This week’s treasury news round-up

Plans to overhaul trade finance infrastructure by the R3 consortium, brexit confidence by UK mid-sized businesses and global financial assets hitting a record high all hit the latest headlines in the world of treasury this week.


UK mid-market businesses “defiantly confident”

The growth prospects of UK mid-market businesses remain defiantly ambitious and confident despite an unstable economic landscape and the impact of Brexit, reports British law firm Mills & Reeve.

As many as 83% of mid-market firms plan to increase turnover this financial year, by an average of 22%, the firm found after interviewing 500 CEOs, CFOs and board directors of mid-market companies across the UK.

Of those that plan to grow, 62% would bet their house on meeting target, the firm claims.

However, 56% of leaders think that mid-market finance is “not fit for purpose” and 63% believe that the UK funding environment is great for start-ups, but not for mid-market firms.

More than half (58%) concerned that their company can’t achieve full potential without better long-term funding, the firm reports.



Global financial assets hit record high €170trn

Global financial assets growth has risen above 7% and debt is rising faster than economic output for the first time since 2009, the Allianz Global Wealth Report has found.

Bank deposits remain popular, despite real losses owing to inflation, according to the report, which studies asset and debt situation of households in more than 50 countries.

2016 was politically a very turbulent year, but private wealth shrugged it off, Allianz claims.

After a weaker 2015 (with 4.7% growth), financial assets grew again by 7.1%in 2016, more or less matching the post-crisis average.

Worldwide, financial assets climbed to a new record high of almost €170trn.

The report also found stock markets fuel growth, but savers prefer to put their money into banks.

German households work hard for their money, the report claims, while others get their money to work for them.

At 54%, Germany’s debt ratio is not only significantly below the euro area average but also miles away from the numbers some 15 years ago when it hovered above 70%.



Nao the RobotThree quarters of British workers welcome AI at work

Three quarters of British workers welcome the rise in artificial intelligence and robots at work as they believe it will give them more time to do their primary job duties, a report by Workfont claims.

Currently, British workers spend only 40% of their time on their primary duties largely because email, meetings and non-essential tasks take up the bulk of their working week.

While the overwhelming view on automation was positive, around 2 in 5 (38%) feared that “rising automation will place humans and robots in competition for the same jobs in the future,” Workfont claims.

As many as 84% agreed with the sentiment that “the use of automation in the workplace will let us think of work in new and innovative ways”

Similarly, 82% expressed excitement at the chance “to learn new things as the workforce moves toward more automation.”

Almost every surveyed (92%) agreed that “no matter how sophisticated artificial intelligence becomes, there will always be the need for the human touch in the workplace.”




Plans to overhaul trade finance infrastructure announced by R3 consortium

An innovative initiative focused on the overhaul of open account trade finance infrastructure was announced yesterday by enterprise software firm R3 and trade finance technology firm TradeIX.

The initiative is a joint undertaking between R3, TradeIX, and twelve financial institutions including Bangkok Bank, Barclays, BBVA, Bladex, BNP Paribas, Commerzbank, CTBC Bank, ING, Intesa Sanpaolo, Shinhan Bank, Royal Bank of Scotland and Wells Fargo.

R3, TradeIX and the participating banks are developing an end-to-end open account trade finance business network which will be powered by TradeIX and R3’s Corda distributed ledger platform.

The prototype will be customised to meet the needs of participants across multiple geographies, supporting the continued growth of open account trade whilst making it safer and simpler.

This initiative aims to provide open account trade solutions.

These include a robust suite of trade specific APIs and technology tools, a sophisticated rules engine, and an open, standard core infrastructure for trade data, contracts, and transactions.

David Rutter, CEO of R3, says: “Earlier this year R3, TradeIX and a core group of R3 members teamed up to redesign the infrastructure behind open account trade finance utilising our Corda platform and the TIX-Platform of TradeIX.

“Existing trade finance infrastructure is in serious need of an upgrade, and this project is a big step towards the adoption of reliable, efficient and standardized processes for the entire sector,” he adds.



Macron proposes unified EU reform on defence, migration and economics

French President Emmanuel Macron explained his vision for reforming the European Union (EU) on Tuesday.

The EU should cooperate further on defence and climate change, have a more flexible Common Agricultural Policy, an EU-wide tax on financial transactions that is linked to foreign aid, the young French president said.

Macron proposed issues of migration should be tackled with strengthened border control and cooperation with the countries of origin.

On Eurozone reform, Macron said the common currency needs common rules, including “a real budget at the heart of Europe”, and instruments as well as convergence and stability.

This would require increased responsibility and parliamentary supervision, Marcon argued.

Britain could re-join this reformed EU in a few years, Marcon argued.

While this may win over many, Brexit voters who were afraid of the EU holding too much power may not be persuaded.


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