The Financial Conduct Authority (FCA) is using emergency powers to prevent financial advice firms, who advised members of the British Steel Pension Scheme (BSPS), from disposing of assets to avoid paying compensation. The FCA has introduced these emergency rules, without consultation, in light of the risk that some firms will take steps to get rid of their assets if the rules were consulted on first. The measures will apply from the 27 April 2022. The FCA previously announced proposals for a redress scheme for former BSPS members which the FCA estimates will deliver £71.2 million of redress to consumers who were wrongly advised to transfer their pension.  Continue reading…

The Financial Stability Board (FSB) has recently published a letter from its Chair, Klaas Knot, to G20 Finance Ministers and Central Bank Governors ahead of their meeting. The letter discusses the current outlook for financial stability and sets out the FSB’s plans over the coming months to assess and address emerging vulnerabilities. The letter notes that the Russian invasion of Ukraine triggered large price fluctuations in global financial markets. Continue reading…

by Matthew Verga

As we have noted before, cyberattacks are a growing area of concern, both inside and outside of the legal industry, and “cyberattacks in 2020 were particularly crippling because of how much more legal professionals relied on email and internet-based access to maintain operations.” With so many breaches occurring and so many breach investigations being conducted, it is important to consider the discoverability of reports and other materials generated by those investigations. As two recent cases demonstrate, it can be difficult to satisfy the requirements for work product protection of such reports. Continue reading…

On Friday 29th April 2022, we had the opportunity to talk with David Lewis during the International Risk Congress at the headquarters of Euroclear in Brussels. David Lewis is Managing Director and Global Head of Anti-Money Laundering (AML) advisory Forensic Investigations and Intelligence practice at Kroll UK. David Lewis talked with presenter Dina-Perla Portnaar on how he leverages extensive global experience on a daily basis, helping governments, supervisors and regulated firms to combat money laundering effectively.

According to David Lewis, the biggest risks can be found in the financial capitals, New York and London. He also talked about the unprecedented sanctions against Russia and the problems of finding the assets related to shell companies. Recovering any valuables is very difficult, he said. He also encourages investigative journalism as a very valuable asset in combating Financial Economic Crime. Continue reading…

Fabio Panetta, Member of the Executive Board of the European Central Bank, gave an opening speech at the IESE Business School Banking Initiative Conference on Technology and Finance, Frankfurt am Main on 8 April 2022. Thank you for inviting me to this conference. As it explores the interplay between technology and finance, I have chosen to focus my remarks on retail central bank digital currencies (CBDCs) – in other words, the possibility for everyone to use public money for digital payments. It’s hard to think of a better day to discuss the advances of research in this field. Today would have been the 118th birthday of the great economist Sir John Richard Hicks, who once said that “much of economic theory is pursued for no better reason than its intellectual attraction; it is a good game.” Continue reading…

Italian and Austrian authorities have dismantled a massive fraud scheme set up by a criminal network that used Italian companies to simulate business leases and false tax credits. The perpetrators deprived the Italian authorities of at least EUR 440 million. With the help of Eurojust, approximately 90% of the proceeds have been recovered and 12 suspects have been arrested. Continue reading…

by Elena Pykhova

The three-year priorities published by the European Central Bank1 is a must-read document for risk practitioners. It outlines important areas of focus for the supervisors – and, equally, banks and their risk teams, who should be analysing and leading the organisational thinking by ensuring maximum awareness of the environment, comprehension of its impact and hence enhanced preparedness necessary to withstand the next crisis. In the post-pandemic environment, it is not surprising to see credit risk and market risk high on the regulatory agenda. As it relates to Operational risk, while it is explicitly mentioned only in relation to IT Outsourcing and Cyber resilience, it has in fact multiple touch points and direct correlation with other areas, whether linked to business model, governance or climate and environmental risk.  Continue reading…

The Office of the Prosecutor of the International Criminal Court (ICC) in The Hague will become a participant in the joint investigation team (JIT) on alleged core international crimes committed in Ukraine. The JIT, which was set up with Eurojust support on 25 March by Lithuania, Poland and Ukraine, aims to facilitate investigations and prosecutions in the concerned states as well as those that could be taken forward before the ICC.  Continue reading…

The Financial Stability Board (FSB) has on April 26th published a report on the interaction between US dollar funding and external vulnerabilities in emerging market economies (EMEs). The report has been prepared in collaboration with the IMF and forms part of the FSB’s work programme on non-bank financial intermediation. The report proposes policy measures to address EME vulnerabilities arising from foreign currency borrowing. These include measures to tackle the build-up of foreign exchange mismatches; enhance crisis management tools; and address data gaps to facilitate risk monitoring and the timely adoption of policies. The report also stresses the importance of ongoing work to address vulnerabilities from liquidity mismatches in open-ended funds, which would also help bolster the resilience of EMEs’ financial systems. Continue reading…