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Out Of The Industry

The right sees opportunity in a crisis. Why can’t the left? | Larry Elliott

Labour missed its chance for real change after the financial crash. Now it is in danger of flunking it on Brexit

In normal circumstances, John McDonnell’s plan to shake up the Bank of England would be creating quite a buzz in Labour circles. The proposal that Threadneedle Street should have a productivity growth target as well as one for inflation would be the biggest change to the way the Bank operates since it was granted the power to set interest rates by Gordon Brown in 1997. These, though, are not normal circumstances. The political focus is on whether the government can get Brexit legislation through parliament, not on whether it is possible to give the Bank the task of raising Britain’s long-term growth rate. As the second anniversary of the EU referendum approaches, McDonnell might think it is time to move on, but the left as a whole is having trouble doing so. That’s unfortunate but indicative of a deep, and politically dangerous, conservatism.

Related: Labour to propose Bank of England remit to boost productivity

Related: Enough Brexit fairytales. In the real world spending must increase | Phil McDuff

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Source: The Guardian

David Drumm, former chief of Anglo Irish Bank, sentenced to eight years in jail

Found guilty of fraud, Drumm’s case related to banking transactions during the financial crisis

The former chief executive of Anglo Irish Bank, David Drumm, has been sentenced to eight years in jail but will serve six, over transactions conducted during the 2008 financial crisis.

The decision at Dublin circuit criminal court comes two weeks after Drumm, 51, was found guilty of conspiracy to defraud and false accounting. The case related to banking transactions he was involved in at the height of banking crisis. By circulating deposits between Anglo and Irish Life & Permanent (IL&P), the bank created the impression that its deposits were €7.2bn (£6.3bn) larger than was actually the case. He has acknowledged a “huge error in judgment”.

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Source: The Guardian

UK could lose £10bn a year in City-related tax revenue after Brexit

Sir Mark Boleat says rows over deal or no deal now ‘irrelevant’ and up to 75,000 jobs could go

A leading City figure whose former role involved governing the Square Mile has said Brexit could result in the loss of 75,000 jobs and up to £10bn in annual tax revenue.

Sir Mark Boleat, who was chairman of the City of London Corporation until last year, said a seepage of jobs from the capital was already underway and that the political rows over a deal or no-deal outcome was now “irrelevant” to City chief executives.

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Source: The Guardian

Labour to propose Bank of England remit to boost productivity

John McDonnell will call for major changes to UK’s financial system based on broad review

The Bank of England could be given a mandate to boost productivity growth under a Labour government as part of opposition plans to overhaul the country’s “economic architecture”.

Revealing the findings from a review of the UK financial system, the shadow chancellor, John McDonnell, will on Wednesday make the case for a fundamental transformation that could include a revamp of the Bank’s remit in order to help drive economic growth.

Related: Government urged to use RBS majority stake to veto branch closures

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Source: The Guardian

John McDonnell's ambition is fine, but he needs to avoid statism | Nils Pratley

It’s no longer 2008 and renationalising Royal Bank of Scotland would be pricey

Shadow chancellor John McDonnell promised fresh ideas from Labour for the UK economy and here they come, courtesy of economist Graham Turner’s “financing investment” report. The headline-grabber is the proposal to give the Bank of England a target for generating growth in productivity, which certainly counts as original. But there’s another proposal – an old one – that ought to be dropped as out-of-date, expensive and risky. It’s the idea of “using publicly owned Royal Bank of Scotland to concentrate on delivering SME lending across the country”.

Such a plan was a realistic option in 2008 when the last Labour government rescued RBS by taking a 83% stake during the banking crisis. Full 100% control might have been wiser in hindsight. But events have moved on. After the Treasury’s sale of a 7.7% chunk of shares a fortnight ago, RBS is only 62.4%-owned by the state. If chancellor Philip Hammond gets his way, RBS will be substantially in private hands before the next election, assuming the poll happens in 2022.

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Source: The Guardian

Visa admits 5m payments failed over a broken switch

IT meltdown affected millions across Europe, but Treasury committee is ‘satisfied’ with company’s response

Visa has admitted that 5.2m transactions failed during its IT collapse earlier this in June – because a back-up data centre designed to handle all transactions across Europe would not switch on when the problems emerged.

The extraordinary service failure on the afternoon of Friday 1 June saw queues build up at petrol stations and shopping left at supermarket tills as customers were unable to pay.

Related: UK debit cards transactions overtake cash for the first time

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Source: The Guardian

Lloyds under pressure as HBOS fraud report is published

Report says Lloyds mishandled investigation and disclosure of fraud after HBOS takeover

An internal Lloyds Banking Group report written by a former manager at the bank and published on Tuesday alleges serious misconduct by the lender over the handling and disclosure of fraud at its HBOS Reading unit.

The report, written in 2013 after the Lloyds manager had taken her concerns to the police, alleges HBOS executives knew of the fraud as early as 2004 and failed to properly disclose it, with far-reaching implications given Lloyds’ takeover of HBOS in 2009.

Related: MPs threaten to publish internal Lloyds report into HBOS Reading fraud

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Source: The Guardian

No surprise who is the clear winner of £1.7bn Virgin Money takeover | Nils Pratley

Deal to create sixth largest UK bank is no game-changer but makes sense to parties involved, especially Richard Branson

Don’t get too excited by the talk from CYBG about creating the UK’s sixth largest bank via the £1.7bn takeover of Virgin Money. The new status needs qualification. First, in terms of lending in the UK, the combination will still be substantially less than half the size of the fifth largest bank. Second, a large building society, Nationwide, also operates in the same market; it has 15 million members versus the 6 million customers under the combined wings of CYBG and Virgin.

The big banks, in other words, are probably not trembling in fear of an earthquake. Remember that Lloyds Banking Group last year quietly forked out a greater sum – £1.9bn – to get bigger in credit cards by buying MBNA’s UK operation and could call its expansion a modest bolt-on.

Related: Clydesdale and Yorkshire bank brands to go in takeover of Virgin Money

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Source: The Guardian

Virgin Money takeover by CBYG to result in 1,500 job losses

£1.7bn deal creates UK’s sixth-largest bank with 6 million customers and 9,500 staff

More than 1,500 jobs, mainly senior management posts, are to be axed in the £1.7bn takeover of Virgin Money by the owner of Clydesdale and Yorkshire banks.

Clydesdale and Yorkshire Bank Group (CYBG) and Virgin Money have agreed to create the UK’s sixth-largest bank, with 6 million personal and small business customers and total lending of £70bn.

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Source: The Guardian

UK debit cards transactions overtake cash for the first time

Consumers used debit cards 13.2bn times in 2017, while the number of cash payments fell 15%

Debit card payments have overtaken cash as the most popular form of payment in the UK for the first time, according to banking industry figures.

Consumers used their debit cards 13.2bn times last year, up 14% compared to 2016, according to a report by UK Finance, the trade body for the UK banking and financial services sector. The number of cash transactions fell by 15% to 13.1bn transactions in the same period.

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Source: The Guardian