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Tag Archives: Europe – UK

Collapse of Outsourcing Giant Carillion May Have Silver Lining

“Cash retentions” by large companies come under attack in the UK. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. The bankruptcy of UK outsourcing behemoth Carillion in January has left in its wake a trail of financial destruction and mayhem, but it may end up having a positive legacy. More than 200 British MPs (out of a total of 650) have backed a campaign to crack down on construction firms which, like Carillion, routinely pay their suppliers late to spruce up their...

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Credit-Cardholders & Bank Customers Burned Again as New IT Chaos Breaks Out in the UK

The payments industry deplores it, but cash is starting to look pretty good, and central banks agree: “We do not foresee a totally cashless society”: ECB By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. This has not been a good year for IT systems in the UK. First there was TSB Bank’s botched IT migration in April, which resulted in millions of customers being blocked from their online accounts. The problems at the bank continue to fester even to this day, 22 weeks...

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Why Are So Few Customers Leaving a Bank that Trampled on Them?

Despite months of IT mayhem and all kinds of problems, customers cling to TSB Bank in the UK. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. After months of self-inflicted IT chaos at mid-sized UK lender TSB, caused by botched data migration to a new IT system in April, things were supposed to have returned to some semblance of normality by now. But new problems keep cropping up. And once again, customers are feeling the brunt of the financial pain and inconvenience....

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Why Are ATMs Disappearing at an Alarming Rate after a Wave of Branch Closures?

Banks are curtailing “cash services.” But why? By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. In Australia, banks are reducing ATMs by about 8% a year. In the UK, ATMs — or cashpoint machines, as they’re termed locally — are disappearing at a rate of around 300 per month, leaving consumers in rural areas struggling to access cash, according to a new report by the consumers’ association, Which? The rate of closures has increased sixfold in the period from November 2017...

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“Hidden Debt Loophole Could be Widespread”: Fitch

Use of this financial instrument has ballooned. No one knows to what extent because there’s no disclosure. But it was a “key contributor” to the sudden collapse of outsourcing giant Carillion. As regulators and stiffed creditors were poking through the debris of collapsed outsourcing giant Carillion – once employing 43,000 people worldwide – they found that the UK company had hidden much of its debts. And Fitch Ratings warned that this “technique” – a “debt loophole” – may be...

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Banco Sabadell Begins to Pay the Price for TSB’s Self-Inflicted IT Fiasco

The horribly botched IT upgrade hits the income statement. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Spain’s Banco Sabadell on Friday announced a second-quarter loss of €139 million, including costs of €203 million related to the IT fiasco at its British subsidiary TSB. Those costs included €40 million euros from fraud losses and €92 million euros to cover future customer claims. The income statement reflects a 51% drop in results from financial operations, as...

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“Cliff Edge” Brexit Threatens $34 Trillion of Derivative Contracts: UK Regulator

A high-risk blinking contest no one wants to lose. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. A messy, no-deal Brexit could throw 48 million insurance contracts and £26 trillion ($34 trillion) of derivatives deals into confusion. Nausicaa Delfas, head of international strategy at the Financial Conduct Authority (FCA), told delegates at a CityUK and Bloomberg event that there were “cliff-edge” risks due to uncertainty over the legality of financial contracts...

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Under Fire, Biggest Brick & Mortar Retailers in Europe Seek Refuge in Cartel Economics 

It’s a brutal environment. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Two of the world’s biggest retail groups — France’s Carrefour and the UK’s Tesco — announced plans to form a global purchasing alliance to help drive down costs as they respond to fierce competition from German discounters and fast-growing online rivals such as Amazon. They are not the only supermarkets in Europe opting to combine resources in a bid to fend off new rivals. Struggling French...

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“Big Four” Audit Oligopoly Strikes Back at Plans to Break it Up

Auditors are still not auditing banks properly despite the crippling costs of the last banking crisis. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Deloitte, one of the so-called “Big Four” accountancy firms that have effectively cornered the global audit industry, has warned the UK government and regulators that any attempt to break up their oligopoly could backfire. Forcing the Big Four — which also include KPMG, PwC and EY — to split could harm Britain’s standing...

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What IBM Said about the IT Chaos at UK Bank TSB and Owner Sabadell, Now in its 12th Week

Contracted to fix the fiasco, IBM estimates costs at $1.25 billion: sources. There’s even talk of divorce, after just 3 years of corporate marriage. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. As the blame game intensifies over beleaguered UK lender TSB’s never-ending IT nightmare upgrade, now in its 12th week, relations between the bank’s management and that of its parent company, Spain’s Banco Sabadell, are beginning to sour. According to sources quoted by the...

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