Connect with us

Business

BREXIT ROW: Bankers ’STAGGERED’ at Treasury for IGNORING small business fears | City & Business | Finance

Editor

Published

on

[ad_1]

Three unnamed senior bankers told the Financial Times the Treasury had ignored requests from banks to provide support for SMEs, despite growing fears Britain tumbling out of the European Union without an agreement could disrupt their cashflow and trigger a sharp increase in loan defaults.

SMEs are defined as employing fewer than 250 people but are still vital to the UK’s economy as they account for around half of the country’s private sector revenues and 60 percent of jobs.

But banks are becoming increasingly concerned around an apparent lack of preparation for Britain’s scheduled departure from the EU on March 29.

A senior banker at one high street lender launched a stinging attack on the Treasury, raging they were “staggered” by the lack of encouragement from the Government.

They told the Financial Times: “We spoke to them and suggested a government-backed scheme to tide people over — they nodded wisely then did nothing.

“We can provide liquidity and help with planning but there’s a point at which we’re not allowed to lend any more. We can’t cross that line.”

A board member at another large bank claimed they had heard nothing from the Treasury after proposing strengthening existing mechanisms such as the enterprise finance guarantee, which provides a government guarantee on loans to businesses that can’t meet lenders’ normal requirements.

Another senior banker attacked the Government for not implementing emergency members similar to those during the 2008 financial crisis.

The economic disaster a decade ago led to the collapse of tens of thousands of small businesses after banks pulled overdrafts and loans.

Sir Vince Cable, the Liberal Democrat leader and former Business Secretary, has urged the government to avoid a repeat of these bankruptcies.

He told the Financial Times at a business event in Kendal, Cumbria: “It would be disaster if it happened again.

“They would need to activate the guarantee schemes we had in the coalition government.”

A number of large banks have starting implementing processes in an attempt to minimise disruption for their business customers following Brexit.

Last October, the Royal Bank of Scotland revealed it was putting £2billion in funding aside to deal with any Brexit fallout.

In 2012, the Treasury provided a £20billion guarantee to banks for loans they provided to small businesses to enable them to lend at cheaper rates.

But the Treasury has rejected the criticism from senior financial figures, and said it has had “regular engagement with banks and other financial services providers”.

The Government department added the results of the Bank of England’s (BoE) most recent stress tests “are prepared and strong enough to continue to serve UK households and businesses even through a disorderly Brexit”.

In December, the BoE produced no-deal stress test scenarios for the UK banking system, with the worst case scenario forecasting the pound to fall below $1.

The latest fears surrounding British businesses come after it was revealed the UK economy grew at its slowest rate last year since 2012.

Figures from the Office for National Statistics showed GDP grew by 0.2 percent in the fourth quarter of 2018 compared to 0.6 percent in the previous three month period – the lowest level of growth since the start of last year.

Annually, GDP grew 1.4 percent, but this was the weakest it has been since 2012.

Last week, the BoE sensationally warned the UK economy is not prepared for a no deal Brexit after downgrading growth to its lowest level since the financial crash.

The Bank slashed this year’s growth forecast to 1.2 percent – the lowest since 2009, when the economy slumped 4.2 percent at the height of the recession.

This shock downgrade compares with 1.7 percent predicted in November, while the Bank has also cut its outlook for 2020 to 1.5 percent.

Bank of England Governor Mark Carney warned: “The fog of Brexit is causing short term volatility in the economic data, and more fundamentally, it is creating a series of tensions in the economy, tensions for business.

“Although many companies are stepping up their contingency planning, the economy as a whole is still not yet prepared for a no-deal, no transition exit.”

[ad_2]

Source link

قالب وردپرس

Business

S&P 500 posts highest close since November 8 on trade optimism

Editor

Published

on

By

[ad_1]

NEW YORK (Reuters) – The S&P 500 posted its highest closing level since Nov. 8 on Friday as investors clung to signs of progress in the ongoing trade talks between the United States and China.

Investors assessed a slew of headlines on the talks, with top trade negotiators from the two countries meeting to wrap up a week of discussions on some of the thorniest issues in their trade war.

If the two sides fail to reach a deal by midnight on March 1, then their seven-month trade war could escalate.

“People are expecting some sort of positive news on trade and tariffs with China fairly soon,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“But we won’t know until the end of next week,” he said, and, “there has been a lack of specifics.”

Optimism on the trade front and dovish signals from the U.S. Federal Reserve have driven the recent gains and left indexes well above their lows of December, when the market swooned on fears of an economic slowdown. The S&P 500 is now up about 19 percent since its late-December low.

The S&P 500 technology index was up 1.3 percent, leading gains among the 11 major S&P sectors, while the trade-exposed industrials index climbed 0.6 percent.

The Dow Jones Industrial Average rose 181.18 points, or 0.7 percent, to 26,031.81, the S&P 500 gained 17.79 points, or 0.64 percent, to 2,792.67 and the Nasdaq Composite added 67.84 points, or 0.91 percent, to 7,527.55.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 22, 2019. REUTERS/Brendan McDermid

All three indexes registered gains for the week, with both the Dow and Nasdaq posting a ninth week of increases.

The number of New York Stock Exchange and Nasdaq stocks hitting 52-week highs hit 367, the most since mid-September and outnumbered those hitting year lows by the widest margin in six months.

Stocks briefly pared gains after U.S. officials briefed on the negotiations said more time is likely needed in the talks given China’s resistance this week to American demands for specific steps by Beijing to end forced transfers of U.S. technology and certain other policies.

Afterward, President Donald Trump said there was a very good chance the United States would strike a deal with China to end the trade war, and that he was inclined to extend his March 1 deadline to reach an agreement.

“Right now the downside risk has been not as steep, but there’s always a concern that something happens last-minute,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

“Having a Chinese economy that stabilizes is constructive for global markets,” she said. “That’s what is key in terms of the market looking at the results.”

Kraft Heinz Co tumbled 27.5 percent, and was the biggest drag on the S&P along with a 1.7 percent fall in Class B shares of the company’s controlling stakeholder, Berkshire Hathaway Inc.

The packaged food company posted a quarterly loss, disclosed a Securities and Exchange Commission probe and wrote down the value of its iconic Kraft and Oscar Mayer brands.

Slideshow (2 Images)

Advancing issues outnumbered declining ones on the NYSE by a 2.99-to-1 ratio; on Nasdaq, a 2.45-to-1 ratio favored advancers.

The S&P 500 posted 64 new 52-week highs and three new lows; the Nasdaq Composite recorded 112 new highs and 21 new lows.

About 6.9 billion shares changed hands on U.S. exchanges. That compares with the 7.3 billion-share daily average for the past 20 trading days.

Additional reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Chizu Nomiyama and Jonathan Oatis

[ad_2]

Source link

قالب وردپرس

Continue Reading

Business

FCA sets $14 million annual target compensation for CEO Manley: filing

Editor

Published

on

By

[ad_1]

FILE PHOTO: Fiat Chrysler Automobiles (FCA) CEO Mike Manley arrives at the memorial service held in honor of former CEO Sergio Marchionne in Turin, Italy, September 14, 2018. REUTERS/Massimo Pinca/File Photo

DETROIT (Reuters) – Fiat Chrysler Automobiles NV (FCA) has set an annual compensation target for Chief Executive Officer Mike Manley consisting of pay, cash and equity bonuses of $14 million, the automaker said in a regulatory filing on Friday.

Manley took over as the head of FCA last July after the abrupt departure of his predecessor Sergio Marchionne. The company paid its new CEO 600,442 euros ($680,240) for 2018 and he will receive a bonus for 2018 of $367,000 to be paid this year.

Manley also was granted FCA 180,364 shares for his work in 2018, which will vest in 2019 if the company meets certain targets. The fair value per share on the date those were granted was $16.61, FCA said.

His target annual compensation consists of a base salary of $1.6 million, and a bonus of $2.4 million and an equity award valued at $10 million, both linked to the company hitting certain performance targets.

Former CEO Marchionne received 6.6 million euros in compensation for 2018, which consisted of nearly 2 million euros in base pay and an annual bonus for 2017 of just over 4.6 million euros.

For the 2014 to 2017 time period, Marchionne also received 2.8 million FCA shares. The fair value per share was $14.84, FCA said.

FCA chairman John Elkann received a base salary of 1.7 million euros and no annual bonus.

Reporting by Nick Carey; Editing by Sonya Hepinstall

[ad_2]

Source link

قالب وردپرس

Continue Reading

Business

Flattening U.S. yield curve in late 2018 ‘flashing red’ on economy: Fed’s Williams

Editor

Published

on

By

[ad_1]

President and Chief Executive Officer of the U.S. Federal Reserve Bank of San Francisco, John Williams, addresses a news conference in Zurich, Switzerland September 22, 2017. REUTERS/Arnd Wiegmann/File Photo

NEW YORK (Reuters) – A flattening U.S. yield curve in December, which was close to being inverted, was “flashing red” about a deceleration in U.S. economic growth heading into 2019, despite some solid data at the time, New York Federal Reserve President John Williams said on Friday.

The yield curve flattens as the gap between short and long-dated yields narrow, suggesting investors’ worries about a slowing economy.

The yield curve inverts when shorter-dated yields rise above longer-dated ones. An inverted yield curve has preceded all U.S. recessions in the past 50 years.

Williams was giving closing remarks at a conference about quantitative tools, jointly sponsored by the New York Fed and the Atlanta Federal Reserve.

Reporting by Richard Leong; editing by Diane Craft

[ad_2]

Source link

قالب وردپرس

Continue Reading

Chat

Trending