Category Archives: Financial sector

£1.1bn in fees, 3.1m hours, 14 years: the UK cost of winding up Lehman Brothers

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PwC, administrator of Lehman’s London arm since bank’s failure in 2008, secures three more years to finish process

Administrators will spend at least three more years winding up the London-based arm of Lehman Brothers, swelling the almost £1.1bn in fees that PwC has already raked in since the bank’s calamitous collapse in 2008.

PwC has secured court approval to extend the administration process for the investment bank’s European hub to 2025, given the “complexity of unwinding the group’s affairs” after one of the biggest corporate failures in history.

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Kwarteng had ‘all the advice’ but disregarded warnings on mini-budget, MPs told

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Treasury officials tell select committee they set out impacts of £45bn plan for former chancellor

Kwasi Kwarteng disregarded warnings that his £45bn mini-budget could trigger a backlash on the financial markets, Treasury officials told MPs today.

The department’s permanent secretary, James Bowler, said he was “absolutely confident Treasury officials set out the right advice” to the then chancellor.

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Jeremy Hunt to outline plans for shake-up of City regulation

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Chancellor expected to target senior managers’ regime and ringfencing rules in 30-point package

Jeremy Hunt is due to unveil a 30-point package of City policy changes on Friday that will involve rowing back on regulations in order to boost competition and growth.

The chancellor’s announcement, referred to as the “Edinburgh reforms”, will outline how the government intends to “review, repeal and replace” a host of rules that were introduced to protect savers and the taxpayer after the 2008 financial crisis, but which ministers now believe risk hindering the success of London’s banks and insurers compared with their overseas peers.

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Revealed: UK local councils deposit taxpayers’ cash in Qatar state bank

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Town halls and finance firms say they support LGBT rights but send money to World Cup host where homosexuality is illegal

The rainbow flag flew above the Bourne Corn Exchange as South Kesteven council embraced LGBT history month.

A year after voting against such a gesture the Lincolnshire local authority declared itself pleased “to celebrate and recognise the […] rights of lesbian, gay, bisexual and transgender people”, hoisting the flag outside its headquarters in 2019.

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Credit Suisse to cut 9,000 jobs and seek billions in new investment

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Shake-up aims to draw line under series of scandals and new £3.5bn loss at Swiss bank

Credit Suisse has disclosed sweeping plans to cut 9,000 jobs and raise billions of pounds from investors in a Saudi-led funding round, as part of a company-wide overhaul meant to draw a line under a series of scandals and help it recover from a £3.5bn loss.

The announcement follows months of speculation over the scale of change scheduled under its new boss, Ulrich Körner, who has been tasked with scaling back the investment bank and slashing costs.

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The Bank of England’s lifeboat is in choppy waters with its bond buying

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Pensions hedging crisis shows how the City never seems equipped to handle the next big financial hazard

Pension funds have found themselves embroiled in a byzantine world of exotic financial trading that many of them appear to have badly misunderstood.

On Tuesday, a third rescue mission in little more than a fortnight was announced by the Bank of England, which is reprising its role in the 2008 financial crisis as the City’s lifeboat.

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Serco injected £60m to prop up pension fund after market meltdown

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£1bn scheme is latest to scramble to raise cash after chancellor’s tax-cutting mini-budget sparks turmoil

The pension scheme trustees at the government contractor Serco have been forced to tap the company for £60m of emergency support after the UK’s financial markets meltdown this week.

Serco’s £1bn pensions scheme is the latest to scramble to raise cash after a plunge in the pound and a meltdown in UK bond prices triggered calls on fund managers to provide collateral for niche financial products they had taken out to hedge against swings in the value of their investments.

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City sceptical about benefits of scrapping cap on banker bonuses

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Sources at largest banks say the did not lobby for move nor expect it to result in major changes to pay packets

When City of London executives were summoned to No 11 Downing Street earlier this month, they were promised reforms that would boost growth, attract talented bankers and usher a new era of prosperity for financial services.

But what the chancellor, Kwasi Kwarteng, failed to mention to bank bosses was that their pay would become a lightning rod for controversy in the mini-budget that followed.

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Kwarteng plan to lift cap on bankers’ bonuses infuriates unions

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Unite leader deplores prospect of post-Brexit deregulation drive ‘when millions are struggling’

Unions have reacted with fury to the prospect of the government scrapping a cap on bankers’ bonuses, as ministers geared up for a return to near-normal politics next week, topped by an emergency mini-budget on Friday.

Kwasi Kwarteng, the chancellor, who will set out plans for tax cuts and give more details about the government’s plans to limit rising energy bills, is also considering whether to shed the legacy of an EU-wide cap on bonuses of twice an employee’s salary, imposed after the 2008 financial crash.

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UK forces crypto exchanges to report suspected sanction breaches

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New rules in response to Russia’s invasion of Ukraine cover all notionally valuable digital assets

Crypto exchanges must report suspected sanctions breaches to UK authorities under new rules brought in amid concerns that bitcoin and other cryptoassets are being used to dodge restrictions imposed in response to Russia’s invasion of Ukraine.

Official guidance was updated on 30 August to explicitly include “cryptoassets” among those that must be frozen if sanctions are imposed on a person or company. As well as digital currencies, such as bitcoin, ether and tether, cryptoassets could include other notionally valuable digital assets such as non-fungible tokens.

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City regulators clears HBOS ex-bosses of misconduct over bank’s near-collapse

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Watchdogs say six-year investigation had determined no grounds for action against unnamed individuals

City regulators have cleared former bosses of HBOS of misconduct in the lead-up to its near-collapse in 2008, despite previously having blamed the bank’s board for its failure.

The Bank of England and Financial Conduct Authority (FCA) said on Friday that they had concluded “rigorous and forensic investigations” into unnamed former managers, after gathering more than 2m documents, interviewing former bank managers, and undertaking “substantial analysis” of the bosses’ roles and responsibilities at what was then the country’s biggest mortgage lender and savings institution.

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KPMG partner banned from accounting after misleading regulator over Carillion

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Peter Meehan, who led audit of failed outsourcer, will also have to pay fine of £250,000

The KPMG partner who led the audit of failed outsourcer Carillion has been banned from the accounting profession for a decade for providing false and misleading information to regulators.

Peter Meehan will also have to pay a fine of £250,000 after a Financial Reporting Council (FRC) tribunal found that he and other KPMG managers had misled the regulator using forged documents.

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FCA investigates Wise co-founder after tax default

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Kristo Käärmann was included on HMRC’s list of deliberate tax defaulters in September 2021

The UK’s financial regulator is investigating the co-founder of payments company Wise after he failed to pay his taxes.

Kristo Käärmann was included on HM Revenue and Customs’ list of deliberate tax defaulters in September 2021, after failing to comply with his tax obligations. He failed to pay £720,495 for the 2017-18 tax year and received a fine of £366,000, the tax authority said.

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City donations worth £15m raise concerns over influence on UK politics

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Total donated to parties by financial firms and individuals tied to the sector over two years, report says

Concerns have been raised over the City’s influence on Westminster, after a report found financial firms and individuals tied to the sector donated £15m to political parties and gave £2m to MPs during the pandemic.

The campaign group Positive Money tallied the gifts, expenses and donations handed to MPs, peers and their parties, as well as the value of income from politicians’ second jobs, saying it contributed to finance’s “oversized influence” on policymaking.

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Neil Woodford investors sue administrators of collapsed fund

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Law firm brings group litigation aiming to recoup at least £18m on behalf of 1,500 people

Investors who lost millions in the collapse of a fund run by the former star stockpicker Neil Woodford have brought group litigation against the administrator in hopes of recouping at least £18m.

The law firm Harcus Parker lodged its first batch of claims on behalf of 1,500 savers at the high court in London on Friday morning. Woodford himself is not the target – the claim is against the administrator of his fund, Link Fund Solutions, which is accused of failing in its duty to protect investors. Lawyers expect to expand the suit to represent at least 7,000 claimants.

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Unilever shares rise as billionaire investor Nelson Peltz joins board

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Hedge fund boss – whose daughter married Brooklyn Beckham – holds 1.5% stake in Unilever

Unilever’s share price has risen after the consumer goods company announced that the billionaire activist investor Nelson Peltz is to become a board member.

Peltz, the US founder and chief executive of Trian Fund Management, has been building his Unilever stake since January amid growing speculation that he will push the Dove soap and Marmite manufacturer to shake up its sprawling operations, with the company under increasing pressure to sell off brands or consider a break-up.

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Pay gap in UK between bosses and workers likely to widen in 2022

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After narrowing during pandemic, analysis suggests FTSE 350 CEOs will collect 63 times average median pay at their companies

The gap between the pay of bosses and employees will widen again this year after narrowing during the pandemic, research suggests.

FTSE 350 chief executives are expected to collect 63 times the average median pay of workers at their companies , according to the High Pay Centre thinktank, which campaigns for fairer pay structures.

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Cutting City regulation risks another financial crash, say economists

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Leading economists publish letter to Rishi Sunak in response to proposed financial services and markets bill

A group of 58 leading economists and politicians, including the former business minister Vince Cable, has written to the chancellor to say that scaling back City regulation will put the UK at risk of another financial crash.

The open letter, which has also been signed by the former Greek finance minister Yanis Varoufakis and Columbia University professor Adam Tooze, was sent in reaction to the Queen’s speech, which outlined Rishi Sunak’s plans to “cut red tape” through a financial services and markets bill.

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Women-led UK firms struggle to attract equal investment, study finds

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The Gender Index aims to support growth of female-led companies, which tend to have lower turnovers

Companies led by women disproportionately attract less investment than those led by men, according to a large-scale study of female entrepreneurship in the UK.

The Gender Index, which was launched on Thursday, is a research study of all 4.4m active UK companies and allows users to track the impact of female-led firms on the economy via an online, interactive tool.

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NatWest returns to majority private control as it buys back £1.2bn in shares

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UK government sells more of stake in group formerly known as Royal Bank of Scotland at a loss over 2008 price

NatWest Group has returned to majority private ownership after it agreed to buy back £1.2bn of shares from the UK government, more than 13 years after the company was bailed out by taxpayers at the height of the financial crisis.

The company, formerly known as Royal Bank of Scotland Group (RBS), said it had agreed to make an off-market purchase of 550m shares, or 4.91% of its share capital, from HM Treasury at Friday’s closing price of 220.5p, in a statement to the stock market on Monday.

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