fee issue in the U.K. Upon Andrew Tyrie’s departure as Chair of the Treasury Select Committee in April of this year, we asked who it would be replacing him and how vivacious would they be in utilising the considerable influence that the Committee has. We had a brief taste of what Tyrie’s successor – Nicky Morgan – had to offer with her preliminary calls for RBS to release the controversial and likely extremely damaging report into the conduct of its ‘Global Restructuring Group’. Now, Morgan is returning to her old stomping ground from her time as Education Secretary and is launching an enquiry into the student loan system , ultimately aiming to examine recent policy changes like the tripling of tuition fees and the recent hike in interest rates related to the loans taken by students. So, today’s post ...

Today’s post aims to present somewhat of a round-up of a number of pieces of news coming from the Airline industry in recent weeks (and months) because, recently in particular, the divergence between those in the industry doing well and those that are not seems to be growing at a particularly rapid rate. Recently we looked at the trade battle that is developing between Boeing and Bombardier , but in this post the focus will be on the recent collapse of Monarch, Air Berlin, and the troubles at Ryanair, although it will be discussed that not all airlines are feeling the heat in this marketplace, with certain players making significant moves to take advantage of their competitors’ downfall or change in strategy. Firstly, the two stand-out stories from the airline industry are worth analysing because the effect that they are having will be felt for some time. In August of this year, Air Berlin filed for bankruptcy after its leading shareholder, Etihad Airways, withdrew financial su...

Today’s post picks up on the news that Moody’s has determined that the uncertainty that has resulted from the recent General Election in the U.K. ‘ poses a risk to Britain’s credit rating ’, whilst S&P has noted that ‘ this latest bit of instability can only weaken the business environment and consumer confidence ’. In this short post, we will examine the ‘findings’ of the rating agencies more closely but, importantly, we will have the following criticism – from leading CRA critic Professor Frank Partnoy – in mind: ‘ there is overwhelming evidence that credit ratings are of scant informational value ’. To begin with, the report from Moody’s, which is available here , details a number of elements which Moody’s analysts believe are important pieces of information for investors. The report discusses how the ‘inconclusive election outcome will complicate and probably delay Brexit negotiations’, and how fiscal risks will increase because of a lack of political consensus; the re...