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Commercial Awareness Update - June 2019
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<blockquote data-quote="Angel" data-source="post: 11642" data-attributes="member: 980"><p>Hi everyone!</p><p></p><p>Welcome to this week's commercial news update!</p><p></p><p><strong><span style="color: #0080ff">Commercial News Update – 19th June 2019</span></strong></p><p></p><p><span style="color: #0059b3">The topics for this week are: </span></p><p><span style="color: #0059b3"></span></p><p><span style="color: #0059b3">1.<strong> Monzo’s US Launch</strong> (by [USER=1550]@Sairah[/USER])</span></p><p><span style="color: #0059b3">2. <strong>Deustche's bad bank report</strong> ([USER=1643]@Moni[/USER])</span></p><p><span style="color: #0059b3">3. <strong>London-Shanghai Stock Connect</strong> ([USER=1]@Jaysen[/USER])</span></p><p><span style="color: #0059b3">4. <strong>Hong Kong’s Protest </strong>([USER=980]@Angel[/USER])</span></p><p><span style="color: #000000">________________________________________________________________________________________________________________________________________________________________</span></p><p><u><span style="color: rgb(0, 0, 0)"></span></u></p><p><u><span style="color: rgb(0, 0, 0)"><strong>Monzo’s US Launch</strong> ([USER=1550]@Sairah[/USER]) </span></u></p><p><span style="color: #000000"></span></p><p><span style="color: #000000"><strong>The Story:</strong></span></p><p><span style="color: #000000"></span></p><p><span style="color: #000000">Last Thursday, Monzo (one of the UK’s most well-known fintech start-ups) announced its expansion in the United States. The digital online-banking app which currently holds two million customers in the UK, will initially start up by holding sign-up events in Los Angeles for its couple thousand debit cards. To help with the US launch, Monzo has partnered with Ohio-based domestic lender, Sutton Bank. </span></p><p><span style="color: #000000"></span></p><p><span style="color: #000000">Despite its success in the UK, Monzo’s launch in the US will be a slow one. This is because the “lighter version” of the US mobile-banking app will not support popular features like Apple Pay or cash or check deposits. Also, American customers may not be able to fully trust Monzo at first if their banking services are not officially licensed and regulated in the US.</span></p><p> <span style="color: #000000"></span></p><p><span style="color: #000000"><strong>Impact on Businesses and Law Firms:</strong></span></p><p><span style="color: #000000"></span></p><p><span style="color: #000000">Monzo will be entering a $7 trillion financial services sector meaning its expansion in the US will be a challenging venture. It will be up against America’s “big four” banks: </span></p><p><span style="color: #000000"></span></p><p><span style="color: #000000">JP Morgan Chase, Citigroup, Wells Fargo and Bank of America. In addition, Monzo will need to comply with both federal and state laws in the US. However, a new entrant like Monzo could prove a success in the long-term by promising customers a better ‘digital’ customer experience, shifting away from the US retail-banking market’s traditional practices.</span></p><p><span style="color: #000000"></span></p><p><span style="color: #000000">Since 2015, Monzo has caught the interest of many venture capital investors. It has raised over £200 million from investors including Accel, Thrive Capital and General Catalyst. Recently, Monzo reached its unicorn status (a start-up company valued at over £1 billion) following its recent round of funding last year. Due to the demand of neo-banks like Monzo, traditional banks are becoming under pressure to invest in FinTech solutions. This will provide more opportunities for law firms, as they will be placed to act for financial institutions such as advising on shared licenses with FinTech start-ups or even theacquisitions of start-ups This would expand the services provided by law firms in not only FinTech, but also IP and M&A.</span></p><p>________________________________________________________________________________________________________________________________________________________________</p><p><span style="color: #000000"></span></p><p><span style="color: #000000"><strong><u>Deustche's bad bank report ([USER=1643]@Moni[/USER])</u></strong></span></p><p><span style="color: #000000"></span></p><p><span style="color: #000000"><strong>The Story</strong></span></p><p><span style="color: #000000"></span></p><p><span style="color: #000000">This week Deutsche Bank announced plans for a major restructuring including an overhaul of its trading operations by creating a ‘bad bank’ to hold ~ €50 billion euros of non-core assets, comprising mainly of long-dated derivatives. The restructuring will also include shrinking or shutting equity and rates trading businesses. Deutsche has struggled to generate profits since the financial crisis and its recent attempt at a merger with Commerzbank failed in April. The most recent plan appears to be part of the ‘tough cutbacks” CEO Christian Sewing recently promised shareholders. Deutsche has already made shifts to focus on more stable forms of revenue, and the cuts to its trading businesses are a further step in that direction. Moreover, the bank said that the measures are aimed improving its “sustainable profitability”. The CEO is expected to announce further measures in July, likely around the next earnings announcement. </span></p><p><span style="color: #000000"></span></p><p><span style="color: #000000"><strong>Impact on Business and Law Firms</strong></span></p><p><span style="color: #000000"></span></p><p><span style="color: #000000">Investors appear to view the report as a positive step forward, as Deutsche shares which have recently traded at record lows, were up 2% following the announcement. Overall it represents a shift away from more risky investment banking to mainstream banking management. Although Deutsche’s largest presence is in Germany, the shift could entail job losses in the UK and the US, where the bank has almost 20,000 employees in total. Deutsche previously slashed 7,000 jobs, many of which were located in London. If the measures are successful, they could be the turning point for a major financial institution who has suffered from a drastic fall from grace since 2008. However, despite the positive stock market response, some bank analysts argue that the plan is not enough and that it leaves Germany’s largest lender exposed to material losses that could ultimately lead to intervention by the ECB.</span></p></blockquote><p></p>
[QUOTE="Angel, post: 11642, member: 980"] Hi everyone! Welcome to this week's commercial news update! [B][COLOR=#0080ff]Commercial News Update – 19th June 2019[/COLOR][/B] [COLOR=#0059b3]The topics for this week are: 1.[B] Monzo’s US Launch[/B] (by [USER=1550]@Sairah[/USER]) 2. [B]Deustche's bad bank report[/B] ([USER=1643]@Moni[/USER]) 3. [B]London-Shanghai Stock Connect[/B] ([USER=1]@Jaysen[/USER]) 4. [B]Hong Kong’s Protest [/B]([USER=980]@Angel[/USER])[/COLOR] [COLOR=#000000]________________________________________________________________________________________________________________________________________________________________[/COLOR] [U][COLOR=rgb(0, 0, 0)] [B]Monzo’s US Launch[/B] ([USER=1550]@Sairah[/USER]) [/COLOR][/U] [COLOR=#000000] [B]The Story:[/B] Last Thursday, Monzo (one of the UK’s most well-known fintech start-ups) announced its expansion in the United States. The digital online-banking app which currently holds two million customers in the UK, will initially start up by holding sign-up events in Los Angeles for its couple thousand debit cards. To help with the US launch, Monzo has partnered with Ohio-based domestic lender, Sutton Bank. Despite its success in the UK, Monzo’s launch in the US will be a slow one. This is because the “lighter version” of the US mobile-banking app will not support popular features like Apple Pay or cash or check deposits. Also, American customers may not be able to fully trust Monzo at first if their banking services are not officially licensed and regulated in the US. [B]Impact on Businesses and Law Firms:[/B] Monzo will be entering a $7 trillion financial services sector meaning its expansion in the US will be a challenging venture. It will be up against America’s “big four” banks: JP Morgan Chase, Citigroup, Wells Fargo and Bank of America. In addition, Monzo will need to comply with both federal and state laws in the US. However, a new entrant like Monzo could prove a success in the long-term by promising customers a better ‘digital’ customer experience, shifting away from the US retail-banking market’s traditional practices. Since 2015, Monzo has caught the interest of many venture capital investors. It has raised over £200 million from investors including Accel, Thrive Capital and General Catalyst. Recently, Monzo reached its unicorn status (a start-up company valued at over £1 billion) following its recent round of funding last year. Due to the demand of neo-banks like Monzo, traditional banks are becoming under pressure to invest in FinTech solutions. This will provide more opportunities for law firms, as they will be placed to act for financial institutions such as advising on shared licenses with FinTech start-ups or even theacquisitions of start-ups This would expand the services provided by law firms in not only FinTech, but also IP and M&A.[/COLOR] ________________________________________________________________________________________________________________________________________________________________ [COLOR=#000000] [B][U]Deustche's bad bank report ([USER=1643]@Moni[/USER])[/U][/B] [B]The Story[/B] This week Deutsche Bank announced plans for a major restructuring including an overhaul of its trading operations by creating a ‘bad bank’ to hold ~ €50 billion euros of non-core assets, comprising mainly of long-dated derivatives. The restructuring will also include shrinking or shutting equity and rates trading businesses. Deutsche has struggled to generate profits since the financial crisis and its recent attempt at a merger with Commerzbank failed in April. The most recent plan appears to be part of the ‘tough cutbacks” CEO Christian Sewing recently promised shareholders. Deutsche has already made shifts to focus on more stable forms of revenue, and the cuts to its trading businesses are a further step in that direction. Moreover, the bank said that the measures are aimed improving its “sustainable profitability”. The CEO is expected to announce further measures in July, likely around the next earnings announcement. [B]Impact on Business and Law Firms[/B] Investors appear to view the report as a positive step forward, as Deutsche shares which have recently traded at record lows, were up 2% following the announcement. Overall it represents a shift away from more risky investment banking to mainstream banking management. Although Deutsche’s largest presence is in Germany, the shift could entail job losses in the UK and the US, where the bank has almost 20,000 employees in total. Deutsche previously slashed 7,000 jobs, many of which were located in London. If the measures are successful, they could be the turning point for a major financial institution who has suffered from a drastic fall from grace since 2008. However, despite the positive stock market response, some bank analysts argue that the plan is not enough and that it leaves Germany’s largest lender exposed to material losses that could ultimately lead to intervention by the ECB.[/COLOR] [/QUOTE]
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