We have seen many crises in the past, but this one is in many ways unique and I cannot recall a similar set of circumstances in my 43 years in markets. Financial crises have been global before but have originated within the financial system. Natural disasters have been localised as has dislocation due to terrorism and wars. This pandemic is unique as it is the first time we have seen such dislocation in so many countries at the same time. All financial centres are going through unprecedented emergency implementation of disaster planning activation.
It is unprecedented in Financial Markets (at least in my memory!) to have so many people working from home globally. We have previously seen localised examples such as on Wall Street after the tragic event of 9/11, but nothing on this global scale. As firms dust off the business continuity plans, some are hitting problems such as systems not allowing remote trading. This requires a tweaking of rule books and system settings. For those deploying a unified, modular platform, the task is somewhat easier when suddenly so many core staff are working from home as any system changes can be made once, and once only.
We are living in an unknown world at the moment.
Unknown for our day-to-day working life, unknown for our health, for our relatives , for our holidays and for our immediate future.
Buried in the depths of the Communiqué from the G20 Finance Ministers & Central Bank Governors Meeting on the 23rd of February was a stark call to arms regarding LIBOR transition. Building on the comments from National Competent Authorities (NCA) came a clear G20 statement:
Unsurprisingly, the Future at Lloyd’s took centre stage at this year’s TINtech London Market event. Many were struck by the scale of the proposed changes and what these meant for the market as a whole. From the talks and workshops that I attended, I have picked two key changes that will not only innovate but may redefine how insurance professionals access the market.
It would have been one thing pondering on how to deal with a misdirection of Cupid’s bow recently on St. Valentine’s Day. But, instead, how do your customers react, when attempting to book a deal on-line, when a quoted price is rejected? It can often lead to confusion and leave a negative feeling if not properly understood as to why it occurred.
We saw during 2019 increased interest in various projects for a Central Bank Digital Currency (CBDC) launch as a recurring theme. CBDC is a digitised sovereign currency, created and issued by, and a liability of, the country’s monetary authority. As such they are viewed as legal tender which is a core difference to cryptocurrencies and stablecoins. Those who made it up the Davos slopes to the World Economic Forum (WEF), were met with ideas and discussions taking place on how CBDC could be a potential solution to multiple challenges, including financial inclusion and efficiencies in the global payment systems.
In the optimistically titled film ‘2001’, Stanley Kubrick introduced a world where AI (in the form of the cycloptic HAL-9000) was entrusted with the critical functions of a spaceship. HAL was considered infallible by its human masters. However, confused by conflicting priorities and orders, this led to unexpected behaviour and conflict.
CTO's, Product Directors and all varieties of tech gurus are eager to find use cases for AI under their remit; capturing a market or increasing their profile within their businesses. What they/we risk doing is artificially creating use cases that do not benefit the organisation, users or customers.
As is traditional this time of year, our good intentions of New Year resolutions fade to what we might expect to be dominant themes in 2020, and it has to be said that if certain plans are not yet well advanced you might want to get to it!
When Lloyd’s released ‘Blueprint One’ in September last year, it was broadly met with approval from the market. However, calling the document a blueprint overlooks a great deal of information which still needs to be shared with (and accepted by) the market. So, with the next document due at the end of January, what did the blueprint say and what should we expect?
As we settled down to the first full working week of 2020, ESMA published the latest and final set of papers on the Securities Financing Transactions Regulation (SFTR) with guidelines on reporting structures. This was accompanied by the amended SFTR validation rules and a statement on Legal Entity Identifiers (LEI). The good news is that it now clarifies a number of provisions pertaining to SFTR, alongside some practical guidance.