Browsing "Breaking News"
It must be a perpetual nightmare being an RBS / NatWest customer. The banking group suffered its fourth technical glitch in 18 months last night, leaving customers unable to access their cash or make electronic payments.
Worse still, the glitch took place on Cyber Monday, one of the busiest shopping days of the year, when retailers launch seasonal bargains on a first-come, first-served basis. It’s not the day when customers of a major bank expect to be left hanging.
The bank has issued its usual apology and promised to compensate customers who end up ‘out of pocket’ as a result of the glitch. But that’s hardly the point, when it’s had so many warnings.
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If you’ve seen Die Hard 4.0, you’ll remember the ‘fire sale’ carried out by Timothy Olyphant’s cyberterrorist gang – a series of attacks designed to fracture the country’s digital infrastructure. Now, Britain’s banks are being urged to improve their security systems in a bid to counter increasingly sophisticated attacks from cyber criminals. And consumers are being advised to watch their own backs as well.
The Treasury has been expressing concerns at the growing threat from cyber attacks and the need for financial insitutions to fortify their defences. Along with the Bank of England, the City Regulator and government agencies, the Treasury is concerned that advances in cyber crime could lead to banks being targeted, which would have severe knock-on effects.
The “high degree of interconnectedness” within the financial system left it particularly vulnerable, the Financial Policy Committee added. Leaders of major institutions must ensure that “a concrete plan” is in place to protect against cyber attacks, it proposed.
Directors have now been given six months to submit plans that show how their institution’s security systems will be improved. The Bank of England must also analyse its own systems as part of the initiative.
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Joe Cox of GE Capital Direct offers a considered response to recent changes in regulations that allow AIM shares to be included within investment ISA allowances.
On August 5th the Government relaxed the rules on AIM shares in investment ISAs, to the satisfaction of some and the consternation of others.
Reasons abound as to why opening ISAs up to the alternative investment market (AIM) is a good thing for investors. Chief amongst them is opportunity for a double tax break.
In the 2013/14 tax year the ISA allowance is £11,520, all of which can be put into an investment ISA, which will attract no capital gains tax and incur a lower tax rate on dividends. Most AIM shares fall outside the scope of ‘business property relief’, which means they don’t attract any inheritance tax, giving investors a second tax break.
The advocates of AIM also see a macroeconomic benefit from opening up ISAs to smaller companies like those listed on AIM, benefiting small cash strapped businesses that are the engine of national economic growth.
“The government has tried to push banks to lend to small companies but it has now woken up to the fact that there is a vigorous equity market [in the UK] that is looking to invest in these businesses,” says Gavin Oldham, chief executive of The Share Centre, who has been campaigning for the change for 12 years.
And he may yet be proven right. According to Pensions and Savings provider Sippdeal, since the restrictions on AIM shares were lifted on August 5th a quarter of all purchases by stocks and shares ISA savers last month were for shares listed on the alternative investment market. That’s a lot of money being invested into these small companies.
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Train fares are set to rise by another 4% in the New Year, heaping yet more pressure upon struggling commuters.
- Rail fares to rise by 4.1% in the New Year.
- Fares rising at three times the rate of wages.
- Network Rail agrees new bonus deal with executives worth £11 million.
- Taxpayer-supported firm still faces £75 million fine for poor performance.
Companies are allowed to set their January fare increases to one percent above the Retail Price Index (RPI) measure of inflation in July, which was revealed today to be 3.1%. It’s better than last year’s ghastly 5.2%, but that’s hardly any consolation.
Putting this into stark perspective: if the 4% increase goes ahead, it will amount to a 40% rise in train fares since 2008, according to the TUC – around three times the increase in wages over this period (which, we’ve learnt this week, have suffered more in real terms since mid-2010 than either Spain or Cyprus).
The Association of Train Operating Companies (ATOC) and the government have both been quick to defend the rises with their usual rhetoric. It’s “unfortunate”, they say, but “necessary” for vital “investment” in the railways.
But both are in complete denial about the degree to which the various pockets of the rail network are leeching from the system to widen the grins on executives’ faces.
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From rescuing savers to defending its chairmen, it’s been a true baptism of fire for the new “twin-peak” system of regulation that assumed control from the Financial Services Authority at the beginning of this month.
In little more than a week, the Prudential Regulation Authority, tasked with maintaining financial stability, and the Financial Conduct Authority, the new City watchdog, have already been rescuing savers from the fallout of a banking collapse and opening investigations into catastrophic affairs from last summer – a clear signal of intent about the level of intervention that the dual operation will undertake.
But with the chief executive and chairman of the Financial Conduct Authority already coming under attack for separate reasons, it could be a rocky road ahead for the new regulator to establish its credibility and justify its extra cost to the institutions that fund it.
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A round-up of the main news stories from this week.
Bank of Ireland Mortgage Hike Faces Probe
Regulators have been asked to review a shock decision by the Bank of Ireland to hike its tracker mortgage rates to well over double their current levels. Over 13,000 customers with the bank are expecting to see their mortgage rates rise from the current level of 1.75% to 2.5% in May and 4% in October. Treasury Committee chairman Andrew Tyrie has asked the Financial Services Authority whether it plans to investigate the bank on suspicion of mis-selling practices.
Building Societies Call For Improvement to ISAs
The Building Societies Association has joined calls for the Government to improve conditions for savers. The BSA believes that savers should be paying less tax on returns from savings accounts while rates are so low. It also wants rules regarding cash ISAs to be simplified so that savers can invest their entire annual tax-free allowance in cash, rather than just half as it is currently.
Osborne Accused of Contempt Over Bank Reforms
Chancellor George Osborne has been accused of showing contempt for Parliament after he failed to attend a debate on key reforms for the safety of the banking sector. The cross-party Banking Standards Committee, which has been gathering data over recent months, has accused the chancellor to trying to force through a watered down version of his banking reform bill without waiting for its detailed recommendations. The most significant change it has proposed is the option to break up big banks if they attempt to get around the ring-fence between retail and investment banks.
Channel Islands Targeted for Tax Clampdown
The Channel Islands have become the latest target for the UK tax authorities as the clampdown on tax dodging extends to nearby off-shore havens. A deal has been reached to unseat Guernsey and the Isle of Man as the prime destinations for lower taxes. Guernsey is thought to hold £4 billion across thousands of bank accounts. The deal follows an arrangement with Swiss authorities to reclaim £5 billion in tax from secret bank accounts held by UK nationals.
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