Are small businesses being locked out of commercial lending?

Small business in the spotlight as de-regulation hits the headlinesSmall businesses are an important part of the US economy, creating wealth and employment opportunities as well as supporting economic growth at grass-roots level. So are small business owners being unfairly hindered by the slew of regulations introduced following the financial crisis of 2008? It’s an issue that’s in the headlines at the moment as ‎President Trump embarks on a full-scale review of the Dodd-Frank Act (2010) which tightened lending restrictions on banks. But are startups finding it impossible to get a foothold, or is growth stalling for existing businesses because of the lack of availability of business funding? Read more…

Trump takes aim at Dodd-Frank

President Trump plans to repeal Dodd-Frank regulationsWhile Donald Trump and Johnny Depp may not appear to have much in common, they are both weighing in at different ends of the spectrum on whether or not the financial services industry requires more or less regulation. Depp is in dispute with his former managers whom he accuses of mismanaging his finances. He has filed 11 complaints and is seeking damages of more than $25 million. Trump, meanwhile, has reaffirmed this pre-election promises to loosen regulations by reversing post-financial-crisis reforms designed to discourage excessive risk-taking – including the dismantling of the Dodd-Frank law of 2010. Read more…

Central banks explore digital currency

Central banks ponder the introduction of digital currencyThe successful transition of crypto-currency bitcoin from experimental concept to globally accepted currency with a market value of more than $10 billion, is causing central banks to start exploring the potential of digital currencies for themselves. Research is at an early stage, but central banks – including those in Russia, Canada, the UK, Australia and China are assessing the risks and benefits of adopting a digital currency of their own. Further analysis needs to be done into how digital could affect a country’s economy and financial stability, and how systems could be put in place to defeat hackers, at the same time serving the needs of tens of millions of people. Read more…

Brexit and Trump elevate risks to banking sector

Global events including Brexit and Trump win exert pressure on banking sectorRecent political and economic events including Brexit, the US presidential election and China’s economic slowdown have created global uncertainty are creating significant risks for the global banking sector, according to leading ratings agency Standard & Poor. The agency’s global credit outlook for the banking sector in 2017 flags these and other factors as potential hurdles for the banking industry’s creditworthiness over the next twelve months, saying that more than half of the largest global banking systems face negative pressure – especially banks in Latin America and Asia Pacific. Read more…

Wells Fargo in meltdown over unethical conduct

Wells Fargo CEO John G. Stumpf under the spotlight as bank castigated for unethical conductWells Fargo CEO John G. Stumpf grilled over unethical conduct

Last year, the city of Los Angeles sued Wells Fargo for unethical customer conduct, amid allegations that the bank had secretly opened unauthorised accounts on behalf of thousands of customers. The bank has since reached settlements totalling almost $200 million. At a September hearing before the House Financial Services Committee, Wells Fargo CEO John G. Stumpf was grilled over the bank’s transgressions and although he announced a pay forfeit of $41 million in pay and made a promise to drop the bank’s incentive programme, few of his interrogators were impressed. Read more…

US economy feeling the pinch as lines of credit are squeezed

Businesses treading water as banks tighten standards relating to applications for creditBusinesses treading water as banks tighten standards over applications for credit

A survey recently conducted by the Federal Reserve reveals indications that lines of credit are harder to come by, with loans to businesses on commercial and industrial (C&I) and commercial real estate (CRE) facing tougher criteria over the second quarter of 2016 than in the past three quarters. Companies in search of C&I loans for new inventory or relocation are facing tougher credit standards as banks continue to tighten lending, particularly in the case of medium- and large-sized companies. Read more…

Federal Open Market Committee holds interest rates steady

US interest rates remain on hold as the Fed looks for more certainty before signalling a hikeUS interest rates on hold as the Fed looks for certainty

The Federal Open Market Committee (FOMC) made the decision to hold US interest rates steady in July. Market analysts had predicted the hold as the continued threat of economic uncertainty coupled with the upcoming presidential election prevented the Federal Reserve from the announcing a rate hike in the short term. It’s the fifth time the Fed has stuck to its guns since nudging the rate up last December for the first time in nearly a decade. Many believe that it could be the end of the year before a further change is contemplated. Read more…

Will London lose its ranking as the world’s financial capital post-Brexit?

London is the financial capital of the UK but will it maintain its appeal after Brexit?The race is on to be the new London

June’s surprising referendum result has put the UK on track to leave the European Union, at the same time sparking speculation that its capital city will experience a mass exodus as overseas-owned banks seek to secure their trading position within Europe. Some organisations already have a foothold in mainland Europe and may be prepared to adopt a ‘wait and see’ approach before jumping ship. But if London does lose its passporting arrangements, which European cities are in line to seize its banking crown? Read more…