“STABILITY AND CONSISTENCY”: PRA SETS OUT PROPOSALS FOR POST-BREXIT APPROACH TO INTERNATIONAL BANKS

The PRA has published a consultation paper (CP2/21) setting out proposals for its updated approach to supervising the UK activities of banks and PRA authorised investment firms that are headquartered outside of the UK or part of a non-UK group. The consultation paper includes a draft supervisory statement to supersede the existing PRA Supervisory Statement 1/18 (the PRA’s current supervisory statement on its approach to supervising international banks).

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2020 Global Bank Review: #disruption

We are excited to launch the 2020 edition of our Global Bank Review#disruption.

While the banks sector has faced significant challenges before, the depth and breadth of Covid-19’s disruption has left banks in the position of having to brace for impact to their own businesses, whilst simultaneously demonstrating a change in culture, providing support to vulnerable customers, and supplying vital credit for regrowing our economies. Continue reading

Lending Standards Board launches consultation on Contingent Reimbursement Model

On 15 July 2020, shortly after the first anniversary of its assumption of governorship of the Contingent Reimbursement Model (“CRM”) Code, the Lending Standards Board (LSB) launched a consultation which will form the basis of its post-implementation review of the CRM Code. The LSB’s review also extends to its Practitioners Guide (which is made available only to signatories of the CRM Code) and its Information for Customers document. Continue reading

FCA asks banks to explain new overdraft rates

The FCA has today written to the UK’s major retail banks, asking them to provide evidence of how they have arrived at their new overdraft interest rates, which have all been set at around 40%. The FCA also asked the banks to clarify how they will deal with customers who could be worse off following the changes, and expects firms to take “positive steps” to helps these customers – for example, by reducing or waiving interest, or offering a continuation of overdraft borrowing at current rate of interest.

The FCA’s letter comes after it introduced wide-spread reforms to the “dysfunctional” overdraft market to end harmful unarranged overdraft charges. From April this year, firms are required to charge a simple annual interest rate, without additional charges for using an overdraft.

Today’s letter is perhaps an acknowledgement from the FCA that its overdraft changes have not been implemented quite as expected, and a warning to banks that the FCA will be “keeping a close eye on the market” and will take action should it “see continued harm”. The banks have until 10 February to voluntarily respond to the FCA’s letter, following which we should expect more communications and possibly further action from the FCA.

Clive Cunningham
Clive Cunningham
Partner
+44 20 7466 2278
Mark Staley
Mark Staley
Senior Associate
+44 20 7466 7621
Katie McGrory
Katie McGrory
Associate
+44 20 7466 2669

Hong Kong Court of Appeal finds against bank on the basis that the bank’s exclusion of liability clauses were unconscionable and unreasonable

The Hong Kong Court of Appeal (CA) has recently affirmed a decision of the Court of First Instance (CFI), in which a ruling was made in favour of the plaintiff investors in a mis-selling claim against a bank, albeit on different grounds to that of the CFI (click here for the full judgment and here for our e-bulletin on the CFI decision). Overturning the CFI’s ruling on contractual interpretation, the CA held that the exclusion clauses in the bank’s services agreement did apply to the plaintiffs’ non-discretionary accounts. The CA however went on to find that the exclusion clauses the bank sought to rely on to limit its liability were unconscionable under the Unconscionable Contracts Ordinance and did not satisfy the requirement of reasonableness under the Control of Exemption Clauses Ordinance. This is the first decision of its kind where the court considered unconscionability in a banking context. Our recent e-bulletin examines the decision in more detail. If you wish to discuss this further, please do not hesitate to contact our Hong Kong team as listed on the e-bulletin, or your usual Herbert Smith Freehills contact.

Corporate Crime Monthly Update – August 2017

Welcome to the August 2017 edition of our corporate crime update – our round up of developments in relation to corruption, money laundering, fraud, sanctions and related matters. Our update now covers a number of jurisdictions. For the full update on each jurisdiction, please click on the name of the jurisdiction below. Below we provide a brief overview of what is covered in each update.

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Addressing the implications of non-EEA national depositor preference regimes in the UK

In certain non-EEA countries, if a firm becomes insolvent, the claims of depositors in the home country will be preferred above the claims of depositors outside the home country, including the depositors of the UK branch.   The UK’s FSA is now consulting on proposals which will very significantly impact deposit-taking firms from non-EEA countries that operate national depositor preference regimes.   Continue reading