Why Now?
The first question to ask when something changes is always, why now?
UK to regulate ‘buy now, pay later’ lenders in legal overhaul
Buy now, pay later is the developmentally disabled, red-headed child of your crazy mistress of the Fintech world.
There’s a reason why it went away before, not that anyone remembers.
Its days of “regulatory arbitrage” (the preferred vector for many Fintech companies) may be coming to an end, at least in the UK.
Why the hell did it take them so long?
‘Lenders that specialise in “buy now, pay later” services will have to abide by similar rules to mainstream banks under long-awaited legislation that will result in them being fully regulated by the Financial Conduct Authority.’
China plans regulation to aid tech firms listing overseas, official says
Why now?
‘China will provide a more efficient, transparent and predictable regulatory environment to support technology firms listing overseas, Chief Risk Officer at the China Securities Regulatory Commission (CSRC) Yan Bojin said at a news briefing on Thursday.’
‘Green’ Tariffs and the Persistence of ESG
DEI. ESG. These things will not go gently into the good night.
There’s too much money at stake.
‘However, contrary to the impression given by the headlines, ESG is still in the game, albeit more camouflaged than in the past, quite often, as predicted some years back by Aswath Damodaran, a professor of finance at NYU’s Stern School of Business (and no fan of ESG), as “sustainability”:
‘So, what will the next big thing be? I don’t know for sure, but I am willing to make a guess, since so many ESG experts and advocates have slipped into already using it as an alternative. It is “sustainability“, a word that can mean whatever you want it to mean.’
Commissioner Hansen presents plan to cut farming bureaucracy in EU
Why is the EU moving to reduce bureaucracy now?
Three guesses and the first two don’t count.
‘The measures are designed to reduce what the Commission sees as unnecessary administrative burdens in implementing the Common Agricultural Policy (CAP), the EU’s farming subsidy framework.
‘Hansen believes the proposed strategy should serve all stakeholders. The plan, therefore, aims to reduce the administrative burden for farmers and member states.’
Treasury jitters and banking regulation
Regulation leads to “distortions and potential liquidity issues for the Treasury market.”
Doesn’t sound like a luxury we can afford any longer, does it?
‘There are many proposals on the table, but the one that appears to be getting the most traction so far is to exempt Treasury holdings from the supplementary leverage ratio (SLR). Banks are required to meet a number of capital requirements to ensure that they have sufficient liquidity and capital to support safe lending. The SLR is the broadest capital requirement possible: it divides all of a bank’s tier one capital (common stock, retained earnings and so on) over its total leverage exposure (total assets plus certain off balance sheet exposures). The broadness of the measure is the point. It’s very hard to fiddle with. And, as opposed to the more complex risk-weighted ratios that did not properly gauge banking risks before the 2008 financial crisis, the simplicity of the SLR makes banks easier to regulate.
‘The broadness of the measure, however, can lead to distortions and potential liquidity issues for the Treasury market. The banks themselves have argued that requiring banks to hold cash against risk-free assets such as Treasuries is counter-productive. It disincentives them from holding US debt, they say, and makes it more costly for their trading desks to be active in the Treasury market.’
UK-EU deal will ‘slash red tape and bureaucracy
Will it, though?
‘The final agreement will include a reduction in cross-border red tape for agricultural exports and imports with a new agreement on agri exports, potential access to the EU electricity market, and an exemption on net zero payments to reduce bills for business.’
„Bureaucracy also burdens large companies“
Bureaucracy benefits large companies over their smaller rivals because the big have the resources to deal with the administrative overhead.
Germany wants to exempt SMEs from some bureaucracy.
Big companies are not happy.
‘In the view of Deutsches Aktieninstitut (DAI), the exemptions from reporting obligations for SMEs proposed by the EU Commission are not enough to fulfil the announcement of a far-reaching reduction in bureaucracy.
‘„Excessive bureaucracy also affects and burdens large companies,“ says Henriette Peucker, Chief Executive of the DAI, in an interview with Börsen-Zeitung. This is not an issue that only poses problems for small and medium-sized companies. „It is therefore not sufficient to only exempt some SMEs from certain obligations in order to strengthen competitiveness. Europe's competitiveness also depends on large companies not being burdened with unnecessary bureaucracy, which entails immense costs.“’
Why Trump Lashed Out at Europe Over Trade
The tariffs are a mechanism to force discussions over a comprehensive set of points of conflict with partners and strategic competitors both; the tariffs have little to do with trade.
Discuss.
‘Trump’s advisers have privately expressed irritation to European officials that EU member nations’ differing trade priorities have slowed down the talks, according to people familiar with the discussions. The advisers have complained about what they see as Europe’s cautious approach to the negotiations and what they refer to as the EU’s reluctance to make concrete offers that address U.S. concerns. They include fees on streaming services, value-added taxes, automotive regulations, and fines imposed against U.S. companies in antitrust cases, the people said.’