19 Nov 2015 07:30am

economia a.m.

An early morning round-up of the day's news

Fed minutes point to December rise

The US Federal Reserve policymarkers have said that the conditions for a rate rise may “well be met” by December. The minutes from its October meeting showed that most members thought it might be appropriate to lift rates next month, with Fed officials citing an improvement in the employment market and inflation moving towards their 2% annual target. Many economists thought rates might rise earlier this year, but US market volatility and worries about China’s economic growth ruled any rise out. It would be the first upward move from the central bank since 2006. The decision will be made at the next two-day meeting, on December 15 and 16. (Source: The Times, The BBC, The Financial Times, The Guardian)

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Bankers tackled over lack of diversity

The first diversity report from the British Bankers’ Association (BBA) has called for banks in the UK to face “internal consequences” if they fail to address a lack of diversity at their institutions. According to the Financial Times, the BBA says – although there has been some progress - banks are failing to end the industry’s “pinstripes and braces” reputation. The BBA report comes two weeks after proposals made by Jayne-Anne Gadhia, chief executive of Virgin Money, to cut remuneration at banks which fail to tackle the gender imbalance. She also proposed all banks should have an executive officer in charge of diversity. (Source: The Financial Times)

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Former HBOS leaders face scrutiny

The former leadership of HBOS will come under new scrutiny, after it was reported that regulators will agree to consider reopening an investigation into the individuals involved in the bailout of the bank. A much-delayed report into the failure of HBOS will conclude today that the Prudential Regulation Authority and the Financial Conduct Authority should put fresh scrutiny on the bank’s former bosses and regulators in the runup to the bank’s near-collapse. Former regulatory body the Financial Services Authority took action against only one former HBOS executive, Peter Cummings, banning and fining him in 2012. According to Sky News, accounting watchdog the National Audit Office will also announce there is no case for investigating misconduct by HBOS’s auditors KPMG. (Source: Sky News, BBC, Financial Times, The Times, The Telegraph)

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FCA to scrutinise asset managers

Regulator the Financial Conduct Authority will probe the UK’s £6.6tn asset management industry in a sweeping antitrust review over the fees it charges. The FCA will investigate how costs are controlled, whether clients are getting value for money and the particular role of investment consultants on competition among institutional asset managers. The regulator will approach market participants in gathering information, with preliminary findings to be published in the summer of 2016. (Source: Bloomberg, The Telegraph the Financial Times, Reuters)

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RBS scraps bonuses for branch staff

The Royal Bank of Scotland is ending cash bonuses and incentives for all customer-facing staff, in a bid to rebuild the bank’s reputation after years of mis-selling scandals. All 20,000 of its branch staff, including mortgage advisers and branch managers, will instead have their salaries increased, by an average of about 5%. According to the Financial Times, this makes RBS the first of the large banks to remove variable compensation. In 2012, the bank had already stopped rewarding customer-facing staff with cash for products sales, switching instead to paying cash incentives for meeting targets on customer satisfaction. (Source: Financial Times)

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Pay increases for first time since 2008

Official figures show Britain’s six-year pay squeeze has officially ended, with average earnings for full-time staff growing by 1.9% in real terms in the year to April 2015, the first increase since 2008. However, figures from the Office for National Statistics showed that households are still £42 worse off than they were in 2008, after adjusting for inflation. The ONS’s annual earnings survey showed that the lowest-paid workers were more insulated from the downturn than those higher up the pay ladder. It also said that workers in London had endured the deepest squeeze in pay. (Source: The Times, The Guardian, The Independent)

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Barclay’s hit again for market-rigging

Another in a long series of fines at Barclays bank means the total paid out for manipulating currency markets by the bank has now topped $2.5bn. The latest penalty, a $150m fine from New York’s financial regulator, said Barclays had used computerised trading software to reject foreign exchange orders from its customers that would lose the bank money. The technique is known as “last look”. In a statement, Barclays said it would dismiss the manager responsible for its global electronic trading systems, and that the fine would be taken into account in the bank’s results for the final three months of the year. It also warned that it was facing further investigations. (Read more: The Times, The Guardian, Reuters, Financial Times, Bloomberg)

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Rose asks business to speak out for EU

Former head of Marks & Spencer Stuart Rose has written to 3,000 directors of UK companies, encouraging them to speak out about the role of Europe in the UK’s business community. The Financial Times reports that the Tory peer, who is also head of the ‘In’ campaign, urged the FTSE 350 directors to be a “vital voice” in the debate ahead of the referendum on EU membership. His move comes amid suggestions that many executives may want to keep their views on the referendum private, to avoid being drawn into a political debate. Rose argued that a “nasty” campaign by eurosceptics – who crashed the CBI annual conference with protesters - revealed the weakness of their own case. (Source: Financial Times)

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Helen Roxburgh