A Review of the Current Position

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Posted in:Banking and Finance|August 6, 2015 | Join the mailing list

The Conservative Government was unexpectedly returned with an over-all majority. For a party generally associated with light-touch regulation their output from a financial and banking perspective has been relatively prolific. We review here some of the
reports and events that have occurred.

There are three principal areas:

1.    Regulation and competition;
2.    Sale of RBS shares;
3.    Sale of Lloyds Shares.

The Chancellor of the Exchequer spoke at his annual Mansion House speech.  He released some very significant information and two important documents in that speech.

The Chancellor’s speech can be found here

Mr Osborne released a letter from the Bank of England regarding the sale of RBS shares. It is clear that The Governor was in favour of selling the RBS shareholding. 
The letter to and the letter from the Governor of the Bank of England can be seen here.

The Chancellor had instructed Rothschild & Sons, the finance house, to investigate the issues relating to retention or sale of the Government’s stake in RBS. 

The final report (which is only 16 pages) can be seen here. 
The Report is firmly in favour of a slow but steady selling down of the shares.

Finally, the speech also saw the release of a very important and critical review.  The Fair and Effective Markets Review report is essential reading to any person wishing to understand what is being proposed for the wholesale markets in regards to derivatives
(such as Interest Rate Hedging Products and many other forms of derivatives that drive wholesale banking) and foreign exchange.  The report was commissioned as a consequence of the serious and sustained abuses of the markets that led to the 2008 collapse.The
report can be found here.

The above noted documents are important.  It would not do justice to the importance of their content to attempt to summarise them here and they are recommended reading.  We will include a review of the important outcomes that will impact UK Small and Medium
Enterprises in the coming weeks.

If there are any issues in this update or more generally that you would like to discuss, please contact one of our Banking and Financial Regulatory team on 0161 829 2599.

(The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice
should be obtained before taking, or refraining from taking, any action as a result of this article.)

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