Hybrid Finance all the rage
The Financial Times reported on 6 February 2006 that bankers are expecting explosive growth in a new form of securities, so-call hybrid securities. The new securities combine the most advantageous features of debt and equity to reduce companies tax bills and cut their financing costs while bolstering their credit ratings.
The Markets in Financial Instruments Directive (MiFID) is due to be implemented in the Spring of 2007.This Directive is designed to improve price transparency of traded financial instruments while also making it easier to execute trades across borders.
This suite of over forty images deals with the issues associated with the proposed introduction of the revised IAS standards from 1 January 2005. There are many other graphics dealing with Financial Reporting matters.
See Paul Cummins' article on the Uk Financial Reporting Council Strategy for 2005 |
Basel II -Capital Requirements Directive
The Financial Times reported on 15 November 2005 that delays in the implementation of the Basel II Accord ( due in 2008) in the US would, in the view of large European Banks, erode the benefits which the new rules would give(improved risk management by using models based on past performance to help set the amount of capital banks are required to hold by regulators). In the US regulators and politicians are worried about the complexity of the regulations and the potential negative competitive impact on 7000 smaller US banks.
|
|
|
Corporate America moves away from profit forecasting
The Financial Times reported on 13 March 2006 that a concensus is forming amongst chief executives, regulators and analysts against the quarterly ritual that encourages management to pursue narrow, short term targets, in favour of more detail on underlying performance.
The Financial Times on 22 November 2005 reported that the UK regulator has warned the insurance industry that it may force brokers to disclose their commissions to the public if they do not deal adequaitely with conflicts of interest in their industry.
On the 23 November 2005 the same publication reported that the UK FSA has warned that competitive initial public offerings appear to be exacerbating conflicts of interest.The concern is that the process leads to conflicts of interest by forcing the delay in the appointment of investment banks, putting pressure to provide positive analyst research and over-aggressive pricing of deals.
These pictures depict these issues. |
Pensions
Turner Plan gains support
The Financial Times reported on 9 March 2006 that plans for a new low-cost saving scheme to tackle Britain's looming pensions crisis are gathering momentum in spite of objections from pension funds and the insurance industry.
On February 1, the Finacial Times reported a City analyst warmimg that companies are effectively masking the scale of their pensions liabilities by failing to reveal crucial assumptions such as how long they expect their staff to live.
Adair Turner's UK Pension Commission Report ,recently published in late 2005 makes the following key recommendations:
- more generous state pensions
- state pension age to rise from 65 to 67 after 2020, then linked to life expectancy
- individuals automatically enrolled in new savings plan, but given the right to opt out
- aim to resolve pension funding problem with higher taxes, more saving and longer working lives
See Paul Cummins' articles (1) and (2) on pensions |
|
|
