Almost four years on, Mevra Baran Akkoyun will analyse how this dream is becoming reality: ISTAC received 27% and 40% of the total arbitration applications made in Turkey in 2016 and 2017 respectively, showing it to be acting at least on par with other commonly used commercial arbitration organisations in the region such as the Istanbul Chamber of Commerce Arbitration Institution (ICC).

The nature of the disputes handled by ISTAC since its inception in October 2015 through to March 2018 have ranged from Corporate, Labour and Maritime Law to Intellectual Property and Construction contracts. Whilst 47% were domestic cases, 53% were international ones.

Any parties that wish to refer to arbitration under the ISTAC arbitration rules need only adopt the following clause, which can be adjusted according to their particular circumstances: “Any disputes arising out of, or in connection with the present contract shall be finally settled through arbitration under the Istanbul ArbitrationCentre Arbitration Rules.”

In addition to having the advantage of confidentiality in comparison with public Turkish court proceedings, the ISTAC arbitral awards have the added bonus of being binding and subject to enforcement anywhere in the world under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.

Mevra Baran Akkoyun considers that the future of ISTAC will be interesting, and comments that subject to possible legislative amendments to modernize Turkey’s international arbitration law, its arbitration rules should continue growing in validity and gravitas going forward.

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In its statement Wednesday, The company said that it had been evaluation the Irish property market for several years and is dedicated to deploying its capital into the local build-to-rent and purpose-built student accommodation sectors.

Round Hill has a successful track record of investing in, and operating residential and student accommodation assets across Europe. It has acquired, built and managed more than 110,000 residential and student housing beds in recent years. Overall, the company operates about 65,000 accommodation beds in eight European states. Its approach incorporates multiple strategies like acquiring assets, developing new purpose-built, forward-purchasing and repositioning assets.

It’s currently funding a pipeline of more than 7,000 student accommodation beds across UK, Ireland and continental Europe. The company has stated that it is targeting 20,000 student beds in these markets by 2010. Currently, it has 333, 875 sq m of residential and commercial projects under constructions across Europe.

John Vaudin has been appointed as the managing director of its Irish operation, which will be based at 12 Merrion Square in Dublin. He will oversee the group’s investment, development and operational strategy.

“I’m excited about joining the Round Hill Capital team and helping to bring their extensive international experience to bear in the Irish student accommodation and residential sectors,” said Vaudin.

“We have ambitious plans and over €1 billion of capital to deploy in Ireland and setting up a locally staffed office is a sign of our intention to invest for the long term.” He added.

Round Hill founder and chief executive Michael Bickford stated that the Irish market was struggling with supply and demand issues.

“Consistent with many European countries, the Irish student and residential housing markets suffer from structural supply/demand imbalances,” he said.

“Round Hill has a proven 15-year track record of investing into such markets, where we identify opportunities that will deliver sustainable housing, whilst creating long-term jobs. We look forward to building a substantial student and residential platform in Ireland in a responsible manner.” He added.

“I am delighted to welcome John to the Round Hill team. I am confident that his deep industry knowledge, expertise, networks and ability to deliver will prove invaluable as we continue to grow Round Hill’s business in Ireland and wider Europe.” He concluded.

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If it gets parliamentary approval, this will be the second Scottish independence referendum after 2014, when the region had voted to remain a part of the UK.

“I will take the steps necessary now to make sure that Scotland will have a choice at the end of this process. A choice of whether to follow the UK to a hard Brexit, or to become an independent country able to secure a real partnership of equals with the rest of the UK and our own relationship with Europe,” Sturgeon said.

Polls since the Brexit vote have shown that support for Scottish independence has been relatively unchanged since the first referendum in 2014.

UK Prime Minister Theresa May is expected to deny permission for another referendum. May was quick to react to Sturgeon’s announcement, hitting back at her claim that the government had put up a ‘brick wall’ over Brexit arrangements.

“We’ve been working closely with the devolved administrations,” said the PM. “We’ve been listening to their proposals and recognising the many areas of common ground we have, such as protecting workers’ rights and our security from crime and terrorism. The tunnel vision that the SNP has shown is deeply regrettable. It sets Scotland on a course for more uncertainty and division. This is at a time when the evidence is that the majority of the Scottish people do not want a second independence referendum.”

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November 4, 2016: Canadian Prime Minister Justin Trudeau flew to Brussels on the weekend to attend an EU-Canada Summit which had been delayed for three days because of opposition in Belgium to the Comprehensive Economic and Trade Agreement (CETA). Belgium came back to the negotiating table after getting added guarantees on GMO crops and protection for certain food products, clearing the way for joining all other EU members in signing the deal.

Trudeau and top EU officials signed the agreement paving the way for most import duties to be removed early next year. However, the treaty needs the approval of at least 38 national and regional parliaments, including the UK’s, to come into force.

Positive implications

Supporters of CETA say it will increase Canadian-EU trade by 20% and boost the EU economy by €12bn (£10.9bn) a year and Canada’s by C$12bn (£7.4bn).

Trudeau said consumers and businesses would immediately feel the benefits. “We will make sure that everybody gets that this is a good thing for our economies and that it is also a good thing for the world,” he said.

Speaking at the end of the 16^th EU-Canada Summit, European Commission President Jean-Claude Juncker said, “Today, the people of Canada and the European Union have opened a new chapter in their relationship. More than half a billion people on both sides of the Atlantic will enjoy new opportunities. For many people, it will mean new jobs and better jobs.”

By removing almost all import duties, CETA will allow European exporters of industrial and agricultural goods to save more than €500 million every year. The agreement protects workers’ rights, environmental standards and consumer safety. Governments will retain all of their powers to legislate, regulate and provide public services.

“CETA promotes all of the things that Canadians and Europeans care about,” said President Juncker, “decency in the workplace, our health and safety, our cultural diversity, the quality of the land, sea and air that surround us.”

With free trade under attack from populist movements and anti-globalisation campaigners, the deal reduces Canada’s reliance on the US and gives the EU a first trade pact with a G7 economy when its credibility has taken a knock from Britain’s decision to leave.

Criticism

Critics of the deal say it would favour big, multinational corporations at the expense of local, smaller businesses. One study by the EU and Canada projected the trade deal would boost total household income for both Europeans and Canadians, but a recent Tufts University study says Canadian and European workers’ income would take a hit, according to a Reuters report.

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IFM Correspondent

October 28, 2016: New Zealand managed to unseat Singapore from the top position in the World Bank’s ‘Ease of Doing Business’ Index, a globally followed ranking that is released each year by the World Bank. It ranks countries – as one would expect – according to the ease with which businesses can be set up and run in the nation. Singapore had had an unbroken stint at the top for 11 years.

The reasons

The World Bank attributed reductions in labour-related taxes and new regulations that make paying taxes easier as the key reasons for moving New Zealand to the top spot from its previous position as runner-up.

Methodology

A set of 10 parameters/topics is used to zero in on the ranking for each country. These include the ease of starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

The rankings are determined by sorting the aggregate distance to frontier (the distance of each economy to the ‘frontier’, which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005) scores on the 10 topics, each consisting of several indicators. Equal weight is given to each topic.

Doing Business 2017: The Top 10

The Doing Business 2017 team studied 190 economies around the world. In general, European countries fared better, with Denmark, Norway, UK, Sweden and Macedonia all finding spots in the Top 10. New Zealand, Singapore, Hong Kong, Korea and the US also featured in this list.

Most of the top ten shifted around a bit, with Denmark staying in third place, Hong Kong edging higher to fourth from fifth, exchanging places with South Korea, and Norway rising to sixth. The United States, the United Kingdom and Sweden ranked slightly lower.

Other economies: Notable points

Brunei showed the biggest improvement in rankings over last year, moving to the 72^nd position from last year’s 84^th with a new insolvency law passed, increased protection for minority investors and more reliable supply of electricity.

Somalia came in at the bottom, indicating that it is the hardest country to do business in, while the most improvement was seen among several of the emerging market countries. The reason behind this trend is seen to be a move by the governments of these countries to pursue business-friendly reforms.

Implications of the rankings

The World Bank says better performance in the ‘Doing Business’ rankings generally equates to lower levels of income inequality and reduced poverty. “Simple rules that are easy to follow are a sign that a government treats its citizens with respect,” the World Bank’s chief economist Paul Romer said in a statement. “They yield direct economic benefits – more entrepreneurship, more market opportunities for women, more adherence to the rule of law.”

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IFM Correspondent

October 25, 2016: The Canadian economy has been facing a serious slump due to a number of reasons. To add to its woes, negotiations over a key trade deal – the Comprehensive Economic and Trade Agreement (CETA) –  are in crisis. The Agreement, which would do away with tariffs on most goods between the EU and Canada, has been in meltdown since October 21.

The Agreement, which has been in the making for seven years, is the EU’s most ambitious free trade deal to date. The breakdown in talks would mean the freezing up of trade worth about $70 billion a year and about $285 billion of direct investment.

Failure of negotiations with Wallonia

Standing between Canada and the trade deal with the EU is the relatively small population – 3.5 million – of Wallonia, a French-speaking region in Belgium, which has refused to favour the deal. The EU, having a population of 510 million people, is a single market and calls for unanimity on trade deals.

Chrystia Freeland, Minister of International Trade, Canada, announced on October 21 the ‘end and the failure’ of talks with the government of Wallonia.

Although Wallonia enjoys some support for its position elsewhere in the EU, of the 28 nations that make up the bloc, Belgium has been the only member state that has not endorsed the CETA.

Why talks derailed

CETA proposes to link the EU market with that of Canada – the world’s tenth largest economy. The trade deal is being opposed by groups that stand against globalisation who claim that that the CETA is a testing of the waters in order to push through an even more contentious EU-US trade agreement by name TTIP, the negotiations surrounding which have also stalled.

The ultimatum to Wallonia

The EU communicated to Belgium that it expected Prime Minister Charles Michel to make its position on CETA clear and had given the Belgian federal government time until October 24 for the same.

The leader of the socialist-run Wallonia region, Paul Magnette, reacted to this mandate by stating that the ‘ultimatum is not compatible with the exercise of democratic rights’. Despite efforts by the EU to reassure his government regarding investment protection, which remains a major obstacle in the negotiations between Brussels and Wallonia, Magnette struck out at the EU, saying, “We will never decide anything under an ultimatum or under pressure.”

Latest developments

If Prime Minister Michel cannot assure European Council president Donald Tusk that Belgium will allow the Agreement to go through, the planned EU-Canada summit to be held on October 27 in order to sign the pact will be indefinitely postponed.

For now, though, things remain hopeful, with Chrystia Freeland, the Canadian Minister of International Trade saying, despite setbacks on October 24, that ‘CETA isn’t dead yet’.

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Dirk Schoenmaker & Charles Goodhart

October 25, 2016: The European banking system is downsizing. As a consequence, the big US investment banks are on the rise in Europe. This article argues that US investment banks are about to surpass their European counterparts in the European investment banking market. We discuss why leaving global investment banking to the big five American banks might be problematic and offer recommendations for a policy response.

1.        Introduction

Europe’s banks are in retreat from playing a global investment banking role. It is a consequence of the regulatory impositions of recent years, notably of the ring-fencing requirements of the Vickers Report (2011) and the ban on proprietary trading by Liikanen (2012). The main concern has been that a medium-sized European country, such as the United Kingdom or Switzerland, or even a larger country like Germany, would find a global investment bank to be too large and too dangerous to support, should it get into trouble. So, one of the intentions of the new set of regulations was to rein back the scale of European investment banking to a more supportable level.

The European Union, of course, has a much larger scale than its individual member countries. If the key issue is the relative scale of the global (investment) bank and state that might have to support it, could a Europe-based global investment bank be possible? We doubt it, primarily because the EU is not a state. It does not have sufficient fiscal competence. Even with the European banking union and European Stability Mechanism, the limits to the mutualisation of losses mean that the bulk of the losses would still fall on the home country. Moreover, there would be intense rivalry over which country should be its home country, and concerns about state aid and the establishment of a monopolistic institution. While the further unification of the euro area might, in due course, allow a Europe-based global investment bank to emerge endogenously, we do not expect it over the next half-decade or so.

So the withdrawal of European banks from a global investment banking role is likely to continue. That will leave the five US ‘bulge-bracket’ banks, (Goldman Sachs, Morgan Stanley, JP Morgan, Citigroup and Bank of America Merrill Lynch) as the sole global investment banks left standing. That leaves the European and Asian banks in the second tier, as strong regional players. Examples are Deutsche Bank, Barclays and Rothschild in Europe and CITIC in the Asia-Pacific region. HSBC is in between, with both European and Asia-Pacific roots.

2.       The rise of US and decline of European investment banks

While the US investment banks are the global leaders, what is their share in the European investment banking market? In a new paper (Goodhart and Schoenmaker, 2016), we use the Thomson Reuters investment bank league tables to calculate the investment banking proceeds of the top 20 players (see, for example, Thomson Reuters, 2016). Figure 1 shows that the market share of EU and Swiss investment banks has declined since 2010/11, while the share of US investment banks (the big five and Lazards) increased from 35 percent in 2011 to 45 percent in 2015. If the trend were to continue, US investment banks would take the prime spot from their EU counterparts soon, possibly already in 2016.

Figure 1: Investment banks by origin, European market shares (%)

Source: Goodhart and Schoenmaker (2016)

3.       Concerns for Europe

Why should it matter if in all the European countries, the local banks’ investment banking roles retrench to a more limited local role? There are three arguments why leaving global investment banking to the big five American banks might be problematic. The first is that this could leave Europe at greater risk from possibly ill-advised American political or regulatory intervention. A case in point is in the last crisis, when US banks came under pressure to reduce their foreign (including European) assets. While this danger exists, it was already present before the withdrawal of European banks from global investment banking. Since the US dollar and US financial markets play the central role in the financial system, the US is in a position to enforce its demands on acceptable counterparty transactions and to dominate, for good or ill, the international monetary policy scene.

The second argument is that this will leave global investment banking much more concentrated. Is this not potentially dangerous? Perhaps, but the five American investment banks still compete quite ferociously, so margins are not rising all that much.

Finally, the third argument is that current developments are inducing European banks more and more to concentrate on their national roles and clients in their investment banking operations, rather than taking a wider European stance. Deutsche Bank and Barclays are the only Europeans left in the top seven for the European market. But they are likely to lose their positions, because Deutsche Bank is currently undergoing a major reorganisation and Barclays is in the process of executing the Vickers split. In the investment banking field, the only pan-European banks will all soon be American.

There are concerns about US dominance in European investment banking. These are related to information advantages and soft relationships. The question arises whether US investment banks, as outsiders, are sufficiently knowledgeable about European corporates. Moreover, what is the loyalty of these US banks to European corporates in times of distress?

4.       Policy response

The European banking system is downsizing, partly because of on-going problems, partly because Europe is overbanked (Langfield and Pagano, 2016). That should run its course. The consequence is that the big US investment banks will be the sole leaders in the global investment banking market, as the Europeans, including the Swiss, are in retreat. Thus, the big five Americans are getting into pole position in the European investment banking market.

What should be the policy response? First, we look at the political side. With the decline of European banking (both in general and specifically investment banking), Europe’s hand in the EU-US Regulatory Dialogue is diminishing. Nevertheless, the European Commission is advised to strengthen its position in the EU-US bilateral negotiations and keep on viewing its banking industry as a strategic sector. The emerging role of the European Central Bank (ECB), on both the monetary and supervisory sides, can be used in these negotiations. The European Commission and the ECB should therefore jointly develop a strategic agenda with European priorities for their dealings with the US authorities. As in the US, this strategic agenda should be discussed with, and supported by, the industry.

Second, we turn to the supervisory side. While Europe may lose some political clout, the supervisory implications are not a problem for Europe. With the move to capital markets union, the European supervisory architecture can handle the gatekeepers, which are becoming more US-dominated. The European Securities and Markets Authority (ESMA) has powers under the Regulation on Credit Rating Agencies to licence and supervise the European operations of the primarily US-based credit rating agencies. Similarly, the relevant directives (Capital Requirements Directive and Markets in Financial Instruments Directive) give the relevant supervisors in Europe (in this case the Prudential Regulatory Authority and the Financial Conduct Authority in the UK) powers over the London-based European operations of the US investment banks. After Brexit, the US investment banks might move (part of) their business to Frankfurt and Paris. In that case, the ECB – the new supervisor in the banking union – would become the supervisor of these continental European operations.

Third, the large corporates could themselves take precautions. For the bigger financing operations, a corporate typically hires a banking syndicate, which is a group of investment banks that jointly underwrite and distribute a new security offering, or jointly lend money to the corporate. European corporates would be well advised to include at least one (large) European investment bank in this syndicate, also in good times when they do not need them. That could help them in bad times, when US banks might be reluctant for whatever reason (including more detached decision-making). The involvement of a (local) European investment bank in the syndicate is not only useful for loyalty but also information reasons. Because of their local roots, the European banks have an information advantage over their US peers, which keep offices in New York and London (and after Brexit, Frankfurt or Paris). The practice of giving a European investment bank at least one place in further US-dominated banking syndicates could help to avoid complete dependence on the whims of the big US investment banks.

Dirk Schoenmaker is Professor of Banking and Finance at Rotterdam School of Management, Erasmus University and Charles Goodhart is Emeritus Professor of Banking and Finance at London School of Economics

References

Goodhart, C. and D. Schoenmaker (2016), ‘The United States dominates global investment banking: Does it matter for Europe?’, Policy Contribution 2016/06, Bruegel.

Langfield, S. and M. Pagano (2016) ‘Bank bias in Europe: effects on systemic risk and growth’, Economic Policy 31(85): 51-106.

Liikanen Report (2012) High-level Expert Group on Reforming the Structure of the EU Banking Sector, Final Report, Brussels.

Thomson Reuters (2016) ‘Global Investment Banking Review, Full Year 2015’, Thomson Reuters Deals Business Intelligence, New York.

Vickers Report (2011) Final Report: Recommendations, Independent Commission on Banking, London.

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Nigel Davies

October 17, 2016: Over the past decade, the nature of the threats to society has evolved beyond the physical world in which they traditionally operated. State-sponsored cybercrime and organised criminal hacking has become a threat to almost every sector that relies on an internet connection. Unsurprisingly, the financial trading sector is at increasing risk from such activity.

Many countries are now waking up to the fact that protecting national security in an increasingly volatile geopolitical landscape requires more than the traditional military and law enforcement efforts of previous decades. Just two examples of recent national security breaches include an attack on the Ukrainian national power grid and an attempted $951 million heist on Bangladesh’s central bank (the thieves successfully stole $81 million).

Cybersecurity firm Symantec has since found evidence linking the theft to the North Korean government, along with a string of other state-sponsored attacks against banks in South East Asia. The attacks against Ukraine and Bangladesh boiled down to one fact: malicious actors were able to exploit vulnerabilities in the critical national infrastructure (CNI) of entire states, resulting in severe consequences for both targets; an attractive end goal for any attacker.

Nigel Davies is Head of Secured Navigation, QinetiQ

Defence review covers private sector

This new kind of attack is reflected in the UK’s latest Strategic Defence and Security review. Evolving from its 2010 predecessor, the security of the private sector and civil society are now as much a part of the review as the military. From the ‘bombs and bullets’ approach of previous strategic policies, it is now concerned with defence against state-sponsored attacks, organised crime and protecting CNI.

The government’s intent “is for the UK to remain the top choice for European and global bank headquarters”, intending also to “build resilience to financial crisis”. Most importantly, it “will seek to develop long-term partnerships with industry, built on trust and collaboration, through better sharing of information and expertise¹.” It’s clear that, given its importance to the UK’s economy, protecting the financial trading sector plays a big part in securing the UK’s CNI.

At the moment, precise timing and synchronisation of financial transactions is critical to markets worldwide, is mandated by regulation in the European Union and is increasingly required in the United States. These high frequency transactions (HFT) involve moving millions of dollars in the space of seconds, with monetary values adjusting and reacting to real-time updates. To put it in perspective, the New York Stock Exchange handles nearly $2 billion in trades in the first two minutes of opening.

In order to allow HFT, the financial trading industry relies on timing sources and systems generally reliant on Global Navigation Satellite Systems (GNSS), such as GPS, to remain in sync with incredibly accurate timestamps.

The MiFID II legislation, announced last year and coming into effect across the EU in 2018, dictates that trades have to be traceable up to 100 microseconds. The reliance on such miniscule accuracies and coordination makes the system and the source of time and synchronisation information an obvious target for attack.

The vulnerabilities

While GNSS has become a phenomenally successful, ubiquitous and reliable source of accurate time, it suffers from two fundamental vulnerabilities. The first is in the strength of the GNSS signals, which are used by receivers to calculate time and position. The satellites which transmit those signals orbit the Earth at an altitude of over 20,000 km, which means that the signals are very weak and vulnerable to interference by the time they reach Earth. In fact they are so weak as to be imperceptible from the background noise of other transmissions, requiring complex algorithms to identify and track them. An attacker who is able to transmit additional ‘noise’ over the top of GNSS signals can stop a receiver from working properly, or at all.

The most basic of jamming devices work by broadcasting excessive noise over the GNSS signal, resulting in the receiver’s inability to lock onto the signals broadcast by the GNSS satellites.

The SENTINEL Project – a nationwide, UK government-backed investigation into GNSS jamming – tracked the proliferation of jammers, finding in one location more than 60 GPS interference incidents in six months.

While most interference incidents are minor and go unnoticed, in some situations, the impact can be substantial, leading to lost revenue. An example of this in action took place in 2009. Engineer Gary Bojczak was fined $32,000 for transmitting radio interference which disrupted the operation of Newark Liberty International Airport’s new air traffic control system.

Bojczak worked for an engineering firm that tracked its vehicles using GPS. However, Bojczak installed a jamming device in his assigned vehicle to stop his employer tracking his movements. His daily work route would take him past the airport, subsequently interfering with GPS signals used by the aircraft landing aids on approach to the airport.

The other vulnerability is the ease with which a false signal can be transmitted by an attacker to ‘trick’ a receiver into generating a false position or time. This is known as a ‘spoofing’ attack. The open access GNSS signals, which are widely used today by non-military users, are defined by open standards published on the internet. While this has led to a vibrant market in GNSS devices, it also means that the signals can be copied by an attacker.

These two factors combine to make the civilian satellite systems used by the financial trading sector highly vulnerable to tampering, blocking and disruption. Currently, devices which can create interference and disrupt the use of GNSS can be bought for as little as $40 online and are often no bigger than the size of a cigarette lighter.

Spoofing attacks are more complex and, until recently, were considered to be only within the grasp of Nation States and militaries. However, a 2015 paper published by the Chinese Qihoo 360 security research firm demonstrated GPS spoofing using low-cost hardware and open source software.

While there is  only rare and anecdotal evidence of civilian spoofing attacks to date (for instance, reports that drug cartels are spoofing drones operated by the US Customs and Border Protection agency), most experts believe it is only a matter of time before attacks become more common.

Mitigating threats

The sheer volume and value of data in the financial industry that needs to be time-stamped by GNSS data leaves it at risk from interference. Interfering with a GNSS signal could have consequences for trading bodies calculating the correct time of trades and keeping up with real-time trade requests. Even an event that lasted only a couple of seconds may impact system performance or even cause a crash as timings between networks fail to match. In the era of HFT, this could be costly.

Audit trails would also become confused, with one party buying and receiving the share before the other has ‘officially’ sold it. This is crucial when regulators have started to clamp down on HFT fraud; an inability to unravel HFT trails could leave the industry open to market rigging.

Such interference events are experienced by financial organisations. It is claimed that for roughly 10 minutes every day, the London Stock Exchange experiences problems with the signals it receives from GPS satellites due to such inadvertent jamming.

Fortunately, as evidenced by the aims set out in the 2015 Strategic Defence and Security review, the UK is quickly coming to terms with this new age of threats and is looking to future technologies which can effectively secure the nation’s critical infrastructure.

Over the next few years, the GNSS landscape will undergo a radical change. New GNSS are being deployed by Europe (Galileo) and China (Beidou), GPS is undergoing an overhaul to GPS version 3, and the Russian system (GLONASS) is being modified to be more compatible with other systems. With more systems comes redundancy and resilience. The new and modified systems bring new services and diversity.

A new generation of multi-constellation, multi-frequency (MCMF) receivers provide security to a range of threats affecting GNSS, enabling high levels of robustness and security for time-stamping as demanded by financial trading regulators. In the event of an interference attack, the MCMF capabilities allow the receiver chips to access multiple systems simultaneously, switching seamlessly between over 100 satellites, cross-checking between signals for consistency, readjusting to the next available signal, or ignoring signals (either spoofed or generated in error), which don’t agree with others.

The European Galileo system will introduce the first civilian secure, encrypted GNSS signal, the Public Regulated Service (PRS), which will be available to government-authorised organisations; core financial infrastructures are candidates for inclusion. PRS adds additional resilience against interference and is very secure against spoofing. Combining the encrypted GNSS services with new MCMF receivers minimises the likelihood of system crashes and timestamp manipulation resulting from spoofing and jamming events.

The use of these additional services together with resilient receiver processing techniques and robust design of the overall timing and synchronisation sub-systems (e.g. using accurate atomic clocks disciplined by the GNSS timing signals) can effectively mitigate these threats. With the threat of interference significantly reduced, the financial trading sector can be effectively secured on an operational level, safeguarding its future in an era of growing technological threats.

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IFM Correspondent

October 4, 2016: Dutch bank ING, the country’s biggest lender, announced plans to shed 7,000 jobs, mainly in Belgium and The Netherlands. The plan is part of cost cutting measure for the company, which will help it save $1.01 billion by 2021. The rise of online banking competitors is forcing the bank to reshape its digital banking strategy.

ING presented the job losses in Belgium and the Netherlands as being part of its ‘Think Forward’ strategy aimed at digitising more of the group’s operations.

Rik Vandenberghe, chief executive of the bank’s Belgian arm, said on Monday that the decision was “a shock for a lot of people … it was not an easy decision, I have not slept well these last days.”

Ralph Hamers, chief executive of ING Group, said, “You have to announce these programmes and these intentions at a time when you can afford them. We’re strong right now, we have good results, we are growing and then you have to do the repairs, and not when you don’t have any choice anymore.”

He also highlighted that ING had been hit — like other European banks — by low interest rates in the eurozone and tough regulation.

Belgian and Dutch unions reacted angrily, but analysts said the job losses were the result of the online transformation of the banking industry.

The move is the third financial sector restructuring announced in Belgium in recent weeks. Earlier, Axa Belgium and P&V also announced planned job cuts.

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Jaspreet Sehmi

August 2, 2016: In its first set of projections published since the UK voted to leave the EU, the IMF has downgraded its forecasts for global, eurozone and UK growth. In addition, the Fund says that the UK will be the worst affected of all the advanced economies – a view that Dun & Bradstreet shares given that Britain faces the largest amount of uncertainty and change. The financial markets were largely unfazed by the release of the IMF report, given widespread expectations for more substantial downward revisions.

In the event, the IMF reduced its UK growth estimate for 2016 by only 0.2 percentage points to 1.7%, and even though it cut back its 2017 estimate more sharply, it nevertheless remains firmly in positive territory at 1.3%. These forecasts are based on the rather optimistic assumption that the UK and EU will broadly maintain their existing trade and financial relationship. However, the UK government is loath to accept a deal that preserves the free movement of labour, unfettered access to the single market and the continuation of full ‘passporting’ rights for the City are far from guaranteed.

The IMF has pointed to financial market resilience in the weeks following the referendum as a key factor supporting its relatively sanguine baseline projections. Indeed, global markets have stabilised and risk assets have recovered relatively quickly from their post-Brexit sell-off. However, it is important to remember that market reactions tend to be volatile and short-termist while the economic facts on the ground take more time to filter through. Indeed, we believe that the current market respite will prove temporary, with the UK economy now passing through the eye of the storm. In contrast to what the IMF forecasts appear to imply, we continue to expect the UK to enter a technical recession at some point between the second half of this year and the first half of 2017.

While post-Brexit official statistics on the economy will not be released for some time, anecdotal and survey evidence suggests that firms are already scaling back investment and hiring plans while the housing market has started to show signs of cooling. The UK’s Composite Purchasing Managers’ Index (PMI) – which is based on a survey of manufacturing and services firms – fell substantially in July to hit its lowest level since early 2009, indicating a sharp contraction in business activity following the Brexit vote.

Despite unexpectedly holding fire in July (a decision probably taken to convey a sense of calm to the global financial markets), we expect the Bank of England to cut the benchmark interest rate by at least 25 basis points from the already-record low of 0.5% at its forthcoming August monetary policy meeting. It is also very possible that policymakers could announce a new round of quantitative easing stimulus measures within the coming few months.

Our full-year growth forecasts for 2016 and 2017 currently stand at 1.3% and 0.4% respectively and our UK risk rating remains at DB2c (downgraded from DB2a immediately after the vote). While this rating still falls within our ‘low-risk’ category, it remains subject to further downgrades ahead given the many headwinds now facing the UK economy, including tighter credit conditions, higher inflation, elevated business and consumer uncertainty and limited room for monetary policy manoeuvre. As such, we expect unemployment to begin to edge higher, inflation to accelerate, real wage growth to tail off and the government deficit to widen in the coming months.

Looking ahead, we believe that while the UK will emerge from its short-term economic woes, it will not escape unscathed. The vote to leave the EU will have a long-term impact on the trajectory of the economy – whatever the eventual outcome. And with prime minister Theresa May having recently announced that Article 50 will not be triggered this year, the ongoing lack of clarity will continue to hamper business activity and could trigger further periods of Brexit-related market volatility. Indeed, with a new government at the helm, trying to navigate the UK economy through previously unexplored territory to a yet-undetermined destination, the journey ahead remains long, fraught with uncertainty, and full of hazards.

Companies and investors with business interests/operations in the UK and EU are advised to continue to monitor developments closely and should brace themselves for an open-ended period of uncertainty and turbulence. As such, it is important to maintain a flexible approach to business planning. However, it should be remembered that the UK will remain a full member of the EU until at least early 2019, in which time the legal framework governing the UK’s relations with the Union will remain unchanged.

Nevertheless, we advise firms to expect the pound to remain weak against the dollar for at least the coming one to two years and to anticipate a reduction in demand from UK-based consumers and businesses as heightened uncertainty weighs on purchasing and investment plans. Moreover, international firms should be prepared for a deterioration in the payments performance of small and medium sized UK-based counterparts as they face a squeeze in margins owing to lower domestic demand and higher costs for imported inputs. Finally, we advise companies to explore trade and investment opportunities in non-EU markets (where possible) in order to diversify their risk exposure.

Jaspreet Sehmi is a Senior Economist at Dun & Bradstreet

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