Years On, Different Scandal, Same Problems

The numbers are once again staggering, the arrogance breathtaking. Yes, it’s another week, another banking scandal. Channel 4 News’ economics editor, Paul Mason, expressed what many felt when he went into something of a rage while reporting on the latest banking scandal from outside the offices of RBS. Mason later explained that the clip that was aired was filmed after he had had time to calm down, so exasperated was he that so little had changed in the last […]

Bankers’ bonuses – 100 times higher than public sector

Bankers’ bonuses were more than a hundred times higher than public sector workers over the past year and grew at double the rate of those of the average UK worker, official figures have showed.
The average bonus for bankers and insurance workers was £13,300 between May last year to April, while that of public sector workers such as nurses and teachers was the lowest at around £100 on average.  The figures are likely to prompt further calls for stricter rules […]

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George Osborne to reveal shake-up of SME loans

By Sam Fleming
Banks that reject loan applications from small and medium-sized companies will be forced to refer them online to other sources of funding.  George Osborne, the chancellor, will on Wednesday confirm plans to legislate to improve SME access to finance as part of a series of measures that aim to encourage choice and competition in financial services.

The move comes as Britain struggles to boost competition in the banking sector: the four biggest banks control 85 per cent business […]

Gates remain open for scandals

THE UK faces the risk of further banking scandals, unless action is taken to increase competition in the lending market for small and medium-sized businesses, according to a Government adviser.
Lawrence Tomlinson, the Yorkshire entrepreneur and Government adviser who compiled a dossier of complaints against RBS’s turnaround division, made the comments in response to reports that the Government is going to urge the big banks to increase the supply of SME (small-and-medium-sized business) loans.
The report in the Sunday Telegraph said […]

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Sir Richard Lambert launches UK banking standards council

By Sharlene Goff, FT Retail Banking Correspondent
A new organisation charged with raising standards in the banking industry will rely on public naming and shaming of lenders that fall short as it attempts to clean up the sector after a series of misconduct scandals.
The UK’s seven largest lenders have agreed to report each year to the new Banking Standards Review Council.  The body will set standards for “culture, competence and customer outcomes” and publish an annual report detailing where banks […]

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65% of SME’s rejected for a loan want to try alternatives

A government consultation ended last week into whether legislation should force banks to refer rejected loans to alternative sources of finance.
At present the largest four banks account for over 80% of UK SMEs’ main banking relationships. Many SMEs only approach the largest banks when seeking finance. Although a large number of these applications are rejected – in the case of first time SME borrowers the rejection rate is around 50% – a proportion of these are viable and are rejected simply because they don’t meet […]

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Vince Cable – Bankers’ Pay Still Extraordinarily Large

Vince Cable has issued a stark warning to Britain’s leading boardrooms that they need to crack down on bonuses to restore public trust and avert the threat of fresh legislation to limit executive pay.

The business secretary fired off a warning to the 100 biggest UK-listed companies about the damage big pay deals can have on their image, before Barclays’ annual meeting on Thursday, where protests about the bank’s £2.4bn bonus pot are expected to be registered by disgruntled shareholders.

Cable told […]

New crowdfunding rules: implications for small businesses

SMEs are increasingly looking at crowdfunding as a way of raising finance without dealing with bureaucratic banks and fickle investors. However, new rules by the Financial Conduct Authority (FCA), which came into force recently, regulate certain types of crowdfunding.
Crowdfunding involves raising finance by taking small investments, loans or donations from a large number of people. Depending on who you believe, the new FCA rules have either “taken the crowd out of crowdfunding” or “represent the right balance between the freedom […]

Vince Cable hires ‘resident entrepreneurs’

Two “entrepreneurs in residence” have taken up roles as government advisers and identified small companies’ struggle to access bank finance as their top priority.

Lawrence Tomlinson and Rekha Mehr will work one day a week at the Business Department, with Vince Cable describing the appointments as “important voices for business”.

The Business Secretary said they would help the Government “address the needs of small and medium-sized businesses”. Mr Tomlinson runs the Leeds-based LNT Group, which has a £100m turnover with interests […]

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Co-op Bank Confirms losses of £1.3bn

The Co-op Bank has confirmed it made a loss of £1.3bn last year and will remain loss-making for the next two years as the troubled lender published its twice delayed annual results.

The lender said it had begun talks on a £400m fund raising and warned that without the new money it would be in breach of its minimum capital requirement.

Niall Booker, chief executive of the Co-op Bank, apologised for the situation and said the lender would be clawing back […]

FCA Appointed Independent Reviewer Leads Inquiry into FCA

1st April 2014 – Fools Day
The Treasury Committee agreed to hold an evidence session with the independent reviewer who will be appointed by the Financial Conduct Authority to lead its inquiry into the Financial Conduct Authority’s treatment of market sensitive information, they have yet to announce his/her identity.
The Chancellor of the Exchequer has also written to the FCA expressing profound concern and outlining some areas that he thinks the review should address.

Chair’s comments
Andrew Tyrie MP, the Chairman of the Treasury Committee, […]

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    Alternative Funding Grows as 35pc of SME Bank Loan Applications Fail

Alternative Funding Grows as 35pc of SME Bank Loan Applications Fail

Amid a soaring failure rate for bank loan applications, small firms are looking to alternative finance providers for growth capital. Entrepreneurs share their experiences.
The local bank was once the first port of call for a growing business seeking finance. Today, however, , according to the latest SME Finance Monitor from BDRC Continental. And recent Bank of England lending figures showed a drop of £300m in small business lending in January this year.

Against this backdrop, a raft of alternative funding […]

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Treasury Committee publishes terms of reference for SME lending inquiry

The Committee invites written submissions on the following issues by 28 March 2014
Access to SME finance

Are Small and Medium sized Enterprises (SMEs) able to access credit?
If not, what are the reasons SMEs do not obtain credit, including for example:
how the pricing or terms of credit restrict credit availability
whether firms have been discouraged from seeking credit by a perception that banks are unwilling to lend.

Why hasn’t the market filled the gap?

Whether competition amongst banks in the UK retail market has […]

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    Regulator’s first job – Full-scale Bank Inquiry into fall in SME Funding

Regulator’s first job – Full-scale Bank Inquiry into fall in SME Funding

The £170bn small business lending market is to be the first major investigation of the new competition regulator, the Competition and Markets Authority.

The Office of Fair Trading began a study of the sector last year which is understood to have concluded that a full-scale inquiry is required by the CMA, which is taking over as from the Competition Commision and the OFT next month. The announcement could come as soon as today or early next week.

It comes against a […]

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