It's a sad reality that the poorest people pay the most for basic services such as banking. Indeed, one of the things promised by chippy neobanks is that they won't make their money by whacking you with big charges for things such as overdrafts and late fees. The UK's Financial Conduct Authority said that UK banks are causing "significant harm" to their poorest customers as it implements a new ban. "The Financial Conduct Authority (FCA) said it would stop the practice of high street banks imposing higher penalties for unarranged overdrafts than for agreed overdrafts, among a number of new rules announced on Friday," reports the Guardian. "Fees for unarranged overdrafts are more than 10 times higher in some cases than those charged by payday lenders, the FCA said." Let's see how this hits the bottom line of banks.
It's only a matter of time before China breaks the US duopoly on operating systems for mobiles, which is currently dominated by Google's Android and Apple's iOS. Commercial tariffs being imposed on Huawei for what the US says is national security reasons mean that Google is now cut off from updating the OS on Huawei phones. Google is now warning the US about the national security implications of this move, though it's long been clear that Google and the US security services are nor exactly operating at arm's length. "Google argues a Huawei-modified version of Android would be more susceptible to being hacked, according to people briefed on its lobbying efforts. Huawei has said it would be able to develop its own operating system 'very quickly'. One person with knowledge of the conversations said: "Google has been arguing that by stopping it from dealing with Huawei, the US risks creating two kinds of Android operating system: the genuine version and a hybrid one. The hybrid one is likely to have more bugs in it than the Google one, and so could put Huawei phones more at risk of being hacked, not least by China'." With a growing market in Africa for Chinese smartphones, why not a Chinese OS, if not an African OS?
Raving diplomat John Bolton is back in power under Donald Trump and is trying to take down the perceived enemies of the US, including Venezuela, which inconveniently holds the world's largest petroleum reserves and may also hold some of the largest gold mines in the world, which it is beginning to develop with Chinese assistance. But Venezuela is financially over-extended and sanctions are biting hard, forcing Venezuela to liquidate much of its gold supply. Back in January, the Bank of England refused to release gold held by Venezuela in the bank's vaults, with suspicion falling on pressure from the UK and the US despite the nominal independence of the bank. Bloomberg reported at the time that pressure from John Bolton was suspected of swaying the Bank of England. Now Venezuela has lost more of that gold after defaulting on a gold swap arrangement. "Between 2014 and 2016 the central bank (BCV) used a portion of its foreign gold reserves to guarantee financial operations with banks to boost liquidity, with the intention of repaying the loans to avoid losing the gold," reports Reuters. "Five sources with knowledge of the deals said the BCV had agreed with Citibank and Deutsche Bank to buy back the gold in 2020 and 2021, but since the U.S. government imposed sanctions on the BCV in April the banks had invoked a condition of the contracts to retain ownership of the bars."
McKinsey writes that investment banks are more likely to adopt blockchain-based technologies than retail banks. "Headwinds for retail lenders to adopt a shared system of distributed computer ledgers to manage day-to-day activities include a tougher regulatory environment for consumer finance and the success of existing alternative payment services such as Zelle, Matt Higginson, one of the authors of the report, said in an interview," reports Bloomberg. "The poor reputation of cryptocurrencies such as Bitcoin, which use blockchains to track and validate transactions, has also made the 'retail banking sector nervous and cautious,' he said." While the report acknowledges that blockchain may have some applications in remittances, the idea that the poor reputation of bitcoin is frightening banks misses the point. Read it for yourself here.
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