Bank of England publishes 2010 Payment Systems Oversight Report

The Bank of England has published its “Payment Systems Oversight Report 2010”. The Oversight Report forms an important element of the Bank’s oversight work and offers public accountability for this statutory function of the Bank, as well as increasing transparency about the performance of the overseen systems and acting as a tool to encourage further risk reduction.

The Oversight Report sets out how the Bank has implemented the statutory regime for oversight under Part 5 of the Banking Act of 2009 and how the Bank carries out its oversight of recognized UK payment systems. In its oversight work the Bank oversees interbank payment systems that are ‘recognized’ by the Treasury. Such “recognition” orders exist for Bacs, CHAPS, CLS, Faster Payments Service, and the embedded payment arrangements within CREST, ICE Clear Europe Ltd and LCH.Clearnet.

To summarise the main UK payment systems have continued to demonstrate high levels of operational availability and developments since the previous Oversight Report have contributed to further reductions in risk. The Oversight Report notes some areas where, in the Bank’s view, further measures to reduce potential systemic risks should be undertaken. These include:

• Tiering - the accession of two new members of CHAPS in 2010 and one new settlement member of CREST in 2009 has helped reduce tiering in these payment systems, but tiering remains a risk in UK payment arrangements and should be reduced.
• Payment arrangements for central counterparties (CCPs) - the two recognized CCPs should consider ways to reduce commercial bank risk in their payment arrangements.
• Default arrangements - Bacs should develop proposals to ensure that settlement can complete in all circumstances in the event of a member default.
• Contingency arrangements - payment systems should ensure they conduct a challenging program of business continuity tests to prove their contingency arrangements.
• Governance - payment systems should ensure that their governance arrangements reflect corporate governance good practice, and provide appropriate strategic guidance and challenge to management.

Fraud - a fake credit card production line

Fraudsters rack up millions of dollars in merchandise using fake credit cards with legitimate numbers hacked off the Internet. Detective Bob Watts of Newport Beach Police Department shows how it's done.

Mobile Banking – A view from the US

A short news item on mobile banking in the US from Consumer Reports Money Adviser. Like having an ATM in your pocket.
And there is a concern too about security.

Quiet a different perspective from that of the developing world.

TRAINING COURSE “REMITTANCES – CREATING VALUE”

Johannesburg – 22 & 23 June 2011

The transfer of migrant’s remittances represents a huge business opportunity for banks and other financial institutions which is still largely overlooked. The financial services industry, which plays such an important role in the Payments Industry, is missing an important opportunity if they ignore a very large component – Remittances.

The flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. The total value of these remittances has been increasing steadily over the past decade and it is estimated that in 2009 the total value worldwide was over US$ 316 billion equivalent, involving some 190 million migrants.

This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

This intensive 2-day course provides an insight of the payment system aspects of remittances, and is designed to assist financial institutions that want to improve their understanding of this important market as well as extend and develop the many business opportunities that present themselves. Processing these money transfers is a business opportunity with vast potential especially with the recent rise of the Mobile Phone is now set revolutionize the Remittance world.

For a fully descriptive brochure please send a blank e-mail to sharon@citadeladvantage.com with REMIT-JHB in the Subject line.


Who Should Attend

The course has been specifically designed for Senior Bankers involved with;

• Payment Systems and Money Transfers
• Payment Strategy 
• Micro Finance 
• International & Correspondent Banking 
• Retail Banking Services 
• Banking Product Development

Central Bankers involved with;

• Payment Systems 
• Payment Strategy & Policy 
• International & Correspondent Banking 
• Payment System Regulation & Oversight

Senior Staff of;

• Corporations who employ migrant workers 
• Money Transfer Operators 
• Government agencies involved in migrant workers

Development Agencies

Course Venue:

REGUS Sandton,
Nelson Mandela Square
West Tower, 2nd Floor, Nelson Mandela Square
Maude St.
Sandown
Johannesburg 2146
Tel: +27 (0) 11 881 5600

TRAINING COURSE “REMITTANCES – CREATING VALUE”

London – 16 & 17 May 2011

The transfer of migrant’s remittances represents a huge business opportunity for banks and other financial institutions which is still largely overlooked. The financial services industry, which plays such an important role in the Payments Industry, is missing an important opportunity if they ignore a very large component – Remittances.

This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

This intensive 2-day course provides an insight of the payment system aspects of remittances, and is designed to assist financial institutions that want to improve their understanding of this important market as well as extend and develop the many business opportunities that present themselves. Processing these money transfers is a business opportunity with vast potential especially with the recent rise of the Mobile Phone is now set revolutionize the Remittance world.

For a fully descriptive brochure please send a blank e-mail to sharon@citadeladvantage.com with REMIT-LONDON in the Subject line.


Who Should Attend
The course has been specifically designed for Senior Bankers involved with;

• Payment Systems and Money Transfers 
• Payment Strategy 
• Micro Finance
• International & Correspondent Banking 
• Retail Banking Services 
• Banking Product Development

Central Bankers involved with;

• Payment Systems 
• Payment Strategy & Policy 
• International & Correspondent Banking 
• Payment System Regulation & Oversight

Senior Staff of;

• Corporations who employ migrant workers
• Money Transfer Operators 
• Government agencies involved in migrant workers

Development Agencies

Course Venue:

REGUS Trafalgar,
1 Northumberland Avenue,
Trafalgar Square,
London WC2N 5BW

Former Goldman Sachs board member charged in insider trading scheme

The Securities and Exchange Commission (SEC) has announced insider trading charges against Rajat K. Gupta a Westport-based business consultant who has served on the boards of directors at Goldman Sachs and Procter & Gamble for illegally tipping Galleon Management founder and hedge fund manager Raj Rajaratnam with inside information about the quarterly earnings at both firms as well as an impending $5 billion investment by Berkshire Hathaway in Goldman.

The SEC’s Division of Enforcement alleges that Gupta, a friend and business associate of Rajaratnam, provided him with confidential information learned during board calls and in other aspects of his duties on the Goldman and P&G boards. Rajaratnam used the inside information to trade on behalf of some of Galleon’s hedge funds, or shared the information with others at his firm who then traded on it ahead of public announcements by the firms. The insider trading by Rajaratnam and others generated more than $18 million in illicit profits and loss avoidance. Gupta was at the time a direct or indirect investor in at least some of these Galleon hedge funds, and had other potentially lucrative business interests with Rajaratnam.

Starbucks mobile payments in action

With all the hype about paying with your mobile, not many people have really seen how very simple the process is.

This short video shows where the world of mobile payments is heading.

Assessing the possible sources of systemic risk from hedge funds

The Financial Services Authority’s (FSA) has just published the results of its latest “Hedge Fund Survey” conducted in September 2010 and the “Hedge Fund as Counterparty Survey” conducted in October 2010.

These two surveys provide a basis to analyze the systemic risk posed by hedge funds and are conducted every six months as part of the FSA’s work in assessing risks to financial stability of the UK financial system from outside the boundary of prudential regulation.

The full report can be downloaded from the FSA website – CLICK HERE

“Retail Conduct Risk Outlook” published by FSA

The UK’s Financial Services Authority (FSA) has published its first Retail Conduct Risk Outlook (RCRO), which examines how a range of current, emerging and potential risks could impact retail customers.

RCRO is a key component in the FSA’s consumer protection strategy to identify risks earlier, proactively intervene earlier in the product chain and prevent consumer disadvantages.

The report’s analysis of current and upcoming risks informs how the FSA will set its priorities and deploy its resources. These will be outlined in the FSA’s Business Plan, due for publication next month.

The RCRO analyses the environment in which the FSA, authorized firms and consumers operate. It assesses the main macroeconomic trends, the changing regulatory landscape, developments in firms and markets, and key issues affecting consumers – and the risks these all pose.

Some of these are issues are current, and are subject to ongoing FSA activity, some are emerging, and others have yet to develop but could cause consumer detriment in the future.

Introducing the new publication, Adair Turner, FSA chairman said:

“The Retail Conduct Risk Outlook is a timely reminder of the consumer protection challenges facing the FSA, its successor bodies and financial firms over the coming years. It analyses how environmental trends may influence how firms treat their customers, and assesses the resulting potential for poor customer outcomes. The RCRO informs our dialogue with firms and consumer representatives on conduct risk and will play an essential part in our work to mitigate the potential risks to customers in the future.”

The Retail Conduct Risk Outlook, together with the Prudential Risk Outlook which will be published in March, replaces the Financial Risk Outlook Series. The Financial Risk Outlook has been published since 2002.

The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.