How Evolving Regulation is Enabling Overdue Investment in Payment Hubs
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Telegraph
20 hours ago
- Telegraph
Bailey thwarts Reeves in row over Revolut
Andrew Bailey blocked an attempt by Rachel Reeves to set up a meeting between Britain's most valuable fintech company and City regulators. The Governor of the Bank of England intervened owing to concerns about Revolut's summit with the Prudential Regulation Authority (PRA), which was set up to discuss the fintech giant becoming a fully-fledged bank. The Chancellor tried to arrange the meeting as part of her attempts to persuade the $65bn (£56bn) UK-based company to list in London instead of New York. It comes after Nikolay Storonsky, Revolut's chief executive, criticised Britain's 'extremely bureaucratic regulator'. Mr Bailey's intervention, which led to the meeting being cancelled, came amid concerns that the Bank was at risk of political meddling, according to the Financial Times. Revolut is still attempting to become a full-service bank in the UK, a year after it was finally granted a provisional banking licence after a three-year wait. The clash comes after Mr Bailey has issued a series of vocal rebukes of the Chancellor's policies in recent weeks, including her pension reforms and deregulation drive. He openly opposed Ms Reeves's proposed 'backstop' power to mandate pension schemes to invest in British assets just days after the plans were unveiled, saying: 'I do not support mandating. I don't think that's appropriate.' While Mr Bailey was not going to attend the meeting with Revolut, it is understood that officials in the PRA, which is an arm of the Bank, were. Revolut was forced to wait three years for a limited licence after regulators raised questions about its accounts. Auditors had flagged concerns in 2021 after they were unable to verify roughly two thirds of the fintech's revenues. Officials at the Bank of England had initially told Treasury staff they intended to reject the licence application. However, negotiations subsequently resumed, with the Bank insisting on a clean set of accounts and simplified shareholder structure before granting the initial licence last July. Revolut is currently in the Bank's 'mobilisation' stage, which prevents it from holding more than £50,000 in deposits. Full authorisation – which would allow it to make loans and hold protected deposits – can take several months but is meant to take no more than a year. 'Regulators killing the City' Andrew Griffith, the shadow business secretary, who as City minister in the last Tory government clashed publicly with financial regulators, said he sympathised with Ms Reeves. He said: 'Anyone in business knows that culture beats strategy. 'It is the deep-seated culture of risk aversion by regulators which is killing the City. If this Revolut story is true, the Chancellor should use this to double down on regulatory reform.' Mr Bailey was asked by MPs last week if he agreed with the Chancellor's recent claim that regulation is 'the boot on the neck' of business. 'I do not use those terms,' he said. 'There are areas where we clearly should look at [revising regulations]. But we cannot compromise on basic financial stability, that would be my overall message.' Mr Bailey specifically warned Ms Reeves against relaxing so-called ring-fencing rules, which divide retail banking from the risky world of investment banking. The Chancellor last week announced the ring-fencing regime would be 'reformed' as part of her overhaul. She has instructed Emma Reynolds, the current City minister, to review the policies. However, Mr Bailey said: 'The ring-fencing regime is an important part of the structure of the banking system.' One Bank source said: 'If [Bailey] is not reminding people that financial stability is good, then who will?'
Times
5 days ago
- Times
FCA finalises ban on ex-Barclays boss Jes Staley over Epstein links
The City regulator has finally banned Jes Staley from holding top jobs in financial services after the former Barclays boss threw in the towel in his fight with the watchdog over his links to the paedophile Jeffrey Epstein. Staley, 68, took the Financial Conduct Authority to court to overturn its plan to ban him but failed to clear his name, as the Upper Tribunal last month sided with the regulator and ruled that Staley's conduct had amounted to 'a serious failure of judgment'. He had the option to try to appeal against the court's decision but the deadline to seek permission to fight on passed earlier this month. As a result, the FCA this week published its final notice, which implements the prohibition on Staley holding senior management roles in the industry that the regulator first proposed more than two years ago. It also formally imposes a £1.1 million fine on the former bank boss, which he must pay by August 6. The FCA had originally planned a £1.8 million penalty but the court reduced this to take account of deferred shares from Barclays that Staley had subsequently been forced to relinquish because of the controversy. It brings to an end a legal battle that engrossed the City of London and Wall Street, where Staley, an American, was also once a big player. During the trial this year, the Upper Tribunal heard how Staley had told Epstein they had a 'profound' friendship and had referred to the sex offender as 'uncle Jeffrey' in an email to one of his daughters. Under cross-examination by the FCA's barrister, Staley, who is married, also told the court that he had once slept with a member of Epstein's staff. Staley had worked for most of his career at JPMorgan Chase and it was while running its private bank that he came to know Epstein, a financier who was a client of the division. In 2015 Staley became one of the most influential figures in British finance when he took charge of Barclays, the FTSE 100 bank he ran until 2021. After Epstein died in a US prison cell in 2019 awaiting trial on charges of sex-trafficking minors, the FCA asked Barclays about the nature of Staley's relationship with him. The resulting letter from the bank was at the heart of Staley's courtroom battle with the regulator. In it, the bank said that Staley 'did not have a close relationship' with Epstein and that his last contact with the paedophile was 'well before he joined Barclays'. These statements, which were approved by Staley, were misleading, according to the FCA, which said the former Barclays boss had 'acted with a lack of integrity'. The Upper Tribunal agreed with the regulator's findings. The FCA did not allege that Staley was involved in Epstein's crimes. • Jean-Noel Alba, who was previously deputy chief executive of the asset manager H20, has been banned from working in financial services and fined more than £1 million by the City regulator. The Financial Conduct Authority said he had misled it during an investigation into H20, including by asking junior colleagues to create minutes of meetings that had not occurred and by drawing up due diligence research on investments years after those investments had actually been made.
Reuters
5 days ago
- Reuters
UK financial watchdog fines H2O's former deputy CEO, places ban
July 25 (Reuters) - Britain's Financial Conduct Authority on Friday imposed a fine of 1 million pounds ($1.34 million) on Jean-Noel Alba, the former deputy CEO of French asset manager H2O, and banned him from the financial services industry following his conduct during an investigation. H2O in 2019 became the subject of market and regulatory concern over its investments in illiquid bonds issued by several companies related to German entrepreneur Lars Windhorst, who owns investment firm Tennor. FCA said that during its investigation, Alba provided false and misleading statements and documentation to the regulator. "Alba asked junior colleagues to create minutes, including records and minutes of committees, where no formal meetings had taken place," the watchdog said. "Alba also provided due diligence materials, such as investment research, to the FCA that had been created years after the investments had been made, when he had claimed they were produced at the time." In August 2024, H2O voluntarily offered to pay 250 million euros to investors trapped in funds since 2020 and said it would shut its UK regulated operations, escaping a fine for failing to make sufficient checks on risky investments. ($1 = 0.7448 pounds)
