European Banking Authority
High earners - EBA publishes 2021 report - 19 January 2023
The European Banking Authority (EBA) has published its report on high earners in EU banks as at the end of 2021 (EBA/REP/2023/05).
The analysis shows a significant increase in the number of individuals working for EU banks and investment firms who received remuneration of more than EUR 1 million, compared to the 2020 financial year. According to the EBA, this increase is linked to: (i) the good financial performance of institutions, particularly in investment banking and trading and sales; (ii) the continuation of relocation of staff to the EU activities in the context of Brexit; and (iii) an overall increase in salary levels. The EBA observes that another relevant factor supporting the upwards trend may be the loosening of relevant COVID-19 restrictions. The analysis also notes that the weighted average ratio of variable to fixed remuneration for all high earners increased from 86.4% in 2020 to 100.6% in 2021.
The EBA will continue to publish data on high earners annually. It intends to collect data for 2022 based on revised guidelines on higher earner data collection exercises.
EBA report on high earners data as of end 2021
Press release
HM Treasury
Payment services regulation - HM Treasury publishes review and call for evidence - 13 January 2023
HM Treasury has published a review and a Call for Evidence on the Payment Services Regulations 2017 (PSRs 2017). In summary, HM Treasury finds that the PSRs 2017 have generally “fostered a strong, innovative and competitive UK payment sector” and that they “continue to act as the foundation for regulating the sector and ensuring adequate consumer protection.” That said, there are “several key areas where the regulatory framework for payments is potentially not working as well as it could.”
The Call for Evidence focuses on how UK payments regulation should evolve to continue to meet the UK government’s aims, each of which is discussed separately in the document:
- Achieving agile and proportionate regulation: the Call for Evidence notes that there is a strong case for delegation to the FCA of firm-facing rules to enable a more agile framework. The government will also consider whether the definitions and scope of the regime are future-proofed (including ensuring that the definitions are enabled for cryptoassets, where relevant) and if it is appropriate to maintain separate authorisation and regulatory regimes for payments and e-money institutions.
- Appropriate protection for consumers: HM Treasury explains that the safeguarding regime for payments and e-money would benefit from greater regulatory agility as well as the FCA’s supervisory experience when requirements are set in regulatory rules rather than statute. The government would like to assess how the current framework for effective contractual protections for payment service users is operating and whether it requires clarification or wider change. It is particularly interested in the effectiveness, clarity and fairness of regulations 51 and 71 in the PSRs 2017.
- Resilience and integrity: HM Treasury confirms that it is reviewing the evidence provided to its July 2022 call for evidence on payments regulation and the systemic perimeter and will set out a response later in 2023.
- Competition: The Call for Evidence notes that the government is progressing the further development of open banking. It is interested in whether the information requirements set out in the PSRs 2017 and the retained EU law version of the Regulation on cross-border payments (UK Cross-Border Payments Regulation (924/2009)) can be enhanced to provide relevant information to consumers, and support a better, competitive market in payment services.
The full list of questions in the Call for Evidence is set out at the end of HM Treasury’s paper. The Call for Evidence will close on 7 April 2023.
HM Treasury: Payment Services Regulations: Review and Call for Evidence
Webpage
Payment Card Interchange Fee Regulations 2015 - HM Treasury publishes Post Implementation Review - 13 January 2023
HM Treasury has published a post implementation review of the Payment Card Interchange Fee Regulations 2015 (PCIFRs). The PCIFRs came into force on 9 December 2015, implementing aspects of what is now the onshored version of the Interchange Fee Regulation 2015 (EU) 2015/751 (UK IFR), which caps interchange fees charged for the acceptance of consumer debit and credit cards. In particular, the PCIFRs designate the Payment Systems Regulator (PSR) as the competent authority to monitor the UK IFR, with the FCA designated as a co-competent authority.
In short, HM Treasury considers that the powers given to the competent authorities by the PCIFRs are necessary to ensure that the substantive legislative framework under the UK IFR is enforceable. The review notes that the government’s wider approach to interchange fee policy and the related regulatory powers will be determined under its programme to enact the repeal of retained EU law in financial services and build a regulatory framework tailored to the UK, as trailed by the Future Regulatory Framework review (to be implemented via the Financial Services and Markets Bill).
Post Implementation Review
Payment Systems Regulator
Barriers to use of digital payments - PSR publishes summary of roundtable discussion - 19 January 2023
The Payment Systems Regulator (PSR) has published a summary of a roundtable discussion, held on 29 November 2022, exploring the barriers preventing people who rely on cash from using digital payments. The discussion formed part of PSR’s Digital Payments Initiative and follows the PSR Panel’s Digital Payments Initiative report published in May 2022.
The participants included a range of experts from consumer groups and payments industry representatives. The discussion focused on payment cards that meet the needs of people who rely on cash and flexible digital bill payments to help those with low and irregular incomes. The participants also discussed how prepaid cards could be a ‘near-cash’ bridge to people using digital payments (and other financial services) - and what could stop this happening. These barriers include the need for online or smartphone access to obtain the full benefit of many prepaid card services and a lack of awareness and understanding of prepaid card services and their benefits among people on low incomes who rely on cash.
The PSR Panel published a report on digital payments in May 2022. The PSR will continue to develop its work plans in light of the roundtable discussion.
PSR: Digital payments initiative: barriers to using digital payments summary of roundtable
Webpage
Press release
