Spain pilots shorter working week for SMEs…

Spain’s government has launched a pilot scheme under which small and medium sized enterprises (SMEs) can test the impact of a shorter working week, without salary loss, on productivity.

The scheme will be tested over two years across companies seeking labour reforms that can “generate a rise in productivity, which compensates salary costs” whereby wages are maintained, the labour ministry said.

Companies interested in joining the pilot must commit to cutting weekly hours by at least 10% over two years for at least 25% of their workforce.

In return, they will receive state assistance designed to compensate for the impact on production as well as additional administrative costs, which may arise from putting the scheme into operation, the ministry said.

After assessing the effect on productivity, the ministry said the government would then determine whether to roll it out to the rest of the economy".

In recent years several large Spanish companies, including telecoms firm Telefonica and fashion group Desigual, have tested and in some cases adopted a four-day working week.

However, few of these pilots have been in industry and have also mostly been accompanied by a corresponding drop in wages. The issue has proven contentious, with unions largely in favour, but bosses opposing a measure they see as difficult to apply across numerous sectors of the economy.

In the UK a group of 100 companies have piloted a four-day working week since June and have now signed up to making it permanent for all employees with no loss of pay. Collectively the 100 companies employ only 2,600 people but the success of the scheme may now see it trialled by other companies.

A four-day working week trial has proved a success among Irish and US companies. 

The trial, conducted by independent researchers at Boston College, University College Dublin, and Cambridge University on behalf of the 4 Day Week Foundation, found that both employers and employees were keen to continue with a four-day working week. 

Of the 27 companies that completed the final survey, 18 have committed to continuing with a four-day working week, while seven other companies plan to continue but have yet to make a final decision.

… and Italy's Intesa to offer staff four-day working week in 2023

Italy's biggest bank Intesa Sanpaolo has agreed to offer its local workforce the option of a four-day working week on the same salary from January, the first such move by a major Italian employer.

Intesa, which employs 74,000 people in Italy, had already said in October that it was looking at shorten the working week to curb its electricity bills at a time when European businesses are challenged by sharply increased energy costs.

Intesa said that it will also extend work-from-home arrangements effective from January.

The changes will be voluntary and will be made available provided that they are compatible with the bank’s “technical, organisational and productive needs,” a company statement said.

Staff opting for the shorter week will have to work for nine hours per day over four days, Intesa said. Employees will also be able to work from home for up to 120 days per year with no monthly limits, it added.

In a separate statement, trade unions said the bank would introduce the new arrangements “unilaterally” after refusing a series of demands, including compensation for extra energy and internet costs for staff working from home.

HSBC ceases new oil and gas project funding

HSBC said that it will no longer fund new oil and gas fields as part of a wider appraisal of the group’s sector-based corporate lending policy.

The move is seen as a signal to the fossil fuel industry that Europe’s largest bank will no longer provide investment in these projects. HSBC has to date been one of the largest lenders to energy companies globally and plans to continue providing finance at a corporate level to support their transition to less carbon intensive power sources.

Activist groups that have criticised HSBC in recent years applauded the policy shift, keenly awaiting the update that will drive companies towards a cleaner future. The bank attracted opprobrium for continuing to invest in oil and gas in 2021, despite having made a net zero pledge the year prior.

The decision was also made by the bank, after “scientific and international bodies” confirmed that the existing oil and gas projects would be more than enough for supply in a net zero scenario in 2050.

“We have the biggest transformation in the global economy happening ever, energy is the backbone of the global economy over the next three decades, and we have to do that [transition] in a responsible way where we have a better match between supply and demand,” said HSBC’s Chief Sustainability Officer, Celine Herweijer.

Despite ending investment in new projects, the bank will maintain its current money in older facilities, stating it “recognises that fossil fuels, especially natural gas, have a role to play in the transition, even though that role will continue to diminish.”

Jeanne Martin, Leader of ShareAction – a charity campaigning for fossil fuel investment to end – said: “HSBC’s announcement sends a strong signal to fossil fuel giants and governments that banks’ appetite for financing new oil and gas fields is diminishing.”

Hong Kong launches two cryptocurrency future ETFs

Hong Kong has successfully launched its first two exchange traded funds (ETFs) for cryptocurrency futures, furthering a pledge made in October to develop the city into a regional digital asset hub rivalling Singapore.

As the financial gateway to China, Hong Kong offers a convenient backdoor for mainland money in China to access Bitcoin and its peers.

CSOP Asset Management’s Bitcoin Futures and  Ether Futures ETFs, listed on Friday 16 December, achieved US$59 million and US$20 million of initial investment respectively, according to a statement from the group.

Despite the recent collapse of cryptocurrency exchange FTX, Hong Kong investors were attracted to both offerings and edged higher on their debut. The ETFs allow them access to cryptocurrency futures traded on the Chicago Mercantile Exchange (CME).

However Carlton Lai, head of blockchain and cryptocurrency research at Daiwa Capital Markets in Hong Kong, said the initial US$79 million raised was lesss than expected. “It really shows the bear market and current lack of confidence in the asset class,” he added.

Moreover, FTX’s collapse could still hamper Hong Kong’s plan to become a crypto hub. Several notable Asian crypto groups have already run into trouble following the FTX implosion, with Hong Kong exchange AAX halting withdrawals and Singaporean lender Amber pausing expansion plans.

Hong Kong-based cash-for-crypto shop Genesis Block, which was part-owned by FTX offshoot Alameda Ventures, last month shut down its trading portal and stopped accepting deposits.

Hong Kong’s push to launch crypto ETFs and make it easier for retail investors to trade digital assets comes after years of stricter regulations than in the rival financial centre of Singapore, although the latter recently promised tough action to curb bad behaviour in the industry.

Julia Leung, who was appointed this month to lead Hong Kong’s Securities and Futures Commission (HK SFC), has highlighted the Chinese territory’s “pioneering” regulatory approach towards crypto trading. A former journalist and currently the market watchdog’s deputy chief executive, she will take over in January as the regulator’s first female head.

“When other main regions are now singing the same tune and establishing a more holistic regulatory regime, we see conditions for more relaxation since we already have [regulations] in place,” Leung told a conference last month.

An update to the city’s recently enacted anti-money laundering (AML) law, which is scheduled to come into effect next year, will require virtual-asset service providers to comply with guidelines.

Kazakhstan plans to commence phased CBDC rollout in 2023

Kazakhstan’s central bank recommended making the in-house central bank digital currency (CBDC) available as early as next year, with a phased expansion of functionality and introduction into commercial operation until the end of 2025.

Kazakhstan, as the world's third-largets Bitcoin mining hub after the US and China, believes it is feasible to launch its in-house CBDC, a digital tenge (KZT). The National Bank of Kazakhstan (NBK) revealed the finding following the completion of the second phase of testing. 

In late October, Binance's chief executive Changpeng "CZ" Zhao announced that Kazakhstan’s CBDC would be integrated with BNB Chain, a blockchain built by the crypto exchange. The country's primary motivation for conducting studies on CBDC was to test its potential to improve financial inclusion, promote competition and innovation in the payments industry and increase the nation’s global competitiveness.

The pilot research, focused on offline payments and programmability, recommended the inclusion of market participants and infrastructure players for different scenarios and proposed clarifying language to be used by the country’s regulators. The latest research paper cemented Kazakhstan’s intent to roll out the e-KZT. A rough translation of the report reads:

“Taking into account the need for technological improvements, infrastructure preparation, development of an operating model and a regulatory framework, it is recommended to ensure a phased implementation over three years.”

With many Russians having crossed the border into neighbouring states following the invasion of Ukraine last February, Kazakhstan announced plans to legalise a mechanism for converting cryptocurrencies to cash.

“We are ready to go further. If this financial instrument shows its further relevance and security, it will certainly receive full legal recognition,” said President Kassym-Jomart Tokayev while speaking at the international forum Digital Bridge 2022. Kazakhstan’s neighbour, Georgia, has also been developing new crypto regulations with the aim of becoming a global crypto hub. 

US Small Business Administration agrees alliance with BAFT

Administrator Isabella Casillas Guzman, who heads the US Small Business Administration (SBA) and represents America’s 33 million small businesses in President Biden’s Cabinet, announced the signing of the Strategic Alliance Memorandum (SAM) with the Bankers Association for Finance and Trade (BAFT).

BAFT is a global financial services association for international transaction banking and the SAM formalises SBA’s existing relationship with the association. BAFT and SBA “strive to tackle challenges both lenders and small businesses face when seeking the trade financing that is essential to international trade. Together, the SBA and BAFT will work to educate small businesses and their lenders on the export financing solutions available in the marketplace,” their joint statement pledged.

“SBA’s new agreement with BAFT recognises the impact and ingenuity of our small business exporters and the important role our lending partners play in funding their growth,” said Guzman. “Our joint efforts to strengthen resources to BAFT members and increase the number of lenders offering SBA international trade products, will expand access to capital and help deliver on the Biden-Harris Administration’s commitment to create opportunities for small businesses and strengthen our economy for all of us.”

BAFT also recently issued a new whitepaper, Perspectives on Evaluating Potentially Unusual Vessel Behaviour.

The Association said that while banks offering trade finance products will probably have a working knowledge of shipping documentation, staff may be less familiar with the details surrounding the maritime shipping industry. This can pose challenges when shipments or transactions are flagged as unusual and compliance issues arise.

The paper aims to provide bankers with a foundational understanding of maritime shipping and the associated compliance risk with this space.

Scott Stevenson, senior vice president of trade for BAFT said: “Our goal is to increase awareness of the risks associated with ocean-going vessels and their potential nexus to financial crimes.

“We hope financial institutions will use the guidance to examine the inherent risk in their trade techniques.”

The paper was produced by BAFT’s Trade Compliance Working Group, a subset to the BAFT Trade Compliance Committee, whose membership includes a wide range of banks, law firms and fintech providers.

Stevenson said, “This publication was produced as part of BAFT’s ongoing commitment to thought leadership, best practices and education. It is through such efforts by our committees that the transaction banking industry benefits as a whole.”

Credit Suisse’s business model endorsed by Switzerland’s central bank

Swiss National Bank (SNB) President Thomas Jordan has voiced support for Credit Suisse Group’s decision to reduce its involvement in investment banking, as the lender struggles to recover from billions in losses over the past two years, recent client defections and asset outflows with a strategy revamp.

“We appreciate that Credit Suisse is focusing on its strengths,” Jordan told Swiss radio SRF at the weekend. “That means wealth and asset management and being a universal bank for Switzerland, while doing less investment banking than in the past. This should lead to risks in Credit Suisse’s business diminishing, which is good from a financial stability point of view.”

The central bank rarely comments on individual commercial banks but has departed from policy with regard to Credit Suisse, following its recent raising of US$4.3 billion capital and an overhaul of its business after a series of scandals and management missteps.

The new strategy includes plans to spin off its capital markets, advisory and leveraged finance businesses into a boutique unit under the CS First Boston branding, while integrating its remaining trading businesses more closely with the wealth management business.

Jordan also addressed the SNB’s monetary policy and defended the central bank’s conservative definition of price stability as having an inflation rate between zero and 2%, while other major central banks like the European Central Bank (ECB) define it as a rate of around 2%.

The recent price surge “shows nicely that the problem of too low inflation is rather small while the problem of too high inflation is rather large,” Jordan said, adding that before rising energy prices fuelled the current price growth many economists criticized the SNB for having a too low inflation target.

Swiss inflation has been hovering around zero and frequently even lower in recent years.

The SNB raised its key interest rate by 50 basis points (bps) to 1% this month and added that another hike might come in March, although Switzerland’s inflation rate of 3% is the lowest of any developed economy.

Nigeria to pass bill legitimising Bitcoin and cryptocurrencies

Recent reports suggest that Nigeria’s government will soon pass a law that recognises the usage of Bitcoin and other cryptocurrencies as a means to keep up to date with “global practices.”

The reports appeared in local media at the weekend following an interview with House of Representatives Committee on Capital Markets Chairman Babangida Ibrahim.

The report stated that if the Investments and Securities Act 2007 (Amendment) Bill is signed into law it would allow the local Securities and Exchange Commission (SEC) to “recognise cryptocurrency and other digital funds as capital for investment.”

Ibrahim stressed the need for Nigeria to keep up to date with trends and developments in capital markets: “We need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date [with] global practices,” he added.

The change of policy comes after Nigeria banned crypto activityt in February 2021, with the Central Bank of Nigeria (CBN) ordering Nigerian crypto exchanges and service providers to cease activity and mandating banks to shutter the accounts of any individuals or entities found to be engaging in trading activities.

But Ibrahim — who served as Nigeria’s president between 1985 and 1993 — maintained that the passing of the law isn’t a 180-degree turn on the ban but rather a secondary review of what is within the scope of the CBN’s powers:

“It is not about [the] lifting of the ban, we are looking at the legality: what is legal and what is within the framework of our operations in Nigeria.”

“When cryptocurrency was initially banned in Nigeria, the CBN discovered that most of these investors don’t even use local accounts. So, they are not within the jurisdiction of the CBN. Because they are not using local accounts, there is no way the CBN can check them,” he explained.

The law also comes as Nigerians mostly ignore the country’s central bank digital currency (CBDC), the eNaira, which had only obtained a 0.5% adoption rate in October, 12 months after its launch.

The Nigerian government’s efforts to crack down on crypto activity earlier on were arguably ineffective too, as adoption continued to increase following the ban in February 2021.

From January to August last year, Nigerians only trailed the US in Bitcoin trading volume, and over the same period, Nigerians were more likelt to Google search "Bitcoin" than citizens of any other country.

Nigeria also recently entered into early-stage discussions with cryptocurrency exchange Binance in September to develop a crypto-friendly economic zone that will aim to support crypto and blockchain-related businesses in the region.

Mastercard expands UK open banking facilities

Mastercard's  recent announcements with Currensea and Secure Trust Bank form a promising next step up on the ladder for UK open banking, according to The Fintech Times.

The payments company is a regular feature in various initiatives aimed at progressing what is being described as "the future of finance". “

Mastercard’s open banking technology provider Aiia, a Denmark-based company which it acquired in November 2021, now processes over one million monthly open banking payments with the Finnish payments company Paytrail, while Mastercard also more recently launched the automated clearing house payment initiative ‘Pay-by-Bank’ with J P Morgan Payments. ”.

The debit-as-a-service platform Currensea is joining Mastercard’s start-up engagement open banking programme Start Path. The UK open banking debit card platform allows the issuance of branded debit cards without needing a current account.

Introduced in June, Start Path’s open banking programme hosts a resource for start-ups to scale and develop open banking products. The programme advocates the benefits of collaboration and encourages co-innovation.

Mastercard’s second announcement reveals its new partnership with the UK-based Secure Trust Bank.

The Solihull-headquartered bank is engaging in the partnership to develop retail finance repayment solutions. This includes the use of Mastercard’s open banking technology to process account-to-account payments for its customers.

“This partnership provides customers with ways to pay back their retail finance directly from their chosen bank accounts,” said Jim Wadsworth, Mastercard’s SVP of open banking.