February, 2017
Issue No. 15 / Archive
Global News
  1. Theresa May to seek hard Brexit by leaving EU market

    United Kingdom Prime Minister Theresa May has signalled plans for a hard Brexit by saying she’s willing to quit the European Union’s single market for goods and services to regain control of Britain’s borders and laws. May has indicated a withdrawal from tariff-free trade with the region in return for the ability to curb immigration, strike commercial deals with other countries, and escape the jurisdiction of the European Court of Justice. Experts expect her speech to cause a market correction, which could send the pound lower. According to May, an overwhelming majority of people have said they need to get on and make Brexit happen. She is expected to seek a transitional phase between splitting from the EU and the beginning of a new trading relationship in order to avoid fallout from the breakup and grant businesses some certainty over the outlook.

    Source: The Hindu Business Line, January 16, 2017

  2. Deutsche Bank fined for serious anti-money laundering control failings

    German lender Deutsche Bank has received a new $204 million fine for inadequate anti-money laundering controls. The British regulator Financial Conduct Authority (FCA) accused Deutsche Bank of exposing the U.K.'s financial system to the risks of financial crime between January 2012 and December 2015. According to the FCA, Deutsche Bank failed to properly oversee the formation of new customer relationships and the booking of global business in the U.K. and ordered it to pay the £163 million charge ($203.83 million). Due to inadequate controls, Deutsche Bank customers and DB Moscow - its Russian arm - transferred more than $6 billion from Russia to overseas accounts through Deutsche Bank in the U.K. in a process called ‘mirror trades’. The fine comes after the bank announced it would pay $425 million to a banking regulator in New York over a similar ‘mirror trading’ scheme that transferred $10 billion out of Russia.

    Source: CNBC, January 31, 2017

  3. Investment banking fees fall 7 percent in 2016

    Investment banking fees fell 7 percent worldwide in 2016, dragged down by a 23 per cent fall in equity capital market (ECM) fees, raising the pressure on banking giants fighting to restore profitability, according to data from Thomson Reuters. The sharpest falls were in Europe, the Middle East and Africa, where a 20 per cent drop in total fees in southern Europe, still suffering from the fallout of the 2008-09 financial crisis, depressed the wider region. The decline hit global investment banks battling to regain profitability after the financial crisis and ensuing regulatory changes made it harder to profit from their traditional lines of business. Banks' takings from debt capital markets (DCM) underwriting totalled $24.8 billion, up 6 per cent compared to 2015, increasing DCM's contribution to overall fees to 29 per cent from 26 per cent. Fees paid out by the biggest financial sponsors saw a sharp decline and dropping its spend by 35 per cent and Blackstone Group lost the number one spot to Carlyle Group which spent $395 million worldwide.

    Source: Reuters, January 04, 2017

  4. Western Union admits to aiding wire fraud, to pay $586 million

    Western Union Co., the world's biggest money-transfer company, agreed to pay $586 million and admitted to turning a blind eye as criminals used its service for money laundering and fraud. Western Union has over half a million locations in more than 200 countries and admitted to aiding and abetting wire fraud by allowing scammers to process transactions, even when the company realized its agents were helping scammers avoid detection. With the help of Western Union agents, Chinese immigrants used the service to send hundreds of millions of dollars to pay human smugglers, wiring the money in smaller increments to avoid federal reporting requirements. Fraudsters offering fake prizes and job opportunities swindled several thousand U.S. consumers, giving Western Union agents a cut in return for processing the payments. Between 2004 and 2012, the Colorado-based company knew of fraudulent transactions but failed to take steps that would have resulted in the disciplining of 2,000 agents.

    Source: Reuters, January 20, 2017

  5. Whistleblower wins 13-year campaign against HSBC

    A whistleblower, Nicholas Wilson, won a 13-year battle against HSBC, resulting in a multimillion-pound compensation payout to thousands of people. The Financial Conduct Authority (FCA) said HSBC had voluntarily agreed to set up a £4m compensation scheme for people who had lost out financially as a result of having to pay debt collection charges imposed by two subsidiaries of the bank. The money will be shared between around 6,700 people who held credit cards with HFC Bank and John Lewis Financial Services, both of which are now part of HSBC. The announcement represents a victory for the whistleblower, who has devoted years to pursuing this issue. The case involves HFC and John Lewis Financial Services customers who were struggling with their credit card payments. The FCA has said that between 2003 and 2009, those who fell into arrears were referred to the firms’ solicitors, who added 16.4 per cent of the balance to the account as a ‘debt collection charge’. This flat-rate charge was identified as unreasonable by the Office of Fair Trading in 2010 as it did not reflect the actual costs of collecting the debt.

    Source: The Guardian, January 20, 2017