Survey shows investors have lost faith in the Bank of England’s decision-making
A new survey of 964 UK-based retail investors has revealed that just 39% of UK retail investors trust the Bank of England’s decision-making. Less than half (42%) think the central bank is right to continue hiking the base rate, while 46% think higher wages are a major factor in fuelling high inflation in the UK.
As interest rates hikes impact the economy and their investments, less than two in five UK retail investors have faith in the Bank of England’s (BoE) decision-making, the research commissioned by capital markets group HYCM has revealed. The firm commissioned an independent survey of 964 UK-based investors, all of whom have investments over £10,000, excluding the value of their savings, pensions and residential property.
When quizzed about the BoE’s hiking cycle, over a third (35%) say rising rates have harmed the value of their investments. Meanwhile, 46% believe further rate hikes will damage the UK’s economic growth.
Despite this, only 42% of investors say they monitor the BoE’s monetary policy decisions to inform their investment activities, and 34% have shifted their investments towards assets or markets that are less sensitive to interest rate hikes over the past 12 months.
“It’s clear that the Bank of England’s rate hiking cycle has had a significant impact on investor sentiment towards the central bank,” commented Giles Coghlan, Chief Market Analyst consulting for HYCM. “However, despite some losing faith in the bank’s decision making, many investors still recognise that more action may be needed to curb the inflationary pressures that remain, such as the recent wage growth data.”
BIS and central banks of France, Singapore and Switzerland successfully test cross-border wholesale CBDCs
The Bank for International Settlements (BIS) and the central banks of France, Singapore and Switzerland have successfully concluded Project Mariana. The project tested the cross-border trading and settlement of wholesale central bank digital currencies (wCBDCs) between financial institutions, using new decentralised finance (DeFi) technology concepts on a public blockchain.
Project Mariana was developed jointly by the Swiss, Singapore and Eurosystem BIS Innovation Hub centres, with the Bank of France, the Monetary Authority of Singapore, and the Swiss National Bank.
The project’s proof of concept successfully tested the cross-border trading and settlement of hypothetical euro, Singapore dollar and Swiss franc wCBDCs between simulated financial institutions. The process relied on three elements:
- A common technical token standard provided by a public blockchain to facilitate exchange and interoperability between the different currencies.
- Bridges for the seamless transfer of wCBDCs between different networks.
- An Automated Market Maker (AMM), which is a specific type of decentralised exchange to trade and settle spot FX transactions automatically.
For Project Mariana, the AMM pooled the liquidity of the hypothetical euro, Singapore dollar and Swiss franc wCBDCs, with innovative algorithms enabling spot FX transactions to be priced and executed automatically and settled immediately. These protocols could be used by the next generation of financial market infrastructures, facilitating cross-border trading and settlement between financial institutions.
Project Mariana’s architecture balances central banks’ domestic need for oversight and autonomy with financial institutions’ interest in efficiently holding, transferring, and settling wCBDC across borders. This is achieved using a common token standard on a public blockchain, which facilitates interoperability and seamless exchange of wCBDCs across varied local payment and settlement systems maintained by participant central banks. As such, Mariana offers possible approaches to factoring an international dimension into current wCBDC design explorations.
“Project Mariana pioneers the use of novel technology for interbank foreign exchange markets,” said Cecilia Skingsley, Head of the BIS Innovation Hub. “It successfully demonstrated that it is feasible to exchange wholesale CBDC across borders using novel concepts such as automated market makers. Bringing together a diverse team of software engineers, policy, and FX experts across three Innovation Hub centres and central banks was key to this success.”
ESMA to focus on digital change and the green transition in 2024
The European Securities and Markets Authority (ESMA), the EU’s financial market regulator and supervisor, today publishes its work programme for 2024.
In an economic context marked by high inflation, heightened geopolitical tensions and rapid technological changes, ESMA says it will ensure close market and risk monitoring and support the effective implementation of the European regulatory framework related to the digital and sustainability transitions. By fostering effective regulation and supervision of the European capital markets, ESMA contributes to addressing the challenges faced by the EU and its citizens.
“The implementation of a number of significant legislative projects will shape ESMA’s work and responsibilities in 2024,” said Verena Ross, Chair of ESMA. “In particular, the finalisation of the regulatory framework under MiCA and the preparations with national authorities for the new regime will be important to contribute to enhancing investor protection in the crypto market. The authorisation of the first Consolidated Tape Providers will increase transparency and foster a single data source across the EU’s financial markets.”
ANZ Worldline Payment Solutions enables Alipay+ for Australian customers
ANZ Worldline Payment Solutions – a joint venture between ANZ and global payments firm Worldline – has announced that it now enables businesses to accept payments through Alipay+ from at least six digital wallets, including Alipay, AlipayHK (Hong Kong SAR China), Kakao Pay (South Korea), Touch ‘n Go eWallet (Malaysia), TrueMoney (Thailand) and GCash (the Philippines).
Through a single Alipay+ enabled Worldline Move 5000 Eftpos terminal, businesses can accept the Alipay+ enabled wallets and the other card schemes and wallets they accept – no additional hardware or payment terminal needed. To make a purchase, customers select their preferred digital wallet on their mobile device and scan the Worldline QR code that automatically displays on the Eftpos terminal.
“International shoppers and travellers seek out businesses that offer their preferred and trusted payment method and even say they’d be more willing to spend with those businesses that do,” said Petr Ryska, CEO, ANZ Worldline Payment Solutions. “While choice and familiarity are important for consumers, ease of integration and the consumer experience are top priorities for businesses. By accepting more digital wallets through Alipay+, businesses will put themselves in a strong position to access some one billion potential new customers from right across Asia.”
RMB retains fifth place among most active global payments currencies
Swift’s RMB Tracker has shown that in August 2023, the RMB retained its position as the fifth most active currency for global payments by value, with a share of 3.47%. Overall, RMB payments value increased by 18% compared to July 2023, while in general, all payments currencies increased by 4.02%. Regarding international payments, excluding payments within the Eurozone, the RMB ranked sixth with a share of 2.59% in July.
The tracker uses data from live and delivered MT 103 and MT 202 - customer-initiated and institutional payments - and ISO equivalent messages exchanged on Swift. RMB’s fifth place out of all international currencies in August saw it behind the US dollar (48.03% of all global payments value), the euro (23.22%), the British pound (7.14%) and the Japanese yen (3.68%).
As a global currency in the trade finance market, based on live and delivered inter-group only MT 400 and MT 700 messages exchanged on SWIFT, RMB ranked third based on value, accounting for 4.82% of August’s trade finance transactions. This field was dominated by the US dollar (83.95%), while the euro also placed higher (6.43%).
Regarding FX spot transactions, RMB was August’s fourth most used currency for FX confirmations, moving ahead of the yen. The US dollar was the most used, followed by the euro and pound. In terms of the top economies carrying out FX spot transactions in RMB, the UK came out on top in August (39.32%), followed by the US (15.06%), Hong Kong (9.58%), China (7.68%) and France (7.61%).
AFP delivers corporate finance workshop for Indiana University students
A partnership between the Indiana University Kelley School of Business and the Association for Financial Professionals aims to create new opportunities for students interested in careers in corporate finance, financial planning, and analysis. The new AFP Corporate Financial Planning and Analysis Workshop will help students cultivate essential financial and business analysis skills in high demand.
Through the partnership, the Kelley School continues a legacy of creating workshops for undergraduate students that arm them with industry-specific knowledge that sets them apart when they begin their work lives.
“In conversations with companies and alumni in corporate finance, we have learned there is an increasing demand in corporate finance for graduates who have strong business analytics skills, which this workshop will concentrate on,” Kelley School Dean Ash Soni said. “Through this generous partnership, our students will be even more poised for future success in their careers in corporate finance.”
Zumo platform meets tech requirements of FCA’s financial promotion regime for crypto assets
Zumo, a UK-based digital-asset-as-a-service platform, has announced it has become the first digital asset platform to have integrated tech-based requirements of the Financial Conduct Authority’s (FCA’s) new financial promotions regime for crypto asset firms, set to take effect from 8 October 2023.
Zumo’s financial promotions technical flow design that the FCA had deemed appropriate has now been implemented.
The new regulation by the FCA mandates enhanced consumer protection measures, a development that Zumo has integrated, ensuring consumer confidence and security amid a volatile backdrop where significant players have paused their UK operations. The FCA recently expressed concern that many of the 150 unregistered crypto firms with UK customers have yet to respond to the regulator.
“The rigorous adherence to regulatory frameworks is not just about compliance but is a testament to our commitment to be the trusted and sustainable partner for digital assets, ensuring the safety and the integrity of the digital asset industry,” said Nick Jones, CEO, Zumo.
Slope announces US$30m funding round from USV and Sam Altman
B2B payments firm Slope has announced a US$30m funding round led by Union Square Ventures, with significant participation from OpenAI’s Sam Altman, bringing our combined equity and debt funding to US$187m.
“We still have funds from last year’s round in the bank and were not planning to raise anytime soon, but when the opportunity presented itself, we grabbed it inspired by the words of Warren Buffet: “Be fearful when others are greedy and greedy when others are fearful,” commented Lawrence Lin Murata, CEO of Slope. “These funds will enable us to continue playing on the offense, conquering opportunities when incumbents and competitors are on the defense. As we continue to scale and build out our product, go-to-market, and operations, we’d love to share this journey with others.”
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