|Bid||220.90 x 0|
|Ask||221.20 x 0|
|Day's range||216.30 - 224.13|
|52-week range||176.55 - 274.20|
|Beta (3Y monthly)||1.17|
|PE ratio (TTM)||9.70|
|Earnings date||21 Feb 2019 - 25 Feb 2019|
|Forward dividend & yield||0.04 (1.83%)|
|1y target est||301.06|
Sterling, British bank shares and even German and Irish government bonds are some of financial prices most sensitive to the ebb and flow of Brexit developments as the long-running saga enters a crucial week. While Brexit has cast a cloud over world markets since the June 2016 referendum resulted in a narrow win for Leave, some assets are particularly sensitive to headlines and will show an outsized reaction, whatever the outcome of the talks. Following is a graphical tour of just what's in play as the Brexit endgame commences: SILVER AND GILT Sterling's exchange rate has been by far the most sensitive price to Brexit newsflow.
Momentum is sticky and persists for longer than investors tend to anticipate. The downside of this is that stocks with recent negative momentum are likely to c8230;
(Bloomberg) -- Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.The Brexit negotiations have taken a step forward with detailed talks set to begin for the first time since Boris Johnson became U.K. prime minister. The pound and U.K. banking stocks surged.After months of war-like rhetoric and threats, Johnson made a vital breakthrough in talks with Irish leader Leo Varadkar on Thursday, paving the way for detailed negotiations to start in Brussels.The two negotiating teams now have a weekend of intensive work ahead of them, examining draft legal text as they try to thrash out a deal in time for the summit of EU leaders on Oct. 17-18.But while the mood has brightened dramatically, the deal is not yet done. For one thing, it’s not clear what concessions -- if any -- Johnson has promised the EU, and whether he can get any deal through Parliament in London. The critical issue remains how to avoid a “hard” border, with customs checkpoints, at the land frontier between Ireland and the U.K after Brexit.“There is a joint feeling that there is a way forward that we can see a pathway to a deal,” Johnson told broadcasters on Friday. “That doesn’t mean it’s a done deal. There’s work to be done.”Key developments:Michel Barnier briefs EU ambassadors, but won’t reveal details of the U.K. concessionsEU agrees for detailed talks to intensify as negotiators aim for a dealBarnier hosted U.K. Brexit Secretary Steve Barclay for “constructive” meeting in BrusselsJohnson is keeping his Northern Irish Allies in the Democratic Unionist Party informed of his negotiations as they are key to ensuring any deal can pass a vote in ParliamentPound surges; RBS and Lloyds shares jumpThe DUP Responds (4:40 p.m.)Democratic Unionist Party leader Arlene Foster has finally given her reaction to Johnson’s latest offer. She reiterated her requirement that any deal must have the consent of the unionist community and fired a warning shot against any attempt to keep Northern Ireland in the EU’s single market. But, crucially, she didn’t go as far as to explicitly rule out supporting the prime minister. She said the party will use its “pivotal role” and “considerable influence” in Parliament to influence the outcome. “There will need to be a clear acceptance that the economic and constitutional integrity of the whole of the United Kingdom will have to be respected as we leave,” she said. “As a consequence of the mandate given to us by voters in 2017 the DUP is very relevant in the Parliamentary arithmetic and regardless of the ups and downs of the Brexit discussions that has not changed.”The DUP is in a formal arrangement to support Boris Johnson’s minority Conservative government and keep it in power. While it only has 10 votes in the House of Commons, some hardline Conservative MPs have indicated they will only back a Brexit deal if the DUP supports it too.U.K. Welcomes EU Talks Decision (3:45 p.m.)Boris Johnson’s office issued a statement welcoming the decision by the 27 other EU member states and saying his government is looking forward to negotiations “in the coming days.”“We welcome this decision, following the constructive meeting between the Brexit Secretary Stephen Barclay and Michel Barnier this morning, and building on the meeting between the prime minister and the Taoiseach yesterday,” Johnson’s team said in the statement. “We look forward to these intensified discussions in the coming days.”Industry Groups Raise Fears About Johnson’s Plan (3:40 p.m.)The U.K.’s aerospace, automotive, chemicals, food and drink and pharmaceutical sectors are concerned about Johnson’s plans for post-Brexit trading arrangements, the BBC reported, citing a letter sent by the group to the government. The plans can pose “serious risk to manufacturing competitiveness,” the letter said.In the letter, the industry representatives express their “growing concern” that British negotiators have dropped existing commitments to maintain regulatory alignment with the EU in relevant sectors. They also demanded reassurances that industry interests will be prioritized.Boris Johnson Is Elusive (2:57 p.m.)Johnson struck a cautious, yet optimistic note, in his first public comments since his meeting with Varadkar.“There is a joint feeling that there is a way forward that we can see a pathway to a deal,” the British prime minister told broadcasters in a pooled interview on Friday. “That doesn’t mean it’s a done deal. There’s work to be done.”He went on to say it “would be wrong of me to giving a running commentary on the negotiations. With the greatest possible respect I think, look at everything I’ve said previously. I think you can draw your own conclusions from that. But let’s our negotiators get on.”Pressed on what solutions he had proposed for the contentious Irish border question, Johnson said: “I can certainly tell you that under no circumstances will we see anything that damages the ability of the whole of the United Kingdom to take full advantage of Brexit, and I think that’s what people would expect, and that’s what I think we can achieve.”The pound, in the meantime, keeps rising. It’s now up 2%.The Devil Is in the Detail (2:06 p.m.)Barnier told the ambassadors that the U.K. had made concessions on both customs and consent without going into detail, an official said. Several ambassadors told him that the only thing that would work would be if the U.K. accepted the need for a Northern Ireland-only backstop, similar to the one thrashed out by the two sides last year, but Barnier refused to confirm that this was the plan, the official said.The issue about consent revolves around how the people of Northern Ireland should give their democratic consent to any agreement. It would involve some kind of regular sign-of from the region’s assembly.Question Is What Might the U.K. Have Given Up (1:47 p.m.)The U.K. conceded on some key issues that were standing in the way, an EU diplomat said following the debrief with Barnier. We are now looking to weekend negotiations, the diplomat representing one of the bloc’s member states, added.A second official, who was present in the debrief, said Barnier didn’t clarify what these U.K concessions might be. It’s an important question given how the U.K. depends on a Northern Ireland unionist party for backing in parliament.The EU Commission’s negotiator hinted that they are related to customs, and that we are heading toward a solution almost identical to the original Northern Ireland-only backstop, the ambassador said, asking not to be named, as the debrief wasn’t public.The bad scenario for this weekend is a backtracking from the U.K, in which case Barnier said he ’d discontinue the talks, the ambassador said. The good scenario is to bring a deal which resembles the original Northern Ireland-only backstop proposal of February 2018.In the latter case, a short technical extension may be required, the diplomat said.The meeting with Barnier was tense, with the French ambassador getting annoyed at one point because of the leaks to the media.Nothing Has Changed on Irish Border (1:38 p.m.)Let’s stay cautious. That is the message that resonated from the EU as speculation amped up on whether or not the divorce talks were headed into the final sprint.After meeting with his U.K. counterpart Stephen Barclay on Friday, Barnier told ambassadors from the 27 member states that there has been enough progress for talks to intensify.That isn’t quite the same as entering the so-called “tunnel” -- the formal Brussels process by which the actual legal text of an agreement is thrashed out in secret -- but it’s a sign both sides recognize a deal is still possible.Is It All Headed Into Secret Talks? (1:30 p.m.)So, EU envoys were briefed about a “possible convergence” between Ireland and the U.K, but a lot remains to be negotiated, a participant in the debrief with Barnier said. Ambassadors will reconvene either Sunday or Monday to take stock of the situation, the official said. The gist is to steer clear of using the word, tunnel, which implies a secretive process.What is obvious is that enough progress has been made to keep negotiating through the weekend with the aim of reaching a deal, instead of declaring talks dead today as Tusk said the plan was.Johnson Keeping Foster in Brexit Loop (12:30 p.m.)Boris Johnson has spoken to Arlene Foster, leader of the Democratic Unionist Party, about his Brexit proposals, according to a U.K. official.His office is keeping the DUP informed of the status of talks, aware that the party’s support for any deal could be crucial to it passing though The House of Commons.Pound Optimism Continues as Banks Surge (11:55 a.m.)The pound is now headed for its biggest two-day rally since before the Brexit vote in June 2016. The latest step higher came after a European Commission spokeswoman labeled the talks “constructive” (see 11:20 a.m.).Its not just the currency where optimism is mounting. Shares in Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc are up more than 9 %.Barclay-Barnier Meeting ‘Constructive,’ EU Says (11:20 a.m.)The European Commission was tight-lipped about the outcome of Friday morning’s meeting between EU chief Brexit negotiator Michel Barnier and U.K. Brexit Secretary Stephen Barclay, with a spokeswoman saying only that the talks were “constructive.”“You can assume they exchanged ideas, discussed many different angles,” Mina Andreeva told reporters in Brussels. “If there’s a will then of course there’s a way, otherwise people wouldn’t be working on this.”A U.K. spokesman used the same word to describe the talks.Brexit Talks May Enter Tunnel, Varadkar Says (11 a.m.)U.K. and EU negotiators may now enter the so-called tunnel for Brexit talks, Irish Prime Minister Leo Varadkar told reporters in Dublin.The focus is now on Brussels, he said, adding that he expects the U.K. will make more detailed proposals. The less said publicly about the talks the better, he said.DUP Lawmaker Warns on Stormont Veto (10.35 a.m.)Removing the so-called Stormont lock from any Brexit deal would leave Northern Ireland’s unionists “marooned,” Democratic Unionist Party lawmaker Jim Wells warned in an RTE radio interview.Northern Ireland Secretary Julian Smith’s suggestion that no one party in the region would have a veto through a vote in the Northern Ireland Assembly “does worry me,” Wells said, adding that “nothing will work unless unionism is signed up to it.”Acknowledging there had been a change of mood in the talks after Varadkar and Johnson’s meeting on Thursday, Wells, who is a member of the suspended Assembly, made clear that any plan which would force Northern Ireland to follow EU rules would be “unacceptable.”Pound Rises Again on Brexit Optimism (10:25 a.m.)The pound has surged 2.5% since Wednesday’s close, with traders jumping on the signs of Brexit optimism.It gained 0.6% to $1.2511 Friday, with Donald Tusk’s comments (see 10 a.m.) adding to the momentum. Deutsche Bank said Thursday evening it was no longer negative on the U.K. currency following a “pivotal moment” in Brexit talks.Options show sentiment on the pound over the next month is now the most positive since Bloomberg began compiling the data in 2003.Ireland: Detailed Talks Will Start (10:05 a.m.)While Thursday’s meeting between Johnson and Varadkar was positive, the “real detailed negotiation and technical work now will begin and that will be in Brussels,” Irish Finance Minister Paschal Donohoe said.Speaking on Newstalk radio, Donohoe pointed to the issue of allowing the region of Northern Ireland to give or withhold “consent” for any new customs system as a crucial area for discussion in the talks. There are differing views in the region on the issue, he said.EU’s Tusk Says ‘Promising’ Signals for a Deal (10 a.m.)EU Council President Donald Tusk gave some mixed messages over the chances of a Brexit deal, saying the U.K.’s proposals aren’t yet realistic but there are “promising signals.”“Unfortunately we are still in a situation in which the U.K. has not come forward with a workable, realistic proposal,” Tusk said in a televised statement in Cyprus. “A week ago I told Prime Minister Johnson that if there was no such proposal by today I would announce publicly there are no more chances” of a deal at next week’s summit of EU leaders.But Tusk said there was some positive news out of Thursday’s meeting between Johnson and Irish Prime Minister Leo Varadkar.“I have received promising signals from the Taoiseach that a deal is still possible,” he said. “Technical talks are taking place in Brussels as we speak. Of course there’s no guarantee of success and the time is practically up, but even the slightest chance must be used.”AB InBev Shelves U.K. Expansion On Brexit Fears (9:40 a.m.)Brewing giant Anheuser-Busch InBev SA put on hold plans to roughly double the size of its U.K. headquarters amid growing uncertainty over Brexit.The Belgian owner of Budweiser and Corona had been in talks to lease additional space in London’s Bureau building, where it already occupies the top four floors, two people with knowledge of the matter said.Fianna Fail Expects Talks to Resume (9.15 a.m.)The leader of Ireland’s main opposition party expects U.K. and EU negotiators to resume formal Brexit talks after Irish PM Leo Varadkar and U.K. leader Boris Johnson met on Thursday.Micheal Martin, who leads the Fianna Fail party, said he would be disappointed if talks don’t restart. “In good diplomacy there has to be accommodation and you can’t have one side losing face against the other,” he told RTE radio.Martin’s party is in a confidence and supply arrangement with the government, so is consulted on most major government decisions. He is likely to have been briefed on Thursday’s meeting.Barclay and Barnier Meet in Brussels (8:30 a.m.)U.K. Brexit Secretary Steve Barclay has arrived at the European Commission in Brussels for talks with the EU’s chief negotiator, Michel Barnier. The two will explore where things stand after Thursday’s meeting between the prime ministers of the U.K. and Ireland and discuss whether to restart more intensive talks.There’s no scheduled time for the meeting to end but Barnier is due to address EU ambassadors at 12:30 p.m. Brussels time.Earlier:Brexit Hopes Rise as U.K. and EU Take a Step Closer to a DealBoris Johnson’s Irish ’Pathway’ Is Full of Holes: Lionel LaurentImagine Brexit Heaven. It Isn’t Easy, I’ve Tried: John Authers\--With assistance from Tim Ross, Charlotte Ryan and Peter Flanagan.To contact the reporters on this story: Ian Wishart in Brussels at firstname.lastname@example.org;Nikos Chrysoloras in Brussels at email@example.com;Tiago Ramos Alfaro in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Flavia Krause-Jackson at email@example.com, Thomas Penny, Raymond ColittFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Here's what I think about investing in embattled Metro Bank (LSE: MTRO) shares right now, and is there a competitor that offers better value and potential?
(Bloomberg) -- After spending almost the whole year betting Brexit woes would weaken the pound, traders are now on red alert as the potential for a divorce deal sends sterling flying higher.The U.K. currency jumped the most over two days since 2009 after Thursday’s positive meeting between Prime Minister Boris Johnson and Ireland’s Premier Leo Varadkar. That was followed by further supportive comments, before a recommendation that Britain and the European Union enter into line-by-line negotiations on a Brexit accord.Markets are taking these developments to be a game-changer. One-month options have never shown a stronger bias in favor of contracts to buy the pound, based on Bloomberg data going back to 2003. U.K. bank stocks surged along with domestically focused equities and government bonds sank for a third day.The “pivotal moment” of a meeting between the British and Irish leaders was enough to convince strategists at Deutsche Bank AG to terminate a recommendation to sell sterling. Further progress on talks before the end of the month would risk greater pain for traders betting against the currency, and also spell danger for holders of U.K. government bonds and FTSE 100 stocks.“We cannot recall a time during the Brexit process of the last year at which the Irish government raised expectations to this extent,” wrote Oliver Harvey and George Saravelos, strategists at Deutsche Bank, who forecast correctly in 2015 that the pound would drop to its weakest level since 1985 in the following years. “We are no longer negative on the pound.”The pound stormed higher after Varadkar and Johnson said Thursday they could see a pathway to a deal before the Brexit deadline of Oct. 31. While much uncertainty still remains, if Ireland -- one of the most important protagonists in talks -- sees a way forward, that could at the least help avoid a crash exit, the worst-case outcome for the U.K. economy and the pound.European Council President Donald Tusk said Friday he has received “promising signals” that a Brexit deal is possible. A meeting between the European Commission’s chief negotiator Michel Barnier and his British counterpart Stephen Barclay was also described by both sides as being “constructive.” Barnier recommended that detailed talks can begin in earnest.Risk reversals, a barometer of market sentiment and positioning, surged for options that benefit from a stronger sterling. And demand for pound calls, which give the right to buy the currency, outweighs that for puts at a 2:1 ratio since the Johnson-Varadkar meeting, according to data from the Depository Trust & Clearing Corporation.It’s potentially bad news for hedge funds and asset managers, which were structurally short the U.K. currency, holding a net position close to record highs, according to U.S. Commodity Futures Trading Commission data.The pound gained 1.9% to $1.2678 by 3:00 p.m. in London Friday, following a 1.9% jump on Thursday. U.K. government bonds fell, sending 10-year yields 11 basis points higher to 0.70% as a Brexit deal may bode well for the economy and inflation.The currency may rally even more should a lack of bad news between the negotiating parties begin to turn into materially good news, according to Nomura International Plc strategist Jordan Rochester. The bank is recommending investors short the euro versus sterling. The pound jumped 1.4% to 87.20 pence per euro, reaching its strongest level since May.The U.K.’s FTSE 100 index rose 0.5%, but underperformed a rally of nearly 2% for the STOXX Europe 600 Index as a stronger pound may dent earnings from abroad. Both Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc climbed more than 12%, rallying with homebuilders, domestically focused stocks on the FTSE 250 index, and Irish equities.Shorts WhackedInvestors remain more cautious on sterling’s longer-term prospects. A September fund manager survey from Bank of America showed the U.K. has been the least favored region by investors in terms of equity allocation globally. Thirty percent of fund managers said they were underweight U.K. stocks.While demand for options that look for a weaker pound has waned, the market is still biased in favor of downside protection. That may partly reflect the dollar’s allure amid global growth concerns and trade jitters. A further improvement in market sentiment could come from trade talks between the U.S. and China, and that in turn may see bets on a stronger pound gain additional traction.“Momentum feeds momentum in sterling,” said Lars Merklin, a strategist at Danske Bank A/S. “Without more details it is impossible to say this time is the big one where a deal gets done.”(Updates with Bank of America survey, Danske comment.)\--With assistance from Blaise Robinson.To contact the reporters on this story: Vassilis Karamanis in Athens at firstname.lastname@example.org;John Ainger in London at email@example.comTo contact the editors responsible for this story: Paul Dobson at firstname.lastname@example.org, Neil ChatterjeeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- British bank shares jumped amid optimism that a U.K. deal to leave the European Union would support domestic lenders.Royal Bank of Scotland Group Plc rose as much as 16.4% on Friday, the biggest intraday rise since May 2010, and Lloyds Banking Group Plc gained as much as 12.5%, its largest increase since February 2016. Bonds of both firms rallied sharply, while Barclays Plc shares spiked as much as 7.2%.The surge came after European Council President Donald Tusk said he’d received “promising signals” that a Brexit deal is possible, following talks between U.K. Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar. The pound rose as much as 2%.British banks have repeatedly said they are ready for any Brexit scenario. Still, RBS Chairman Howard Davies has also said there is “considerable uncertainty and considerable nervousness” in the U.K. economy. Some lenders have taken provisions to prepare for an economic slowdown and a surge in bad loans in event of a departure from the EU without a deal, and RBS is unlikely to hit profitability targets next year.“Any deal is better than no deal,” said David Herro, chief investment officer for international equities at Harris Associates, which owns 2.86% of Lloyds shares and 2.05% of RBS. “Certainly Lloyds trades at a huge Brexit discount. And it’s the same thing for RBS.”Both banks’ shares trade below the levels seen before the EU referendum that set the course for Brexit in June 2016. RBS is also under pressure from the prospect of a new election, as Jeremy Corbyn, leader of the opposition Labour party, has considered halting disposals of the government’s majority stake.“Amid all the talk of a no-deal Brexit, the knee-jerk reaction to any sort of deal is positive,” Allan Monks at JPMorgan Chase & Co. said in a note to clients. “Many hurdles to a deal remain.”(Updates with share price move, adds analyst quotes.)To contact the reporter on this story: Stefania Spezzati in London at email@example.comTo contact the editors responsible for this story: Ambereen Choudhury at firstname.lastname@example.org, Marion Dakers, Keith CampbellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
* Optimism on Brexit and the trade war drive stocks higher * STOXX up 1.7%, Irish stocks jump 3.7% outperforming rest of Europe * Publicis sinks after results, drags WPP down * Hugo Boss shares slump 11%, pulling down Burberry Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to share your thoughts on market moves: email@example.com DIVERGING FORTUNES IN LUXURY (1256 GMT) Hugo Boss shares dropped more than 13% today hitting their lowest since December 2010 after the company's latest sales warning. The two companies highlight the polarisation in the luxury space, with some companies investing heavily on marketing and product design, while others, which lack the same firepower, struggling to compete, says Aneta Wynimko, a portfolio manager at Fidelity International, who leads a $1.3bn global equities consumer fund.
* Optimism on Brexit and the trade war drive stocks higher * STOXX up 1.7%, Irish stocks jump 4% outperforming rest of Europe * Publicis sinks after results, drags WPP down * Hugo Boss shares slump 11%, pulling down Burberry Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to share your thoughts on market moves: firstname.lastname@example.org MILESTONES GALORE AS JOHNSON'S BREXIT BUS APPEARS ON COURSE (1244 GMT) Banks, retailers, housebuilders... oh wait it's easy this way, 85% of the constituents in the FTSE midcap index are rallying! And in the rest of Europe, DAX is indeed having its Oktoberfest rising 2%. ** The FTSE 250 index is poised for its best single-day gain in more than 3 years.
Hopes that Britain will seal a Brexit deal saw unloved London-listed companies with exposure to the domestic economy rise more than blue-chip stocks on Friday, for the first time since May, in a major reversal of fortunes. JP Morgan's UK domestic plays index that tracks about 30 UK stocks that make all or most of their revenue at home soared almost 8% on Friday for its best day since the grouping was created nearly three years ago. The index outperformed the FTSE 100 by 4.4%, the only time since May that it has performed better.
European shares were on a tear on Friday as a surprise breakthrough in Brexit negotiations drove UK-focused London-listed companies and the Irish index about 4% higher, while German shares logged their best day in nine months. JP Morgan's UK domestic plays index, which was created in 2017 and tracks about 30 UK stocks that make all or most of their revenue at home, ended 7.7% higher, its best performance on record.
Britain's mid-cap index surged nearly 2% on Friday as hopes grew that a Brexit deal may be clinched by the end of the month, while a rally in blue-chip financial stocks and housebuilders helped the FTSE 100 reverse earlier losses. The FTSE 250 jumped 1.9% and was on course for its best day since January by 0953 GMT. After nearly three years of chaotic negotiations, signs that a divorce deal could finally be nailed down were enough to push London-listed companies with exposure to the domestic economy to a premium over the FTSE 100 for the first time since May.
The European Union agreed on Friday to enter intense talks with Britain to try to break the deadlock over Brexit, lifting financial markets with a sign that a deal could be done before the Halloween deadline. A flurry of activity has brought the fraught bargaining process to a new level as Britain's scheduled departure date of Oct. 31 grows ever closer, but it is still uncertain whether the two sides can make a breakthrough before then. By Thursday British Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar said they had found "a pathway" to a possible deal, and by Friday some officials were expressing guarded optimism.
London stocks finished a roller coaster session on Thursday with gains as domestic companies rose after Britain and Ireland said they saw a pathway to a Brexit deal, and international names jumped on to a global rally over hopes of a U.S.-China trade truce. The FTSE 100 ended 0.3% higher, after flipping back and forth during the day on mixed signals over the state of affairs between Beijing and Washington, while the midcap index that has a greater UK exposure also rose by the same level. Spirits company Diageo, consumer goods giant Unilever and AstraZeneca were among stocks hammered the most, causing the FTSE 100 to lag other major indexes.
(Bloomberg Opinion) -- An advertisement showing in U.K. cinemas currently shows a boy hesitating to kiss a female zombie. “But I’m kinda hot,” she says, popping chewing gum into her mouth before they lock lips — and her arm drops off. The finance community has a similarly conflicted relationship with Libor, the reference interest rates for everything from mortgages to car loans to corporate debt. This makes it likely that the benchmarks will survive beyond their planned termination date.The current plan is for Libor to wink out of existence by the end of 2021. Changes in the wholesale funding market mean it’s no longer based on actual transactions between banks. The Financial Conduct Authority is adamant that the U.K. finance industry should shift to using the Sterling Overnight Interbank Average rate (known as Sonia). In other jurisdictions, including the U.S. and the euro area, regulators are implementing replacements.But with a bit more than two years to go, a combination of complacency, complexity and inertia is keeping Libor very much alive.The Bank of England’s “Bank Overground” blog pointed out recently that the value of sterling swap contracts referencing Libor is increasing rather than decreasing, according to data compiled by LCH Ltd., the derivatives clearing house.The value of contracts that extend beyond Libor’s mooted end date has increased since April 2018, and stands currently at more than 10 trillion pounds ($12 trillion), as the chart above shows. Even by 2026, more than 5 trillion pounds of Libor swaps will still be outstanding. “Use of Libor remains widespread, and this poses risks to market stability,” the Bank of England blog says.There has been some progress in moving financial products to the regulators’ recommended replacement. Earlier this month, Royal Bank of Scotland Group Plc’s NatWest unit switched the reference rate on an existing loan to South West Water to Sonia. In July, the same bank made the first new loan based on Sonia, to National Express Group Plc.Of course, some of the warnings about the need to accelerate away from Libor are self-serving. Consultants and lawyers will make money from offering expensive advice on the transition; it’s in their interests to emphasize the dangers.But the sheer volume of outstanding notes around the world still tied to Libor and expiring after 2021 — as much as $864 billion, the International Capital Markets Association estimated earlier this year — leaves many financiers skeptical that the regulators will carry out their threat to kill off the benchmarks as planned.A survey published last month by consulting company Accenture Plc showed 23% of respondents expect Libor to survive past its current death date. The poll of 177 global banks, asset managers and companies showed just 18% of the respondents described their shift away from the benchmarks as “mature,” with only one-fifth saying they were “operationally ready.”Regulators face a tough choice. If Libor wins a stay of execution, there will be even less pressure to switch away from the old reference rates. But if they stick to their guns, billions of dollars and euros and pounds of contracts will come untethered as the interest rates on which their payments are based disappear.That risk is too big to ignore. Sure, Libor is flawed and outdated and probably beyond redemption. But with less than 27 months to go, the finance industry needs more time to come to terms with its demise. Let Libor live on. Sometimes even a zombie can be hard to resist.To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Follow @Brexit, sign up to our Brexit Bulletin, and tell us your Brexit story. Boris Johnson will meet Irish Prime Minister Leo Varadkar on Thursday as the U.K. and European Union seek a breakthrough in stalled talks to reach a Brexit deal. EU chief negotiator Michel Barnier warned the two sides are in no position to reach an accord, but said that with "goodwill" there’s still the possibility of doing so. Johnson said he is "cautiously optimistic.”Johnson has also scheduled an emergency sitting of Parliament for Oct. 19, the day after he returns from a summit of EU leaders in Brussels. The crisis session will give MPs the chance to debate the way forward. A rare Saturday session in the House of Commons, it’s set to be fraught as politicians weigh their options: delaying Brexit, crashing out with no deal, or trying to bring down the government.Key Developments:Johnson and Varadkar to Meet in northwest England on ThursdayParliament to sit on Saturday Oct. 19 after crunch EU summit. Parliament has only met four times on a Saturday since 1939.Brexit Secretary Stephen Barclay to hold talks with EU Chief Negotiator Michel Barnier on ThursdayBarnier: a deal is “very difficult, but possible”Johnson’s DUP allies reject mooted European compromise plan for Irish borderBrexit Talks Go On Hold as Leaders Focus on Pinning BlameJohnson Says He’s ‘Cautiously Optimistic’ (5:45 p.m.)Boris Johnson posted a campaign video on Twitter summing up his week so far, including announcements on hospitals and police, a reference to Extinction Rebellion protests in London and -- inevitably -- a reference to Brexit."We’ve been also negotiating with our friends and partners in the EU about Brexit,” Johnson said. “I’m still cautiously, cautiously optimistic."U.K. Banks to Help Companies With Brexit Loans (5:25 p.m.)U.K.’s banks signed up to a government-backed program designed to ensure small and medium-sized companies have access to the cash they need to prepare for Brexit.The government’s British Business Bank will make 1.3 billion pounds ($1.6 billion) available to lenders to enable them to help SMEs invest in capital, increase export capabilities and manage cash flow, the Business Department said in an emailed statement.The program was finalized at a meeting of the government’s Business Finance Council, co-chaired by Business Secretary Andrea Leadsom and Economic Secretary to the Treasury John Glen. Banks signed up include Barclays, HSBC, Royal Bank of Scotland, Lloyds and Santander.Johnson and Varadkar to Meet On Thursday (5:05 p.m.)The British and Irish leaders will meet over lunchtime on Thursday for what looks likely to be a make-or-break conversation for the chances of getting a Brexit deal by the Oct. 31 deadline. Boris Johnson is hosting Leo Varadkar in northwestern England for the private talks, along with members of their senior teams, according to statements released by both sides."This will be a private meeting to allow both leaders and their teams to have detailed discussions about the process for securing agreement for a Brexit deal," the Irish government said in a statement.Barnier Aims For Moral High Ground (4:50 p.m.)The EU’s chief Brexit negotiator distanced himself from some of the more inflammatory rhetoric that emerged on Tuesday, saying the bloc would remain “calm, vigilant, constructive and respectful of the United Kingdom and those who govern it.”Michel Barnier told European lawmakers that while the two sides were still far apart, there was the possibility of an agreement -- as long as there’s “goodwill.” But, with negotiations at an impasse, he didn’t show any sign that the EU is ready to give ground.He spelled out some of the more serious issues of disagreement, describing Brexit as “something that’s long-term” and “creating specific serious problems, first and foremost for Ireland.”The biggest area of dispute relates to customs arrangements on the Irish border. Barnier rejected the U.K.’s bid to work those out during a post-Brexit transition period because if that didn’t end up happening it would lead to “no checks whatsoever,” which would damage the EU’s single market.He also criticized the U.K.’s plan to give the Northern Ireland assembly a veto over the deal and the government’s request to remove the so-called level playing field commitments, agreed by Johnson’s predecessor Theresa May -- which would prevent the U.K. undercutting the EU on issues such as taxation, environmental standards and social protection. That was about “a basic sense of fairness and loyalty,” he said.Barnier: No Position at Moment to Get Brexit Deal ( 4:15 p.m.)EU chief Brexit negotiator Michel Barnier told the European Parliament that “time is pressing” to get a Brexit deal, but the sides aren’t in a position to reach an agreement yet.Among disagreements is the issue of customs checks on the Irish border, he says. “We need to have proper rigorous checks all along our external border,” he said.EU’s Juncker Says Don’t Blame EU (4:00 p.m.)EU Commission President Jean-Claude Juncker says he doesn’t “exclude a deal” on Brexit.“We are not accepting this blame game which started in London -- we are not to be blamed,” he told the European Parliament in Brussels.Ireland Holds Out For Brexit Solution (2 p.m.)Ireland needs a solution to the border with Northern Ireland that “can be sustained into the future” after Brexit, Finance Minister Paschal Donohoe said in a Bloomberg TV interview in Dublin. Ireland still requires a deal that preserves “the principles behind the backstop,” he said.Any proposal to seek the consent of Northern Ireland tied must “respect the role” of the two communities of Northern Ireland, Donohoe added. The U.K. plan in its current form could give an effective veto to just one political party in the region.Merkel Not Breaking Code of Silence (1:30 p.m.)Angela Merkel’s chief spokesman, Steffen Seibert, kept getting pressed about the now-famous morning phone call. The U.K. side have given their take on it but Germans are not, but one can try and read between the lines.Here is what he said to reporters in Berlin:“We have no new position on Brexit, neither the chancellor nor the government. This is what we’ve always said. The government will work to find a solution until the last possible moment, so that we can have an orderly U.K. exit out of the EU and avoid the scenario of a no-deal or disorderly exit, because that is the worst-case scenario for all involved.”Asked more pointedly whether the chancellor said what the British press (or Downing Street) said she said: “A private conversation is a private conversation.” He went on to say, again, that Germany’s position hasn’t changed.Barnier: Deal Is ‘Difficult But Possible’ (12:15 p.m.)Michel Barnier, the EU’s chief Brexit negotiator, said a deal with the U.K. is “very difficult but possible” as he prepared to meet with Brexit Secretary Stephen Barclay on Thursday.“The EU will remain calm, vigilant, respectful and constructive. The technical talks continue and I’m invited for working lunch with Steve Barclay tomorrow,” Barnier told reporters on Wednesday. “I think a deal is possible, very difficult but possible.”Irish Backstop Can’t Have time limit, EU Says (12 p.m.)EU Budget Commissioner Guenther Oettinger said he and his European Commission colleagues had discussed Brexit and all agreed the latest British proposal was inadequate. The Irish backstop can’t have a time limit, Oettinger told reporters in Brussels.Boris Johnson Has a Plan B for Brexit If the EU Rejects His DealReported EU Plan Non-Runner, DUP Says (11:35 a.m.)The DUP moved quickly to kill off a reported move by the EU to break the deadlock by giving the Northern Ireland Assembly a say over how long EU customs rules last (see 11:20 a.m.). Brexit spokesman Sammy Wilson said this would allow Sinn Fein keep the region bound to the EU indefinitely.“This is worse than Mrs May’s deal, which at least contained the pretense of these arrangements only being used as an insurance policy,” he said in a statement. “This proposal confirms the intended permanency of keeping Northern Ireland in the EU and removing us from the United Kingdom.”Scottish Court Delays Decision on Extension (11:25 a.m.)Scottish judges held off intervening in the Brexit furor by postponing a decision on whether they need to commit to sending a letter requesting an extension, giving Boris Johnson a temporary legal victory.The judges ruled that Johnson hadn’t acted unlawfully but left the door open to a new case if he fails to reach a deal with the EU and refuses to request an extension by Oct. 19, as he would be required to by law. Under a power peculiar to Scottish law, known as nobile officium, Scottish courts can intervene in any way they see fit to fix an outcome.At the hearing in Edinburgh, Johnson’s lawyers promised he will obey the law and request an extension from the EU, while also arguing that there’s nothing to stop the prime minister continuing to say he intends to leave on Oct. 31.Potential Backstop Offer Floated (11:20 a.m.)The EU may be willing to make a major concession to Boris Johnson over the Irish border by giving the Northern Ireland Assembly a say over how long EU customs rules last in the province, the Times newspaper reported.In an attempt to break the deadlock, the bloc is dangling the prospect of the assembly in Belfast being able to pull Northern Ireland out of the so-called backstop mechanism, aimed at preventing a hard Irish border, but it would need to vote at some point after a few years with a double majority, an EU official said.This would mean it would need to be approved by both nationalist and unionist politicians, something that was immediately rejected by Sammy Wilson, Brexit spokesman for the DUP. Sinn Fein also appeared to reject the idea.It would also need Johnson to agree to keep Northern Ireland in the EU’s customs union until then, and possibly forever, something he’s said he’s not willing to do.The idea is not an official EU position and would need the approval of the Irish government, but officials say it is seen as a potential compromise and that has been made clear to U.K. negotiators. Bloomberg reported last week that the EU was considering offering to time-limit the backstop linked to the assembly’s consent.Barclay and Barnier to Meet on Thursday (11 a.m.)Brexit Secretary Stephen Barclay will travel to Brussels for talks with European Union chief negotiator Michel Barnier on Thursday.The meeting is being seen as a stock-take, rather than an indication of a breakthrough -- or breakdown -- in negotiations, according to British officials.Parliament Set For Emergency Saturday Sitting (Earlier)MPs will sit in emergency session in London on Saturday Oct. 19, just 12 days before Britain is set to leave the EU, the day after a crunch summit of EU leaders in Brussels.If Boris Johnson strikes a deal with the EU, it will be a chance for politicians to vote on it, but if he doesn’t, it could also present an opportunity for the premier to ask Parliament to sanction a no-deal Brexit.Parliament has already passed a law requiring Johnson to ask for an extension to negotiations if no deal is reached by Oct. 19, but he could use the debate as an opportunity to set out ways he plans to get around the so-called Benn Act and deliver on his promise leave the EU on Oct. 31.It will be the first time the House of Commons has met at a weekend since 1982, when MPs debated the Falklands War.Denmark Increases Support for SMEs (Earlier)Just two days after Boris Johnson called Danish Prime Minister Mette Frederiksen to discuss Brexit, the Business Ministry in Copenhagen announced it is spending an extra 50 million kroner ($7.4 million) to help the country’s small and medium-sized companies deal with the fallout from the U.K.’s departure from the EU.“A no-deal Brexit continues to be a high-risk scenario and that’s why we need to step up preparations,” Business Minister Simon Kollerup told reporters. “Denmark will be hit really hard by a no-deal Brexit, especially if we are not prepared enough.”Earlier:Brexit Talks Go On Hold as Leaders Focus on Pinning BlameBanks Warned Over Failure to Move Employees in Time for BrexitBOE Warns U.K. May Face Economic Turmoil in No-Deal Brexit\--With assistance from Morten Buttler, Kitty Donaldson, Patrick Donahue, Anna Edwards, Jonathan Stearns, Rodney Jefferson and Dara Doyle.To contact the reporters on this story: Tim Ross in London at email@example.com;Ian Wishart in Brussels at firstname.lastname@example.org;Alex Morales in London at email@example.comTo contact the editors responsible for this story: Tim Ross at firstname.lastname@example.org, Thomas PennyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
With weeks to go until Alison Rose takes over as CEO of Royal Bank of Scotland , shareholders are demanding a shake-up of the state-backed lender, with cuts to its minnow investment bank topping their agenda. Rose's predecessor Ross McEwan said NatWest Markets was worth keeping for its ability to supply foreign exchange, financing and hedging to the bank's corporate clients but with profits dwindling, investors say it is ripe for cuts. RBS's investment bank once spanned the globe with assets greater than Britain's GDP, but it also made catastrophic market bets that led to a 45 billion pound ($55 billion) taxpayer bailout during the 2007-2008 financial crisis.
The way the card works is when a customer presents a card, a green light on the card indicates that the fingerprint has been matched successfully.
Tesco's financial arm intends to appoint John Kingman, the businessman who oversaw Britain's bailout of its banks during the financial crisis, as its chairman, a source with knowledge of the matter told Reuters. Tesco Bank on Monday appointed Kingman to its board as a non-executive director, following a Sky News report on Saturday that the retail lender was lining him up to be its chairman.
Rupert Hargreaves explains why he believes Metro Bank is a poor investment compared to RBS, which offers much more profit potential.