BoE turns up the heat on accountants for banks

The Bank of England (BoE) has turned up the heat on accounting firms used by banks, saying they must provide the central bank with written reports from November 2016 on their audits of Britain's main lenders.

PHOTO: REUTERS

27 Feb7:18 PM

[LONDON] The Bank of England (BoE) has turned up the heat on accounting firms used by banks, saying they must provide the central bank with written reports from November 2016 on their audits of Britain's main lenders.

Policymakers questioned the accuracy of external audits after banks had to be rescued by taxpayers in the 2007-09 financial crisis just months after accounting firms gave them a clean bill of health.

The BoE's Prudential Regulation Authority (PRA), which supervises Britain's banks, published a consultation on Friday on how it will scrutinise the accountants and actuaries hired by banks and use new powers to sanction them.

The move echoes measures being taken inside banks to make individuals more directly accountable for their actions, making it easier to punish rule breaches.

Britain's big banks, such as HSBC, Barclays , Lloyds and RBS, all use one of the"Big Four" accounting firms, PwC, Deloitte, EY and KPMG. "Although engagement between external auditors and the PRA has improved in recent years, the PRA's monitoring of the quality of auditor-supervisor dialogue has shown that there is more that can be done," the PRA said in a statement.

The watchdog is proposing that accountants for the biggest UK headquartered deposit-taking banks provide written reports to the supervisor annually on financial reporting and the accompanying audit. "These written reports will enable the PRA to gain a better understanding of the risks in banks' financial reporting and help supervisors to focus on the key areas of risk," the PRA said.

The aim is to spot problems early before they get out of hand and so action can be taken in a timely way. The new requirement will be introduced in full in relation to audits ending on or after Nov 1, 2016. "Where auditors and actuaries fail to provide us with the information that we need to supervise firms effectively, we now have disciplinary powers which allow us to take action to rectify this," PRA chief executive and BoE deputy governor Andrew Bailey said.

REUTERS

      

China lowers interest rates for the second time in three months

PUBLISHED ON MAR 1, 2015 10:05 AM

BEIJING (BLOOMBERG) - China's central bank cut benchmark interest rates for the second time in three months as disinflation gives room to step up support for the nation's slowing economy.

The one-year deposit rate will be lowered by 25 basis points to 2.5 per cent and the one-year lending rate will also drop by a quarter percentage point to 5.35 per cent on March 1, the Beijing-based People's Bank of China (PBOC) said on its website late Saturday.

The move reflects deepening concern over an economy squeezed by a property slump, tighter controls over local government debt and rising capital outflows. By adding rate cuts to a reduction in the cash banks must set aside as reserves, the PBOC is intensifying its easing measures along with more than a dozen global counterparts this year as plunging commodity prices provide scope to support growth.

"A rate cut was urgently needed," said Wang Tao, the chief China economist at UBS Group AG in Hong Kong, who predicted one or two more reductions this year.

Adam Tepper, founder of Bitcoin exchange company, dies at 34

PUBLISHED ON FEB 28, 2015 11:19 PM

Posed photo of a twenty-five bitcoin. Adam Tepper, founder and chief executive officer of the bitcoin exchange company Independent Reserve, has died after a motorcycle accident in Thailand. -- PHOTO: BLOOMBERG

LONDON (BLOOMBERG) - Adam Tepper, founder and chief executive officer of the bitcoin exchange company Independent Reserve, has died after a motorcycle accident in Thailand. He was 34.

"He lived his life to the beat of his own drum and Independent Reserve is a testament to his vision, intelligence and perseverance," the company's chief technology officer Adrian Przelozny said in a statement.

Prior to Independent Reserve, the Australian-born Tepper founded Asia-Australia Technology, a software engineering company, where he remained managing director, according to his LinkedIn page.

He studied at Swinburne University in Melbourne and was a keen motorsport, camping and sailing enthusiast, according to his biography on the Independent Reserve website.

A funeral service for Tepper, who died on Thursday, will be held in Melbourne on March 6, the company said.

"He will be sorely missed by his family, friends and the bitcoin community," Przelozny said.

3 European banks under FX probe: sources

28 Feb10:56 AM

[WASHINGTON] The New York state financial regulator has subpoenaed three major European banks and a US peer in a probe of foreign-exchange rigging, sources close to the situation told AFP.

The sources, speaking on condition of anonymity, said that the regulator, Benjamin Lawsky, had sought information about currency practices from French banks BNP Paribas and Societe Generale. One of the sources said Credit Suisse and Wall Street bank Goldman Sachs were also targeted.

The subpoenas, served in December to BNP Paribas, Societe Generale, Goldman Sachs and Credit Suisse, ask the banks for documents related to their currency operations, said one of the sources, adding that Lawsky was particularly interested in finding out the specific technologies the banks used.

Mr Lawsky is investigating the use of chat rooms and instant messaging by forex traders to rig the price of currencies on the market.

The four banks are cooperating with Mr Lawsky, the person said.

Societe Generale was not immediately available to comment. Mr Lawsky's office, BNP Paribas and Credit Suisse declined to comment.

The overall currency investigation began two years ago amid suspicion that Wall Street traders manipulated foreign-exchange prices in line with their own interests.

mr Lawsky's ongoing investigation of Barclays in the forex affair is currently holding up an agreement between the British bank and other US and British regulators, the sources said.

Mr Lawsky, who has the authority to revoke a bank's license to operate in New York state, is balking at a global settlement deal sought by Barclays.

In November, six banks moved to close the first phase of the case. They agreed to pay a combined US$4.25 billion in fines to settle with financial regulators in Washington and Britain. The settlement included JPMorgan Chase, Citigroup, Royal Bank of Scotland, UBS and HSBC.

AFP

      

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