Blog: Bank Groups Worry ESG Proposals Are ‘Anything But Neutral’ – Law360

By Jon Hill (June 24, 2022, 7:50 PM EDT) — A coalition of national and state banker groups is pushing back on efforts by Biden administration financial regulators to develop climate risk guidance and other ESG-minded rules, warning of potentially “acute, widespread and anything but neutral” effects, and consequences for banks’ ability to serve customers.

In a Thursday letter, the American Bankers Association teamed up with bank trade associations from all 50 states and Puerto Rico to tell top federal financial regulators that banks should be free to make their own lending and investment decisions without having to bow to “unrelated policy preferences.”

“Policymakers play an important role in addressing national…

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Blog: 5 Best Practices for Payables, Receivables Digitization – PYMNTS.com

Most chief financial officers (CFOs) in three key vertical markets — real estate, wholesale trade and industrial/ manufacturing — are digitizing their accounts receivable (AR) and accounts payable (AP) systems if they have not already done so. 

That’s one of the findings of “The Strategic Role of the CFO,” a PYMNTS and Versapay collaboration based on a survey of 400 finance department leaders in those three industries. 

Get the report: The Strategic Role of the CFO 

Most respondents undertaking digitization of their AR/AP systems regard digitization as an opportunity to transform their businesses. They are digitizing as many AR/AP functions as possible to boost the overall lifetime value of customers. 

At the same time, CFOs for companies in these three industries have identified obstacles in digitizing their AR/AP operations — chief among them being a shortage of skilled staff and finding the right technology supplier. 

Following Best Practices 

To help CFOs overcome these obstacles, the report suggests a “C-Suite Checklist,” by answering questions about five best practices to consider on the path to AR/AP digitization: 

  • Have you cataloged customer information to integrate with your accounts receivable systems? 
  • Have you prepared clients for making automated payments on invoices from your business? 
  • Have you established how your workflows will change once the accounts receivable and accounts payable systems are digitized and how that will affect customers? 
  • Have you instituted new policies and procedures for your payments staff to reflect the new workflows? 
  • Have you trained employees on the conversion from manual to digitized systems? 

Doing Business in the Digital Way Preferred by Customers 

Digitizing AR/AP functions and payments processes has proven to be an intense focus for many companies, including those in the real estate, wholesale trade and industrial/manufacturing industries. 

CFOs realize that it’s time to leave manual, paper-intensive AR/AP services behind and do business in the digital way preferred by the customer, Versapay CEO Craig O’Neill told PYMNTS in an October interview. 

Read more: Going Digital is ‘Harder than Checks’ But Essential for CFOs 

According to O’Neill, CFOs have no choice but to adapt to today’s world, allowing their customers to pay how they want to pay. 

“If you can find a way to connect with your customer, make it easy and flexible for them and deploy technology that supports that, you can really get outsized results,” O’Neill said. 

PYMNTS’ research found that many CFOs have used a push toward AR/AP digitization as an opportunity to make critical operational interactions with their customers more efficient, ultimately improving those relationships while also improving cash flow. 

These changes make it clear that many businesses view the payments technology they implemented as a key building block to developing and sustaining more cooperative and collaborative relationships with customers. 

Blog: Corporate governance and audit reform – watered down or pragmatic? – Financial News

Jim Oulton and Tim Shepherd are partners in the litigation and dispute resolution department of Mayer Brown International where they specialise in professional liability and professional regulatory disputes

The government’s plan to overhaul corporate governance and audit in the UK has its roots in corporate collapses including Carillion, Thomas Cook and BHS, and much-publicised criticism of the effectiveness of the audit process in preventing fraud and corporate collapse.

A key…

Blog: US Comptroller Takes a Victory Lap on Crypto – PYMNTS.com

It wasn’t exactly an “I told you so,” but Comptroller of the Currency Michael Hsu didn’t mince words either when discussing crypto’s place in the Semiannual Risk Prospective report released Thursday (June 23).

With a stablecoin’s $48 billion collapse last month, Hsu said: “There are some vulnerabilities and risks in that space that do warrant a cautious and careful approach,” which is a fairly sizable understatement.

“It kind of reinforced where we’ve been this whole time,” Hsu added, referring to a warning letter he issued shortly after taking over the Office of the Comptroller of the Currency (OCC) that essentially reversed his predecessor’s attempts to push the banking industry to get more involved with crypto.

Former OCC head Brian Brooks, who came to the agency from his position as general counsel of crypto exchange Coinbase, had issued a trio of interpretive letters that allowed banks to custody cryptocurrencies for customers, hold stablecoin reserve funds backing their dollar peg, and most importantly allowed banks to use stablecoins for payments.

At the time, Jeremy Allaire, CEO of USDC stablecoin issuer Circle, said the latter ruling “paves the way for the use of leading dollar digital currencies such as USDC as a mainstream payment medium for all forms of payments and settlement.”

See also: Comptroller of the Currency Backpedals on Rulings Allowing Banks to Handle Crypto

That was right up until Hsu took over.

Citing the “novel risks” of crypto assets, a Nov. 23 interpretive letter warned that “banks must be able to demonstrate that they have appropriate risk management systems and controls in place to conduct them safely.”

Beyond that, they had to get the OCC’s approval of those systems and controls ahead of time. The risk report essentially repeated all that.

What the OCC left unsaid: Good luck with that.

Power Play

Hsu hasn’t had any problems with the conclusions of the President’s Working Group (PWG) on Financial Markets report on stablecoins, which recommended that they only be issued by federally licensed, FDIC insured banks.

Hsu said in January that a then-hypothetical “stablecoin run would not just impact those directly invested in it. There would be collateral damage.”

The best way to mitigate those risks is bank regulation, which “would give credibility to the ‘stable’ part of stablecoins,” Hsu said. It would give investors confidence that even during a crisis, “the reserves would be there, overseen and examined by bank supervisors, and potentially even backstopped” by the Federal Reserve.

The collapse of the terraUSD stablecoin and its partner token, LUNA — which the algorithmic stablecoin used in an arbitrage-based method of maintaining its peg — probably strengthened Hsu’s hand, at least in terms of ensuring the PWG recommendations make it into the final proposal for a comprehensive regulatory framework for cryptocurrencies that government agencies are due to present the president in September.

The collapse also probably weakened the hand of members of Congress in both parties who would like to see state regulators able to oversee stablecoin issuers as well.

By the same token, it could also prove to be a double-edged sword for Hsu.

TerraUSD not only showed the danger and speed of a stablecoin run. It also highlighted just how big a commitment the government would be taking on if stablecoins came with $250,000 FDIC insurance.

“I certainly think this has given pause to a lot of people to linking this to the FDIC insurance fund,” said Nathan Dean, a Bloomberg Intelligence analyst.

After all, a stablecoin failure here, a run there, and pretty soon you’re talking about real money.

Other OCC officials on the call said that watching the meltdown of the algorithmic stablecoin and other industry troubles has taught regulators a lot about crypto — especially the confusing use of language in this space. When it comes to the custody of customer funds, the OCC has noted exchanges trying to explain themselves on what custody means for them, which is very different from what it means for banking. They added that industry disclosures continue to be a concern, because customers may not understand what they’re getting into.

Hsu hasn’t come out against stablecoins, he said in early April, noting that they were too big to ignore. Along with ensuring stability, one of his top concerns was ensuring they are interoperable with each other.

Read more: OCC’s Comptroller Wants Stablecoins to Be Interoperable With US CBDC

Noting that runs are destructive like hurricanes in that they do not discriminate “between those who deserve to bear losses and those who are innocent,” he pointed out that this was particularly true of shadow banks in 2008.

Fortunately, he said, there is an effective tool to mitigate those risks: Bank regulation, which Hsu said would boost investors’ confidence.

That’s when Hsu worked his back innovations, arguing that “regulating stablecoin issuers as banks could also enable more innovation in crypto and make those innovations more durable.”

He added, “While innovation thrives in uncertain environments, solid foundations can help, especially when it comes to money and trust.”

Sign up here for daily updates on all of PYMNTS’ Crypto coverage.

Blog: Gensler appeals for ‘one rule book’ in negotiations with CFTC over crypto regulation – Cointelegraph

United States Securities and Exchange Commission (SEC) chair Gary Gensler is in talks with Commodity Futures Trading Commission (CFTC) officials on a “memorandum of understanding” on the regulation of digital assets. Together, the agencies can assure market integrity, Gensler told The Financial Times in an interview published Thursday. “I’m talking about one rule book on the exchange that protects all trading regardless of the pair — [be it] a security token versus security token, security token versus commodity token, commodity token versus commodity token,” Gensler told the newspaper. 

Gensler’s desire to be collaborative comes as a variety of legislative initiatives have been introduced to create a more comprehensive regulatory framework for digital assets. The Digital Commodity Exchange Act, introduced in its latest form in April, and the Responsible Financial Innovation Act, introduced in June, both gave the CFTC greater authority over the market.

Debbie Stabenow, chairman of the Senate Agriculture Committee, which has oversight of the CFTC, and the committee’s ranking member John Boozman are reportedly also drafting a crypto regulation bill, which is expected to expand CFTC powers. Gensler, who headed the CFTC from 2009 to 2013, has expressed skepticism about changes in the status quo.

The SEC has taken the lead in crypto regulation so far, but frequently to the dissatisfaction of the industry and lawmakers who are critical of its methods of allegedly regulating through enforcement. Crypto industry leaders have explicitly asked for clearer regulation, and SEC commissioner Hester Peirce has pressed for policy changes from within the commission.

Related: Bringing crypto market ‘into the light’ doesn’t address enforcement: CFTC chair

Regulation is not a question of authority alone. The Financial Times cites blockchain analytics company Elliptic as saying U.S. regulators have collected $3.35 billion through enforcement actions in the crypto industry over the years, with over 70% of that sum going to the SEC.

Blog: The Great Convergence – what financial institutions can do to get ahead – Yahoo Canada Finance

TORONTO, June 24, 2022 /CNW/ – We are on the cusp of a few once-in-a-generation changes that are creating a ripple effect spanning many aspects of peoples’ lives, with financial services at the centre of the ripple. What financial services industry observers are now calling “the great convergence” is characterized by four forces driving monumental change.

The Great Convergence - what financial institutions can do to get ahead (CNW Group/EY (Ernst & Young))The Great Convergence - what financial institutions can do to get ahead (CNW Group/EY (Ernst & Young))
The Great Convergence – what financial institutions can do to get ahead (CNW Group/EY (Ernst & Young))

1. Portable identity or self-sovereign digital identity: From provincial to federal rollouts to vaccine passports and everything in between, self-sovereign identity and personal data management mean individuals — and businesses — will have greater control over their identity. Ecosystem players — such as banks, insurance companies, utilities and government agencies — will now have more clearly defined roles spanning everything from who can issue identity attributes to who attests those attributes and holds control of the identity. Identity holders, such as individuals and businesses, will become more accountable for understanding and managing their own risk. Meanwhile, identity platforms — strategies being pursued by Big Tech — will ultimately transform into powerful relationship anchors for a nexus of services; something financial institutions must consider given the high-level trust they enjoy today.

2. Portable data: Legislation and regulation — including Bill C11, Bill 64 in Québec, open banking regulation and open data regulation — will very soon significantly enhance the portability of customer data of all types. This enhanced portability of customer data will eliminate a critical anchor currently tying customers to their existing service providers. As a result, the consequences of poor customer service experiences will be more punishing than ever before, since it will be far simpler and quick for customers to move to a competitor than it is today. Service organizations need to rethink customer retention and engagement strategies accordingly and develop new value propositions to enhance customer “stickiness.”

3. Richer, faster payments: In Canada, ISO 20022 standards open up the possibility of payments and data to operate on a single rail. This could eliminate significant operational inefficiencies by integrating payments and settlements into a single transaction and creating opportunities to develop innovative propositions for retail and commercial customers.

4. Central bank digital currencies (CBDC): A complete game changer for payments, CBDCs will significantly redefine the need for financial settlement and transfer intermediaries. Whether we’re talking about low-value or high-value payments, eliminating the need for trusted, third-party go-betweens will change business models for current industry players, thereby significantly impacting payment-related direct revenues such as fees, commissions and floats. It could also affect indirect revenues associated with cash management service offerings. Companies in the payments business are already starting to redefine their role and value proposition in a CBDC world, moving closer to banking or shadow banking business models.

Taken together, these forces represent a total disruption to the very core of how financial services have traditionally operated by fundamentally redefining the relationship between people, organizations and the market. As the opportunity to continue to monetize their role as intermediaries dramatically shrinks or disappears, financial institutions that sit between consumers and payment providers will need to re-evaluate their purpose to stay relevant, and in doing so begin to build business models specifically for this changed reality. The real question is: how?

Organizations can begin developing a holistic vision for the future by considering the impacts of these changes and looking at business models, value propositions and offerings through the lens of a digital native. It’s important to start that proactive dialogue now to understand the current state and design a meaningful future state. Framing that conversation around the why, what and where of this significant disruption is a strong way to start:

1. Gain a deep and specific understanding of what these forces will change in your context. What does digital identity really mean and what role will your organization play when people have more control over their own identity? Disconnects between what was required before and what will be necessary next can hold organizations back. As outdated tools and resources lose relevance — think paper passports in an increasingly digital world — identify where your organization can offer the greatest value for customers and consumers in a Web 3.0 environment.

2. Rethink your business’s “why.” Begin by fundamentally reassessing the social and economic purpose your organization serves. Will that purpose be as needed or essential in the future? Alignment between an organization’s purpose and market need is absolutely critical for ongoing business growth and prosperity, so the very first step every financial institution should do in facing these forces of disruption is to re-examine its customer offerings today to determine whether they will continue to be valuable to their customers tomorrow.

3. Define where your best opportunities lie for developing new value propositions for your customers and your people. Which business streams and revenue models could serve you best in this new world? Chances are, many of the capabilities, skills and resources you already have can be channeled into a refreshed and diversified future version of your organization. From fraud management to data aggregation to open banking: consider which existing resources or practice groups could be put to better and higher use in a digital world. Employ those areas and skillsets as your springboard to new — and relevant — value creation.

What’s the bottom line?

Incremental change is one thing, monumental change is quite another. Standing alone, these four forces of change present a series of individual challenges and opportunities for incumbent financial institutions. However, considered together they should create the foundation of a completely new financial services model that will emerge in the years ahead. As a result, getting ahead of the “great convergence” should pay substantial dividends to those financial institutions with the foresight to rethink their current business models before emergent market forces render those models far less attractive or possibly obsolete.

About EY

EY exists to build a better working world, helping create long-term value for clients, people and society and build trust in the capital markets. Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate. Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws.

For more information about our organization, please visit ey.com. Follow us on Twitter @EYCanada.

This news release has been issued by Ernst & Young LLP.

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EY logo (CNW Group/EY (Ernst & Young))

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Blog: Boris Johnson sees ‘muted’ reaction to rewriting Brexit deal – Reuters UK

British Prime Minister Boris Johnson speaks at a news conference during the Commonwealth Heads of Government Meeting (CHOGM) at Lemigo Hotel, in Kigali, Rwanda June 24, 2022. Dan Kitwood/Pool via REUTERS/Pool via REUTERS

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KIGALI, June 24 (Reuters) – British Prime Minister Boris Johnson said the reaction to his government’s plan to scrap some trade rules governing post-Brexit trade in Northern Ireland has been “muted” and denied the move was an attempt to appeal to his lawmakers.

Britain published plans this month to unilaterally stop some checks on goods moving to Northern Ireland from the rest of the United Kingdom and challenged the role played by the European Union’s court in a new clash with Brussels.

The European Commission in response launched two new legal proceedings against Britain and some of the bloc’s officials have warned it could launch a trade war.

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Johnson pointed to the breakdown of a power-sharing administration in Northern Ireland as a reason for drafting the legislation, the first step in what could be a months-long process before the bill becomes law.

The Democratic Unionist Party has said it will only move to restore Northern Ireland’s regional parliament if the law is passed and complained the checks on goods are too onerous for businesses.

“Generally speaking, I think it’s quite interesting that the reaction around the table amongst our friends has been much more muted than I think people were expecting,” Johnson told reporters on the way to Rwanda where he is attending a Commonwealth summit.

“That’s because, you know, in the end, we don’t want to fall out over this. We want a solution.”

The new legislation is designed to simplify the rules but has drawn sharp criticism in Brussels and Washington where it is seen by many as an inflammatory move that violates an international treaty.

European Commission vice-president Maros Sefcovic said last week the legislation appeared to be driven by Johnson’s attempt to win support with his lawmakers after he narrowly won a confidence vote this month.

“No, no, no, do you really think so? Do you really think that most Conservative MPs or most people in the country are thinking about this problem? They’re not,” Johnson said.

“This is an issue that is entirely to do with the balance of the political situation in Northern Ireland. And we have to respect that.”

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Reporting by Andrew MacAskill; Editing by Nick Macfie

Our Standards: The Thomson Reuters Trust Principles.

Blog: When will the Remoaners finally admit that Brexit is working? asks CAROLE MALONE – Express

Remoaner

When will the anti-Brexit brigade stop blaming everything on Brexit? (Image: Getty)

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It is what they want you to think. It is what they will spend their entire lives trying to make you think.

Because, in their pea brains, the bloated, unelected, protectionist mob in Brussels are our true leaders.

Never mind that most Europeans think the bloc will fall apart in 20 years. Never mind that Covid has shown many EU countries the bloc prevents them from looking after their own national interests.

Of course, global inflation, the war in Ukraine and the current cost of living crisis are a gift for Remoaners. “Look what’s happening,” they gloat. “It’s because of Brexit.”

And they are being aided in that nonsensical assertion by panicking airline bosses who are screaming that the current chaos is “all down to Brexit,” when its 100 per cent down to their own incompetence for sacking tens of thousands of staff during Covid (whilst trousering millions from Government) and failing to re-hire quickly enough (because they are offering crap money).

But Brexit IS working – even the former Chief Brexit negotiator Lord Frost says it is, despite the EU’s best efforts to try to wreck it.

With the war in Ukraine and the pandemic, he says it is hard to see what, if any, changes in trade are down to Brexit.

But that is not good enough for Remainers who, in tandem with our pro-Brussels Establishment, are forever shouting that everything bad in Britain is down to Brexit. They have to paint it as a disaster so they can try to reverse it.

But let us compare the growth of our economy since 2016 to the first quarter of 2022 with Europe’s Big Four using IMF data: UK, 6.8%; France, 6.2%; Germany, 5.5%; Italy, 2.1%; and Spain, 5%.

Not bad for the pathetic little country our unpatriotic Remainers would have you believe Britain now is.

Yes, world events have prevented us from moving as quickly as we should have done to capitalise on Brexit but we HAVE done scores of trade deals and more are in the pipeline.

And remember, while the EU faffed about during the pandemic, WE rolled out a lifesaving vaccine programme.

And Brussels’ response to that was to try to restrict vaccines coming into this country – which could ultimately have killed people.

While the EU dithered over what to do about Ukraine – we were already in there helping. Again, the EU followed us.

And after we took back our sovereignty, last week we saw even that being interfered with by a European court in Strasbourg, where an anonymous judge overturned an order to deport migrants to Rwanda even though British courts had ruled the order was lawful.

Hell, even Prince Charles seems to be getting in on “Sabotage Brexit” by calling the Rwanda plan “appalling” – pretty damned insulting to the Rwandan people who he is currently visiting as future head of the Commonwealth.

So, what is HIS plan to beat the traffickers and stop those deadly migrant crossings?

Oh, hang on, he has not got one, and Boris was right to rebuke him for his (and others) “condescending attitudes” about a totally revitalised country which is now being called the “Singapore of Africa.”

For months Boris has been under the cosh over Partygate which has allowed Remainers to crawl out of the woodwork and re-start their campaign to drag us back into the EU.

But Boris has to stop that. His still substantial majority was won on the back of Brexit and he must start maximising its potential and shouting about it from the rooftops.

He cannot allow EU cheerleaders to wrongly paint it as a disaster in order to reverse it. If he does, THAT is will do it for him… not Partygate.

A rare hero standing up to the activist mob

If there was an Olympic gold medal for guts, Sharron Davies would have one.

Despite a vile torrent of death threats and abuse from trans activists she was one of a brave cabal of women who stuck their heads above the parapet and campaigned to have transwomen banned from women’s swimming.

Now the sport’s governing body, FINA, has done it.

In this woke new world in which we live, gutsy people like Sharron – who put fairness and the greater good above fear of personal attack – are rare. But thank God for them.

Trigger warning wallies

The University of East Anglia has issued a so-called trigger warning to students about Saint George slaying the dragon. They were told that the story contains “descriptions of torture and violence”.

Who is going to tell the wokey little snowflakes that dragons do not exist and what they are frightened of is a fairy story?

Tory royal rumble

At the Tories’ Summer Party this week, one unnamed donor forked out £120,000 to have dinner with Theresa May, Boris Johnson and David Cameron.

As all three hate each other, I would have paid just to sit at the next table in case one of them threw a punch.

GPs will never be satisfied

Another week, another story about whingeing GPs. This week the Royal College of GPs polled 1,400 of its members and 42 per cent said they would be quitting in the next five years.

What is wrong with them? Six out of ten GPs already work just three days a week and, unlike a couple of decades ago, they can choose not to work evenings or weekends.

They earn between £90,000 and £150,000 a year (some even more).

Yes, of course they are busy and I have no doubt the job is stressful, but so are the jobs of millions of other people who earn a lot less AND work weekends.

What did these doctors expect when they went into the business of saving lives… a relaxing, stress-free nine to five existence?

Fergie’s funeral fail

Fergie has had a lot of therapy down the years and it is a wonder none of her therapists have taught her the value of stillness. Especially when it comes to her face.

This week she was at a memorial for the Queen’s cousin Lady Elizabeth Anson but, on seeing a camera, her facial expression morphed into that of a clown who had just caught a glimpse of his best mate Coco across the circus ring and was saying an exaggerated Hello.

Not a good look at a memorial service.

Fergie

Malone was not impressed by the Duchess of York (Image: David M. Bennet/Getty)

One rule for them and another for us

How in God’s name did EastEnders’ Jessie Wallace get just a slap on the wrist for kneeing a policeman in the privates?

The copper, who was trying to arrest the drunken soap star fell to his knees in agony.

Had you or me done that we would have been charged and thrown in a cell overnight to calm down.

But Wallace was let off with a “conditional caution”. Really? Is that all assaulting a police officer is worth? Or is there one rule for TV stars and another for the rest of us?

Jessie Wallace has twice been suspended from EastEnders for her behaviour. Now aged 50 she is still brawling and screaming in the street.

As for gutless EastEnders bosses – well they have copped out too. Their “star” is back on set earning her big fat salary because they clearly think ratings are more important than thuggish behaviour.

Another big pay day for Jerry Hall

Rupert Murdoch, 91, and Jerry Hall, 65, have reportedly split after just six years of marriage. Well, who would have thought THAT would not work out?

Still, I am sure Jerry will recover. She walked away with a multi-million pound settlement after her 22-year relationship with Mick Jagger.

Now with a £14billion fortune, I am sure Rupe, as she calls him, will ensure Jerry has a happy retirement in gratitude for his heady years with the long-legged supermodel.

Blog: EUR/GBP: Renewed Brexit fears may start to weigh on sterling – Danske Bank – FXStreet

Brexit Tensions are increasing and may weigh on the British pound in coming months, warn analysts at Danske Bank. They also point out that relative interest rates have weighed on EUR/GBP for quite some time but not anymore.

Key Quotes: 

“It is still worth keeping an eye on the EU-UK negotiations on the implementation of the Northern Ireland protocol. Tensions are increasing, which may weigh on GBP in coming months.”

“EUR/GBP has been trending higher lately. Looking forward, on one hand, the positive USD environment is usually benefitting GBP relative to EUR. On the other hand, relative rates now seem supportive for EUR relative to GBP. Overall, we keep our 12M EUR/GBP target unchanged at 0.84 despite we are likely to see some support to the cross near-term.”

“A hit to global risk sentiment usually weakens GBP but if the war turns worse and/or the West imposes tougher sanctions on Russia, we are likely to see EUR/GBP moving somewhat lower again. EUR/GBP will move higher if ECB turns more hawkish. EU-UK tensions remain a risk.”