The Brexit referendum delivered a punch to the UK’s pound, but the currency has slowly picked itself up and gained some strength despite the pandemic, once again closing in on the US$1.40 mark in February. How well it fares over the next few months will depend on several factors—including the UK’s COVID-19 response but also the raft of unique issues that the nation will face as it evolves post-Brexit.
Throughout the stress test of the past year, resilience rose to the height of visibility as many organizations faced new and daunting challenges. As a result, operational resilience simultaneously rose to the top of executives’ and regulators’ priorities. In fact, our recent exercises demonstrate that resilience is within the top three priorities on executive radars.
Today’s professional accountant is expected to do more than juggle numbers; he or she increasingly participates in achieving sustainability objectives, which aim to ensure that a company’s resources are used to create not only monetary value but sustainable value today and into the future. To achieve this requires concerted multidisciplinary effort toward enhanced corporate reporting that addresses financial and sustainability concerns, guided by international accounting standards that incorporate sustainable value creation.
The UK’s economy showed promising signs of recovery during the fourth quarter of 2020 but not enough to compensate for a dismal year, which, with its annual 9.9-percent contraction, broke a 300-year record and clocked in among the G7’s worst economic performances. Although 2021 is getting off to a slow start with new lockdown measures, increased vaccination and more consumer spending may fuel a vigorous rebound later in the year.
2020 wasn’t a good year for shareholders scheduled to receive bank dividends. Regulators swiftly put a halt to dividend payments from banks to ward off a pandemic-induced crisis, requiring lenders to conserve capital and distribute it as needed to consumers and businesses. The dividend pipeline is slowly reopening as confidence grows in the banks’ stability, but it may be a while before shareholders receive their fair shares of the profits.
2020 has proved to be an eventful year for ISO 20022, with SWIFT (Society for Worldwide Interbank Financial Telecommunication) and other major market infrastructures opting to postpone the implementation of the new standard. Any assumptions that these delays will provide participants with a respite are unfounded; testing times still lie ahead, and internal project work should reflect this.
In June, The Atlantic published “The Looming Bank Collapse”, a piece by University of California, Berkeley law professor and ex-Morgan Stanley derivatives structurer Frank Partnoy, which generated significant debate over whether a banking crisis in the same mould as that witnessed during the global financial crisis (GFC) is just around the corner.
The Bank of England (BoE) announced on Thursday, September 17, that the Monetary Policy Committee (MPC) had voted unanimously to leave its benchmark bank rate at 0.1 percent whilst also maintaining the target for the total stock of asset purchases under its quantitative-easing (QE) programme at £745 billion.
Technology is bringing an assortment of benefits to consumers and their banks but also a slew of new or heightened risks. In the UK, regulatory authorities are addressing the looming threats by rolling out proposals related to Operational Resilience (OpRes). UK financial firms will be expected to adhere to new rules during the second half of 2021 and need to start preparing as the journey to compliance will be arduous.
Digital currencies are proliferating around the globe, with even the bigtech players such as Facebook jumping in. What about central banks issuing their own central bank digital currencies? Many central banks are weighing the advantages and disadvantages of CBDCs so as to minimize disruption. More recently, six central banks announced that they will work jointly on this issue with support from the BIS, which shows the increasing focus on cross-border implications.