Is this how the West ends? Indifferent? When even hanging on in quiet desperation is too much effort? Tomorrow the UK government will try to get the Brexit withdrawal agreement approved by Parliament. UK Labour leader Jeremy Corbyn is making noises about a no confidence vote leading to an election and then on to a second referendum. The issue of reconciling trade agreements and maintaining open borders has sunk the British attempt to exit the European Union. Now the best that Theresa May can manage is to show her MPs some non-binding letters of assurance from Jean-Claude Juncker, who appears unmoved at the UK's imminent departure. But sympathy is in short supply. Reporters are finding that UK voters are now actively annoyed by the whole Brexit saga, and just want it to be over. Visiting a BMW plant in the UK Midlands, Guardian reporter John Harris notes that "questions about Brexit being met with an exasperated indifference, as if it were something in which people are barely interested." (The Guardian story ends with a quote from Pink Floyd's Time: 'Hanging on in quiet desperation is the English way.')
Meanwhile, among the sticking points in trade negotiations between China and the US is the question of allowing Visa and Mastercard to process renminbi-denominated cards in China. (Currently they work with international cards for Chinese banks.) According to insiders quoted by the FT, China has not only failed to issue domestic licences to Visa and Mastercard — as required by a WTO ruling from 2012 — but the People's Bank of China has not even acknowledged receipt of the applications more than a year after they were made. In the intervening years, China UnionPay has grown to more than a third of the global payments cards market, ahead of Visa or Mastercard. Last year Amex won approval to operate in China but in a joint venture with a local business. Of course, the US has lately been minded to block Chinese acquisitions such as Alipay's thwarted attempt for Moneygram, along with the latest rumblings about Huawei.
Fintech firms are chomping at the bit to get access to the US Federal Reserve's toolbox of payments and settlement services as the Fed considers what access to offer to non-banks in order to drive competition in the finance business. "Many Fed officials fear these firms lack robust risk-management controls and consumer protections that banks have in place," writes Reuters, leading us to wonder what the Fed is thinking at all. Fearing that fintechs could cause the next crisis seems wildly improbable, considering the lack of actual bank reform that has happened in the last decade. "They probably do want access to the payments system, but they don't want the regulation that would come with that access," St. Louis Fed President James Bullard told Reuters in November. "I am concerned that fintech will be the source of the next crisis," he added. Not a million miles different than the Chinese after all then, eh?
Subscribe to the Lafferty Daily BriefingSIGN UP
© 1981-2019 Lafferty Group
Toll-free: +44(0) 800 772 3849
83 Victoria Street