The document discusses a roundtable meeting between local authorities, the Shadow Chief Secretary to the Treasury, and representatives from the UK Municipal Bonds Agency. The roundtable discussed the benefits of the newly created UKMBA, which allows local authorities to borrow and refinance debts at potentially lower interest rates than through the Public Works Loan Board. Creating a municipal bonds market could give local authorities greater financial autonomy and fiscal control. However, some local authorities remain hesitant due to risks. Encouraging broader participation from local authorities will help establish the municipal bonds market and lower borrowing costs.
The document discusses the path to greater regional devolution in the UK. It summarizes the key discussions from a roundtable on devolving powers from central government to local authorities. Some of the main points discussed include:
- Local authorities are facing significant budget cuts but are being asked to provide more services. They need greater powers to both spend funds freely and raise their own revenue to sustain services.
- While some spending powers have been decentralized, true fiscal devolution that involves transferring tax raising abilities has not occurred and is still unpopular. Additional revenue raising abilities are needed for local authorities to meet challenges.
- Local authorities already have some limited powers to borrow, charge for services, and raise taxes like council tax but
The document discusses the need for transformation of commissioning and procurement processes in English local government. It outlines the current financial challenges and notes that local councils will need to reduce costs significantly while relying more on external organizations to deliver services. The transformation process should focus on five key themes: new service models, managing risk versus risk aversion, shaping markets, looking ahead not back, and improved contract management. Savings could be achieved through leveraging collective purchasing power across local councils and improving management of contracts once awarded.
This document summarizes the findings of a survey on shared services conducted with 150 senior local authority managers in England. Some key findings include:
- 89% of local authorities currently share back office functions, frontline services, or both with other public bodies.
- 65% plan to increase sharing of back office functions in the next year and 89% in the next two years. 68% plan increased frontline sharing in the next year and 91% in the next two years.
- Environmental services and social care were most commonly identified as frontline areas for future sharing.
The survey found growing willingness among local authorities to explore new partnerships and delivery models for services, including increased openness to working with the private sector.
Our changing state: the realities of austerity and devolutionBrowne Jacobson LLP
One year on from our first roundtable and follow up report ‘The Path to Greater Regional Devolution’, the ‘devolution revolution’ has moved on considerably. Since February 2015 we have seen the Government’s Cities and Local Government Devolution Bill receive Royal Assent, a national programme of area-based reviews of post 16 education and training as part of the Government’s ‘skills devolution’ agenda and the announcement that Cornwall is to become the first rural authority in England to agree a devolution deal.
This period of unprecedented change raises a series of complex challenges, risks and concerns that demand further consideration, discussion and debate. Since the May 2015 General Election devolution deals with more than seven areas have been agreed so will local government structures become more confusing after devolution? What effect will this have on accountability? What conflicts will there be between the new combined authorities and existing local authority arrangements? What lessons can we learn from Welsh devolution? The Government has expressed a desire for greater fiscal devolution but is this realistic?
Chaired by Sir Paul Jenkins, the former Treasury Solicitor, our second roundtable on devolution discussed these issues and many more with local and central government leaders, policy influencers and stakeholders including Centre for Cities, Department for Transport, Grant Thornton, Lawyers in Local Government, LGiU, Local Government Ombudsman, Nottinghamshire Fire & Rescue, Staffordshire County Council, The Department for Communities and Local Government, The Financial Times, The National Forest Company and The Welsh Government.
Our second report, Our Changing State: the Realities of Austerity and Devolution, summarises the key themes and thoughts that emerged from the roundtable and proposes a series of recommendations for further discussion and consideration by both local authorities and other key stakeholders as the country continues along the path towards even greater regional devolution.
https://www.brownejacobson.com/training-and-resources/resources/legal-updates/2016/04/the-realities-of-austerity-and-devolution
The document summarizes a survey conducted by Localis, an independent think tank focused on local government issues in the UK. The survey asked finance directors of local authorities in England about the impact of the recent Comprehensive Spending Review (CSR) budget cuts. Key findings included: 1) Finance directors were surprised by the front-loading of cuts in the first year. 2) Authorities will have to pursue options like outsourcing, merging services, and staff cuts to achieve the required savings. 3) Adult social care is seen as the most at-risk service despite extra funding.
Public-private partnerships (PPPs) have proven effective for infrastructure projects globally over the last ten years according to a new RICS report. However, additional government and industry support is needed to improve frameworks and future success rates. An estimated $500 trillion is needed for global infrastructure until 2030, so PPPs will continue playing an essential role in addressing the infrastructure "investment gap." The report suggests establishing best practices to ensure successful provision of PPPs going forward.
The document discusses 8 proposals for improving and financing infrastructure in the United States: 1) Create a national infrastructure bank, 2) Make TIGER grants permanent, 3) Expand existing financing tools like TIFIA, 4) Privatize surface infrastructure, seaports and airports, 5) Promote public-private partnerships, 6) Remove hurdles to privatization, 7) Allow tolling of existing interstate highways, 8) Get the federal government out of the way and give more control to states. For each proposal the document provides a brief overview and notes some support and opposition.
The document discusses the path to greater regional devolution in the UK. It summarizes the key discussions from a roundtable on devolving powers from central government to local authorities. Some of the main points discussed include:
- Local authorities are facing significant budget cuts but are being asked to provide more services. They need greater powers to both spend funds freely and raise their own revenue to sustain services.
- While some spending powers have been decentralized, true fiscal devolution that involves transferring tax raising abilities has not occurred and is still unpopular. Additional revenue raising abilities are needed for local authorities to meet challenges.
- Local authorities already have some limited powers to borrow, charge for services, and raise taxes like council tax but
The document discusses the need for transformation of commissioning and procurement processes in English local government. It outlines the current financial challenges and notes that local councils will need to reduce costs significantly while relying more on external organizations to deliver services. The transformation process should focus on five key themes: new service models, managing risk versus risk aversion, shaping markets, looking ahead not back, and improved contract management. Savings could be achieved through leveraging collective purchasing power across local councils and improving management of contracts once awarded.
This document summarizes the findings of a survey on shared services conducted with 150 senior local authority managers in England. Some key findings include:
- 89% of local authorities currently share back office functions, frontline services, or both with other public bodies.
- 65% plan to increase sharing of back office functions in the next year and 89% in the next two years. 68% plan increased frontline sharing in the next year and 91% in the next two years.
- Environmental services and social care were most commonly identified as frontline areas for future sharing.
The survey found growing willingness among local authorities to explore new partnerships and delivery models for services, including increased openness to working with the private sector.
Our changing state: the realities of austerity and devolutionBrowne Jacobson LLP
One year on from our first roundtable and follow up report ‘The Path to Greater Regional Devolution’, the ‘devolution revolution’ has moved on considerably. Since February 2015 we have seen the Government’s Cities and Local Government Devolution Bill receive Royal Assent, a national programme of area-based reviews of post 16 education and training as part of the Government’s ‘skills devolution’ agenda and the announcement that Cornwall is to become the first rural authority in England to agree a devolution deal.
This period of unprecedented change raises a series of complex challenges, risks and concerns that demand further consideration, discussion and debate. Since the May 2015 General Election devolution deals with more than seven areas have been agreed so will local government structures become more confusing after devolution? What effect will this have on accountability? What conflicts will there be between the new combined authorities and existing local authority arrangements? What lessons can we learn from Welsh devolution? The Government has expressed a desire for greater fiscal devolution but is this realistic?
Chaired by Sir Paul Jenkins, the former Treasury Solicitor, our second roundtable on devolution discussed these issues and many more with local and central government leaders, policy influencers and stakeholders including Centre for Cities, Department for Transport, Grant Thornton, Lawyers in Local Government, LGiU, Local Government Ombudsman, Nottinghamshire Fire & Rescue, Staffordshire County Council, The Department for Communities and Local Government, The Financial Times, The National Forest Company and The Welsh Government.
Our second report, Our Changing State: the Realities of Austerity and Devolution, summarises the key themes and thoughts that emerged from the roundtable and proposes a series of recommendations for further discussion and consideration by both local authorities and other key stakeholders as the country continues along the path towards even greater regional devolution.
https://www.brownejacobson.com/training-and-resources/resources/legal-updates/2016/04/the-realities-of-austerity-and-devolution
The document summarizes a survey conducted by Localis, an independent think tank focused on local government issues in the UK. The survey asked finance directors of local authorities in England about the impact of the recent Comprehensive Spending Review (CSR) budget cuts. Key findings included: 1) Finance directors were surprised by the front-loading of cuts in the first year. 2) Authorities will have to pursue options like outsourcing, merging services, and staff cuts to achieve the required savings. 3) Adult social care is seen as the most at-risk service despite extra funding.
Public-private partnerships (PPPs) have proven effective for infrastructure projects globally over the last ten years according to a new RICS report. However, additional government and industry support is needed to improve frameworks and future success rates. An estimated $500 trillion is needed for global infrastructure until 2030, so PPPs will continue playing an essential role in addressing the infrastructure "investment gap." The report suggests establishing best practices to ensure successful provision of PPPs going forward.
The document discusses 8 proposals for improving and financing infrastructure in the United States: 1) Create a national infrastructure bank, 2) Make TIGER grants permanent, 3) Expand existing financing tools like TIFIA, 4) Privatize surface infrastructure, seaports and airports, 5) Promote public-private partnerships, 6) Remove hurdles to privatization, 7) Allow tolling of existing interstate highways, 8) Get the federal government out of the way and give more control to states. For each proposal the document provides a brief overview and notes some support and opposition.
The document discusses non-performing loans (NPLs) in China's banking system. In the 1980s and 1990s, state-owned enterprises (SOEs) accumulated large debts from banks that they struggled to repay, resulting in over 30% of banking assets being NPLs. In 1999, China created asset management companies (AMCs) to take NPLs from banks, but the AMCs have conflicting mandates and have not been financially sustainable. While NPLs have declined at major banks, they remain high across China's financial system, and new NPLs may emerge from recent economic stimulus programs.
HML's October 2014 Commercial Bulletin contains all of the key economic data from the month, including the 6% unemployment rate, the European Union bill and the latest update from the financial sector.
Efficient remittance services can significantly impact development by reducing trade imbalances. The Bangladesh government has established programs like exchange houses abroad and electronic funds transfer networks to facilitate remittances. Mobile financial services are now the easiest way for financial transactions but low-wage workers abroad cannot access them as they are linked to bank accounts. Regulators in remitting countries could allow exchange houses to provide mobile financial services to wage remitters. The Bangladesh government also encourages inward remittance flows by awarding Commercially Important Person designations to non-resident Bangladeshis and introducing awards for top remitters. It further encourages remitters to invest their savings in the country through various investment schemes.
This document discusses the importance of harmonizing regulations for international remittances. It notes that Bangladesh relies heavily on remittances from expatriate workers to fuel economic development. While banks provide remittance services, their fees are not reasonable for low-wage workers. Exchange houses and money transfer organizations (MTOs) fill this gap by providing more affordable services, though they rely on banks for settlements. To further facilitate cross-border remittances, regulatory frameworks need coordinated harmonization across countries regarding the transaction nature, services allowed, and reporting systems for exchange houses and MTOs. While harmonizing regulations globally poses challenges, setting up an international coordinating body could help overcome them.
This document summarizes a paper that examines whether regional trade agreements (RTAs) that include provisions for liberalizing trade in services act as "building blocks" or "stumbling blocks" for multilateral liberalization of services.
It begins by defining the four modes of services trade and noting that a significant portion of services trade occurs through foreign direct investment and commercial presence. It then reviews the features and liberalization achieved in recent RTAs involving services. Overall discrimination established in these agreements has been relatively modest, possibly due to political economy factors.
The document concludes that RTAs in services may be more likely to act as building blocks for multilateral liberalization compared to RTAs involving goods. However, certain forms of regional
The document summarizes a speech given by Mark Carney, Governor of the Bank of England. The key points are:
1) Carney announces that the Bank of England intends to extend direct access to its real-time gross settlement system (RTGS) to non-bank payment service providers, allowing them to compete on equal footing with banks.
2) This is aimed at increasing competition, innovation, and inclusion in payments, as consumers demand faster, more accessible payments. Safeguards will be put in place to ensure resilience.
3) The Bank is also open to providing central bank money access for new forms of wholesale securities settlement, such as those using distributed ledger technology, to increase efficiency in this
20160128 Kamiya. Municipal Finance and the New Urban AgendaMarco Kamiya
1) Municipal finance systems in many developing countries have unclear rules, inefficient expenditure assignments, small revenue generation, and poor financial management.
2) UN-HABITAT aims to help by developing financial management tools, training municipalities on finance and urban planning, enhancing legal frameworks, and advising governments.
3) The document discusses four key issues facing municipal finance - expenditures and infrastructure costs, unclear rules and capacities, limited revenues, and challenges with city extensions - and UN-HABITAT's role in addressing each.
This document proposes replacing the current US housing finance system with state-sponsored enterprises (SSEs) that would localize homeowner credit risk management. It argues that local governments are best suited to assess credit risk in their communities and should play an active role in a new housing system. The document suggests having SSEs at the state and local level that would take on functions similar to Fannie Mae and Freddie Mac but make credit decisions locally rather than nationally. This would help compartmentalize economic problems and prevent failures in one area from collapsing the entire system.
This document summarizes a panel discussion on trends in the commercial real estate finance industry. It discusses current market trends such as lending volumes, interest rates, and the expansion of alternative lenders. Regulatory topics covered include potential reforms to Dodd-Frank and the future of Fannie Mae and Freddie Mac. Infrastructure spending, tax reform proposals, and foreign investment in US real estate are also summarized. Survey results from CREFC members gauge sentiment on issues like loan origination volumes and concerns around geopolitical and economic factors.
Constituency dev fund cdf study whats wrongBhim Upadhyaya
CDFs allow MPs to directly allocate and spend funds in their constituencies, bypassing traditional budget processes. However, CDFs have several negative effects:
1. They breach the separation of powers by giving legislative bodies executive budget functions.
2. They can weaken government capacity by fragmenting planning and oversight, skewing resources based on political interests rather than need, and potentially displacing local government funds.
3. They compromise the legislature's ability to oversee the executive by involving MPs directly in budget execution rather than oversight. Overall, CDFs undermine accountability and priorities of service delivery.
20141215 Councils pool resources to make borrowing cheaper for one another - ...Markus Krebsz
The UK's first municipal bonds agency has moved closer to launching, with 48 councils signed up to invest. The agency will allow councils to borrow more cheaply for infrastructure projects as an alternative to the Treasury-controlled Public Works Loans Board. Councils could save over £1 billion in borrowing costs over 30 years if half their debt transfers to the new agency. Council investors must finalize their investments by the end of February 2015 for the agency to issue its first bond.
The document provides an executive summary of an international evidence review on local taxation systems conducted for the Commission on Local Tax Reform in Scotland. Key findings of the review include:
1) Property taxes are widely used internationally but other local taxes like income taxes are also common, unlike the UK's sole reliance on council tax.
2) Property tax designs vary greatly and reforms often aim to address fairness, revenue needs, or simplification.
3) Successful reforms phase changes gradually, address liquidity issues, and improve services alongside tax changes to boost public support.
4) The council tax system in the UK has design flaws and its problems could have been foreseen based on international evidence on challenges with property tax reforms.
This document analyzes the efficiency of commercial banks in Tanzania from 2008 to 2011 using data envelopment analysis. It finds that large banks were more efficient than small banks over this period, with technical efficiency ranging from 54-79% for large banks and 65-70% for small banks. Under variable return to scale, large banks had higher pure technical efficiency levels than small banks, though both experienced declining efficiency from 2008 to 2011. The document concludes that inefficient use of resources contributed to the relatively low efficiency of commercial banks in Tanzania and that banks could improve by better utilizing existing resources and reducing operating expenses.
The document discusses local economic growth in the UK. Key points:
- Three quarters of local government leaders see economic growth as the most critical issue over the next 5 years.
- Local growth schemes are seen as more effective than national schemes by local leaders.
- Local Enterprise Partnerships set up to boost growth have had mixed effectiveness, with 44% of leaders saying they've not boosted growth. A lack of funding is a key barrier.
- Councils are well placed to drive local growth but have faced funding cuts, limiting their ability to invest in infrastructure, skills, and business support. Greater funding autonomy and freedom are needed for councils to fulfill their growth role.
Unsgsa opening remarks at the annual meeting of global financial standard s...Dr Lendy Spires
1) The speaker thanks the organizations for meeting again to advance financial inclusion goals and notes increased global awareness and action on the issue in the past year.
2) During visits to many countries, the speaker observed high levels of financial exclusion and a need for innovative solutions to expand access to formal financial services. National strategies are being developed.
3) Better measurement of financial inclusion is needed to understand its effects on development and stability and inform effective policymaking. Momentum is growing at both the national and international levels.
This document is a letter from the Fulton County Federal Credit Union commenting on the NCUA's proposed risk-based capital rule. It raises several concerns with the proposal, including that it exceeds the NCUA's authority, sets risk weights that do not properly reflect credit unions' lower historic risks compared to small banks, fails to consider credit unions' unique inability to access capital markets, and would negatively impact rural and low-income communities. It encourages the NCUA board to address these issues before finalizing the rule and to give credit unions more than the proposed 18 months to comply.
Future of Financial Services - Banking on Innovation - Final PaperJohn Fearn
This document discusses the political barriers to innovative financial services. It argues that while radical change in any sector poses challenges for politicians and regulators, the pace of financial innovation is leaving policymakers behind. It analyzes the political reputations of alternative finance providers, payments services, and high street banks to identify the challenges these firms face in influencing regulation. The document predicts that in the near future, most transactions will be digital, mobile payments will increase, and banking services will fragment across new providers, with 20% of lending from alternative sources. It argues that widespread mobile adoption and the 2007-2009 financial crisis have enabled this radical change by shifting consumer habits and eroding trust in large banks.
The document summarizes opportunities for engaging Tanzania's diaspora given the country's economic and financial development over the past 50 years. Specifically:
1) Tanzania has achieved macroeconomic stability and strong GDP growth following financial sector reforms in the 1990s.
2) This stability and ongoing reforms to infrastructure, agriculture, and business environment present opportunities for diaspora engagement through investments, remittances, and trade.
3) The government is taking further measures to deepen financial markets and ease access for diaspora investments in areas like housing, SMEs, and government securities.
The document provides an overview of China's 12th five-year plan covering 2011-2015. The plan aims to rebalance China's economy toward more sustainable growth, including increasing household income and private consumption. It will target large state-owned enterprises that enjoy monopolies by limiting their margins, increasing competition, capping executive wages, and reducing economic rents. The plan also identifies seven strategic emerging industries that will receive government support such as renewable energy and new technologies.
These two slides give an overview of the the total global Structured finance bond downgrades since January 2007. Furthermore, they show the split between US and Europe. Slides have been shown at the Global ABS Investors\' & Regulators\' roundtable, 2/3 June 2009. Underlying data has been compiled from Bloomberg\'s <RATT> function.
The document discusses the rationale for establishing a UK municipal bond agency. Key points include:
- The agency aims to lower borrowing costs for local councils by accessing funding at competitive rates from bond markets.
- No additional legislation is required, as councils have the necessary borrowing powers.
- 56 councils have signed up as initial shareholders, investing a total of £6 million to launch the agency.
- The agency expects to break even within 3 years at a lending volume of £2 billion, and will be run on a cost of around £2 million per year.
- The agency will subject councils to a credit process and aims to offer rates competitive with the Public Works Loan Board.
The document discusses non-performing loans (NPLs) in China's banking system. In the 1980s and 1990s, state-owned enterprises (SOEs) accumulated large debts from banks that they struggled to repay, resulting in over 30% of banking assets being NPLs. In 1999, China created asset management companies (AMCs) to take NPLs from banks, but the AMCs have conflicting mandates and have not been financially sustainable. While NPLs have declined at major banks, they remain high across China's financial system, and new NPLs may emerge from recent economic stimulus programs.
HML's October 2014 Commercial Bulletin contains all of the key economic data from the month, including the 6% unemployment rate, the European Union bill and the latest update from the financial sector.
Efficient remittance services can significantly impact development by reducing trade imbalances. The Bangladesh government has established programs like exchange houses abroad and electronic funds transfer networks to facilitate remittances. Mobile financial services are now the easiest way for financial transactions but low-wage workers abroad cannot access them as they are linked to bank accounts. Regulators in remitting countries could allow exchange houses to provide mobile financial services to wage remitters. The Bangladesh government also encourages inward remittance flows by awarding Commercially Important Person designations to non-resident Bangladeshis and introducing awards for top remitters. It further encourages remitters to invest their savings in the country through various investment schemes.
This document discusses the importance of harmonizing regulations for international remittances. It notes that Bangladesh relies heavily on remittances from expatriate workers to fuel economic development. While banks provide remittance services, their fees are not reasonable for low-wage workers. Exchange houses and money transfer organizations (MTOs) fill this gap by providing more affordable services, though they rely on banks for settlements. To further facilitate cross-border remittances, regulatory frameworks need coordinated harmonization across countries regarding the transaction nature, services allowed, and reporting systems for exchange houses and MTOs. While harmonizing regulations globally poses challenges, setting up an international coordinating body could help overcome them.
This document summarizes a paper that examines whether regional trade agreements (RTAs) that include provisions for liberalizing trade in services act as "building blocks" or "stumbling blocks" for multilateral liberalization of services.
It begins by defining the four modes of services trade and noting that a significant portion of services trade occurs through foreign direct investment and commercial presence. It then reviews the features and liberalization achieved in recent RTAs involving services. Overall discrimination established in these agreements has been relatively modest, possibly due to political economy factors.
The document concludes that RTAs in services may be more likely to act as building blocks for multilateral liberalization compared to RTAs involving goods. However, certain forms of regional
The document summarizes a speech given by Mark Carney, Governor of the Bank of England. The key points are:
1) Carney announces that the Bank of England intends to extend direct access to its real-time gross settlement system (RTGS) to non-bank payment service providers, allowing them to compete on equal footing with banks.
2) This is aimed at increasing competition, innovation, and inclusion in payments, as consumers demand faster, more accessible payments. Safeguards will be put in place to ensure resilience.
3) The Bank is also open to providing central bank money access for new forms of wholesale securities settlement, such as those using distributed ledger technology, to increase efficiency in this
20160128 Kamiya. Municipal Finance and the New Urban AgendaMarco Kamiya
1) Municipal finance systems in many developing countries have unclear rules, inefficient expenditure assignments, small revenue generation, and poor financial management.
2) UN-HABITAT aims to help by developing financial management tools, training municipalities on finance and urban planning, enhancing legal frameworks, and advising governments.
3) The document discusses four key issues facing municipal finance - expenditures and infrastructure costs, unclear rules and capacities, limited revenues, and challenges with city extensions - and UN-HABITAT's role in addressing each.
This document proposes replacing the current US housing finance system with state-sponsored enterprises (SSEs) that would localize homeowner credit risk management. It argues that local governments are best suited to assess credit risk in their communities and should play an active role in a new housing system. The document suggests having SSEs at the state and local level that would take on functions similar to Fannie Mae and Freddie Mac but make credit decisions locally rather than nationally. This would help compartmentalize economic problems and prevent failures in one area from collapsing the entire system.
This document summarizes a panel discussion on trends in the commercial real estate finance industry. It discusses current market trends such as lending volumes, interest rates, and the expansion of alternative lenders. Regulatory topics covered include potential reforms to Dodd-Frank and the future of Fannie Mae and Freddie Mac. Infrastructure spending, tax reform proposals, and foreign investment in US real estate are also summarized. Survey results from CREFC members gauge sentiment on issues like loan origination volumes and concerns around geopolitical and economic factors.
Constituency dev fund cdf study whats wrongBhim Upadhyaya
CDFs allow MPs to directly allocate and spend funds in their constituencies, bypassing traditional budget processes. However, CDFs have several negative effects:
1. They breach the separation of powers by giving legislative bodies executive budget functions.
2. They can weaken government capacity by fragmenting planning and oversight, skewing resources based on political interests rather than need, and potentially displacing local government funds.
3. They compromise the legislature's ability to oversee the executive by involving MPs directly in budget execution rather than oversight. Overall, CDFs undermine accountability and priorities of service delivery.
20141215 Councils pool resources to make borrowing cheaper for one another - ...Markus Krebsz
The UK's first municipal bonds agency has moved closer to launching, with 48 councils signed up to invest. The agency will allow councils to borrow more cheaply for infrastructure projects as an alternative to the Treasury-controlled Public Works Loans Board. Councils could save over £1 billion in borrowing costs over 30 years if half their debt transfers to the new agency. Council investors must finalize their investments by the end of February 2015 for the agency to issue its first bond.
The document provides an executive summary of an international evidence review on local taxation systems conducted for the Commission on Local Tax Reform in Scotland. Key findings of the review include:
1) Property taxes are widely used internationally but other local taxes like income taxes are also common, unlike the UK's sole reliance on council tax.
2) Property tax designs vary greatly and reforms often aim to address fairness, revenue needs, or simplification.
3) Successful reforms phase changes gradually, address liquidity issues, and improve services alongside tax changes to boost public support.
4) The council tax system in the UK has design flaws and its problems could have been foreseen based on international evidence on challenges with property tax reforms.
This document analyzes the efficiency of commercial banks in Tanzania from 2008 to 2011 using data envelopment analysis. It finds that large banks were more efficient than small banks over this period, with technical efficiency ranging from 54-79% for large banks and 65-70% for small banks. Under variable return to scale, large banks had higher pure technical efficiency levels than small banks, though both experienced declining efficiency from 2008 to 2011. The document concludes that inefficient use of resources contributed to the relatively low efficiency of commercial banks in Tanzania and that banks could improve by better utilizing existing resources and reducing operating expenses.
The document discusses local economic growth in the UK. Key points:
- Three quarters of local government leaders see economic growth as the most critical issue over the next 5 years.
- Local growth schemes are seen as more effective than national schemes by local leaders.
- Local Enterprise Partnerships set up to boost growth have had mixed effectiveness, with 44% of leaders saying they've not boosted growth. A lack of funding is a key barrier.
- Councils are well placed to drive local growth but have faced funding cuts, limiting their ability to invest in infrastructure, skills, and business support. Greater funding autonomy and freedom are needed for councils to fulfill their growth role.
Unsgsa opening remarks at the annual meeting of global financial standard s...Dr Lendy Spires
1) The speaker thanks the organizations for meeting again to advance financial inclusion goals and notes increased global awareness and action on the issue in the past year.
2) During visits to many countries, the speaker observed high levels of financial exclusion and a need for innovative solutions to expand access to formal financial services. National strategies are being developed.
3) Better measurement of financial inclusion is needed to understand its effects on development and stability and inform effective policymaking. Momentum is growing at both the national and international levels.
This document is a letter from the Fulton County Federal Credit Union commenting on the NCUA's proposed risk-based capital rule. It raises several concerns with the proposal, including that it exceeds the NCUA's authority, sets risk weights that do not properly reflect credit unions' lower historic risks compared to small banks, fails to consider credit unions' unique inability to access capital markets, and would negatively impact rural and low-income communities. It encourages the NCUA board to address these issues before finalizing the rule and to give credit unions more than the proposed 18 months to comply.
Future of Financial Services - Banking on Innovation - Final PaperJohn Fearn
This document discusses the political barriers to innovative financial services. It argues that while radical change in any sector poses challenges for politicians and regulators, the pace of financial innovation is leaving policymakers behind. It analyzes the political reputations of alternative finance providers, payments services, and high street banks to identify the challenges these firms face in influencing regulation. The document predicts that in the near future, most transactions will be digital, mobile payments will increase, and banking services will fragment across new providers, with 20% of lending from alternative sources. It argues that widespread mobile adoption and the 2007-2009 financial crisis have enabled this radical change by shifting consumer habits and eroding trust in large banks.
The document summarizes opportunities for engaging Tanzania's diaspora given the country's economic and financial development over the past 50 years. Specifically:
1) Tanzania has achieved macroeconomic stability and strong GDP growth following financial sector reforms in the 1990s.
2) This stability and ongoing reforms to infrastructure, agriculture, and business environment present opportunities for diaspora engagement through investments, remittances, and trade.
3) The government is taking further measures to deepen financial markets and ease access for diaspora investments in areas like housing, SMEs, and government securities.
The document provides an overview of China's 12th five-year plan covering 2011-2015. The plan aims to rebalance China's economy toward more sustainable growth, including increasing household income and private consumption. It will target large state-owned enterprises that enjoy monopolies by limiting their margins, increasing competition, capping executive wages, and reducing economic rents. The plan also identifies seven strategic emerging industries that will receive government support such as renewable energy and new technologies.
These two slides give an overview of the the total global Structured finance bond downgrades since January 2007. Furthermore, they show the split between US and Europe. Slides have been shown at the Global ABS Investors\' & Regulators\' roundtable, 2/3 June 2009. Underlying data has been compiled from Bloomberg\'s <RATT> function.
The document discusses the rationale for establishing a UK municipal bond agency. Key points include:
- The agency aims to lower borrowing costs for local councils by accessing funding at competitive rates from bond markets.
- No additional legislation is required, as councils have the necessary borrowing powers.
- 56 councils have signed up as initial shareholders, investing a total of £6 million to launch the agency.
- The agency expects to break even within 3 years at a lending volume of £2 billion, and will be run on a cost of around £2 million per year.
- The agency will subject councils to a credit process and aims to offer rates competitive with the Public Works Loan Board.
This document provides a progress report on the activities of the Group of Experts on Managing Risks in Regulatory Systems (GRM) from August 2014 to September 2015. It summarizes the GRM's work to broaden the application of risk management recommendations across various sectors and fields. This included developing a methodology for implementing recommendations in specific sectors and strengthening partnerships with organizations like UNISDR. The GRM also worked on applying recommendations to disaster risk reduction and contributed to international conferences on the topic. Annexed is an updated list of GRM members from different regions and areas of expertise.
This document provides an overview of the contents of The Professional Risk Managers' Handbook, which is a comprehensive guide to current theory and best practices in risk management. The handbook covers topics in finance theory, financial instruments, and financial markets across two volumes. It includes sections on financial theory application, portfolio mathematics, capital allocation, asset pricing models, capital structure, the term structure of interest rates, bonds, forwards and futures, swaps, options, credit derivatives, and interest rate options. The handbook is intended as a reference for the PRM designation exam.
The document discusses how the United Nations Economic Commission for Europe (UNECE) works to promote disaster risk reduction and resilience. It outlines several key activities:
1) UNECE sets binding rules and standards to contribute to more sustainable development that is resilient to disasters.
2) It promotes implementation of international risk management standards and tools.
3) Through various environmental treaties and programs, UNECE facilitates transboundary cooperation between countries to better prevent, prepare for, and respond to disasters.
4) UNECE also works to integrate disaster risk reduction into urban planning, housing, and land management policies to build more resilient communities.
Bond agency happy with ratings _ Room 151Markus Krebsz
The bond agency has received ratings from two ratings agencies and is ready to issue its first bond. The CEO expressed that he was happy with the ratings but did not disclose them. He said they are waiting for local authorities to approve borrowing through internal processes before issuing a bond within a few weeks at a rate below current PWLB rates. However, the CEO was reluctant to commit to an issuance date given delays in the past.
Imperial College 2016 Brochure Finance-Short-ProgrammesMarkus Krebsz
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This document provides a bibliography of 33 editions on works related to the global financial/economic crisis from 2008. It is divided into 11 sections that cover topics such as the origins of the crisis, empirical and narrative accounts, the housing and mortgage industry collapse, regulatory failures, the impact on various countries/regions, and normative perspectives on implications and reforms. The bibliography contains over 200 cited works ranging from books, reports, to academic literature.
The document discusses the need for transformation of commissioning and procurement processes in English local government. It outlines the current financial challenges and notes that local councils will need to reduce costs significantly while relying more on external organizations to deliver services. The transformation process should focus on five key themes: new service models, managing risk versus risk aversion, shaping markets, looking ahead not back, and improved contract management. Savings could be achieved through leveraging collective purchasing power across local councils and improving management of contracts once awarded.
This document proposes the National Wealth Service (NWS) model as a solution to rebuilding community infrastructure in the UK. The NWS would bring together the public sector, investors, and businesses to fund affordable housing, healthcare, education, and other community projects. It aims to address issues identified with the Private Finance Initiative (PFI) by establishing a national fund underpinned by central and local government support. The model is presented as reducing complexity, duplication and waste compared to current systems. It also aims to attract more institutional investment by establishing community infrastructure as a distinct asset class. The document argues the NWS would benefit communities through job creation, use of renewable energy, and regeneration of local areas.
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This document discusses alternative models for achieving local government financial sustainability. It argues that the focus should be on sustainability of the communities local governments serve, not just the financial sustainability of councils themselves. Considering community sustainability has implications, like councils facilitating other institutions that support communities and reduce long-term burdens on councils. The document also distinguishes between a council's provision of services and production of services, with alternative models like California taking production out of council control through contracting.
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India’s economic growth rates higher than most developed countries in recent years, a
majority of the country’s population still residue unbanked. Financial Inclusion is a relatively
new socio-economic concept in India that aspire to change this dynamic by providing
financial services at affordable costs to the underprivileged, who might not otherwise be
aware of or able to afford these services. Global trends have revealed that in order to achieve
inclusive development and growth, the expansion of financial services to all sections of society
is of utmost importance. As a whole, financial inclusion in the rural as well as financially
backward pockets of cities is a win-win opportunity for everybody involving – the
banks/NBFC’s intermediaries, and the left-out urban population. Banks will handle core
infrastructure and services while intermediaries known as Business Correspondents (BC’s)
will be the executors and act as the face of these banking & financial institutions in dealing
with end-users. Therefore, it is assumed that financial inclusion can initiate the next
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levers to advance financial inclusion and economic citizenship by channelling its own
transactions to lubricate the system. India’s journey towards economic ascension relies on
how the 65% unbanked population of India (conservative 2012 estimate by World Bank) is
enabled with financial infrastructure.
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Development and finance go hand in hand. It is difficult for a country to develop without finance. However, what is the new perception of development? Clearly it seems to encompass more than just economic figures. And what is the role of the Law and institutions such as the Central Bank in attaining development. With this presentation, I expound on this questions.
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E Usinger - Using NMTCs to Finance Commercial Real Estate (ABA Journal -...Eric Usinger
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FULL TITLE:
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ROOM: Tsavo A
Translated session: English & French
PANEL:
Chair: Mr. Wolday Amha, Executive Director, Association of Ethiopian Microfinance Institution (AEMFI), Ethiopia
Panelist: Mr. Issa Barro, Inclusive Finance Specialist, United Nations Capital Development Fund (UNCDF), Senegal
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Analysis of mines and minerals amendment bill 2007 versionZELA2013
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Devolution from central to local government - managing the riskBrowne Jacobson LLP
Local authorities face significant risks from the devolution of powers from central government to local levels. As services are remodeled and greater collaboration pursued, authorities must ensure strong leadership, governance, and risk management to balance opportunities and challenges. In particular, the increasingly complex relationships between organizations and changing risk profiles require innovation to adequately manage risks arising from devolved responsibilities. Proper consideration of these issues is needed to successfully transition to new models of service delivery.
This document provides a simple introduction to improving efficiency in the culture and sport sector through better utilization of existing assets and asset transfer to different delivery partners. It discusses how asset management and community asset transfers can strengthen communities and local services. Critical success factors for asset transfers include embracing the concept at a senior level, taking a strategic approach, establishing a comprehensive asset overview, involving the community, and ensuring genuine partnership between the community and council.
This document provides a progress report on the activities of the UNECE Group of Experts on Managing Risks in Regulatory Systems (GRM) as of September 2016. It outlines the GRM's development of risk management methodologies and recommendations, implementation of recommendations through field projects, and contributions to the risk management work of other international organizations. It proposes continuing the GRM's work to assist regulatory authorities in applying risk management tools to support the UN Sustainable Development Goals.
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The document provides an overview of classic credit products and their building blocks, including:
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- The most important instruments are discussed in detail, such as bonds, loans, and structured products like collateralized debt obligations.
- Different types of bonds, loans, and their key characteristics are defined.
150602 IMPERIAL PRMIA Student Event (Attendees) Markus Krebsz
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2) The agency believes it can lend at a spread of 55-60 basis points over gilts in the next 2-3 years, compared to the current rate of 80 basis points over gilts.
3) Whether the agency can achieve this rate will depend on its credit rating, with similar European agencies rated just below their respective sovereign ratings.
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Unleashing Municipal Enterprise discusses empowering local governments in the UK to stimulate economic growth through "Municipal Enterprise". It argues that overly centralized control has stifled local initiative and innovation. Municipal Enterprise involves local governments undertaking commercial ventures, often in partnership with private sector, to address local economic and community challenges. By taking risks and sharing in rewards, Municipal Enterprise could help boost local job creation and address issues like developing digital infrastructure, in a way that generates profits to repay initial investments. The paper explores how a more balanced approach adapting this concept could help address current economic issues in the UK in the digital era.
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Slides as presented at the Inaugural ESRC People Risk Seminar at the Centre for Risk, Banking & Financial Services at Nottingham University Business School, 4 Dec 2013, Nottingham.
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Presented at the Scottish Financial Risk Academy's Inaugural Risk Colloquium on 4th Nov 2010 in Edinburgh. (Also published as CRA comment on the SEC website).
Global Financial Markets & The Recent Credit Crisis: Impressions from a Perso...Markus Krebsz
This presentation in two parts was given at a Royal Holloway University London (RHUL) event on 22 March 2012. Part 1 covers CRAs and Part 2 covered career tips for students interested in the financial markets.
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This is an updated version of my rating transition research for Structured Finance bonds - to be shown at the forthcoming Global ABS conference in June 2010.
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As presented on a SII CPD Seminar on 2 July 2009 in London - an updated version of the "Risk of Over-reliance on Ratings" presentation but with new slides and incorporated participants\' responses.
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2. 2
In March 2015, NLGN hosted a high-
level roundtable with senior officers from
local authorities, Shadow Chief Secretary
to the Treasury Chris Leslie MP* and
representatives from the UK Municipal
Bonds Agency (UKMBA), to discuss the
creation of this, the first agency of its kind
in the UK. The discussion considered both
the benefits of the agency and the merits
of getting more local authorities to invest
in municipal bonds. This paper outlines
the key themes coming out of these
discussions and next steps for driving
change across local authorities and rolling
out further investment in the UKMBA.
CONTEXT
Local authorities are undergoing a period
of rapid financial change. Alongside the
implementation of huge reductions to revenue
spending, the Coalition government gave
more control to councils over the ways in
which they finance capital spending, enabling
authorities to invest in buildings and equipment
to support the delivery of local services. This
system gives councils the freedoms to raise
finance for capital investment without consent
from central government on the proviso that
they can afford to service their debt from their
revenue resources.1
* A the time of publication Chris Leslie MP, is now
Shadow Chancellor of the Exchequer
1 https://www.gov.uk/government/policies/giving-local-
authorities-more-control-over-how-they-spend-public-mon-
ey-in-their-area--2/supporting-pages/investment-in-local-
government-capital-assets
Despite these new freedoms, the National
Audit Office published figures demonstrating
that publicly-funded capital investment
by councils decreased by a third between
2009/10 and 2013/14.2
In the current
financial climate and in the context of
substantial cuts to revenue budgets and the
resulting cuts to services, it can be difficult
for councils to defend capital investment.
Given that resources have to be set aside
on a yearly basis to repay the interest on
all outstanding loans, taking on additional
capital spending can have a direct impact on
revenue budgets, which are already under
immense pressure to maintain as far as
possible current levels of delivery in public
services. In this context it can be a challenge
to justify to members and citizens additional
capital spending, which may come at the
expense of ongoing service delivery.
Yet, there is a strong financial and social
case for capital investment in infrastructure
for communities and a long history of under-
investment. Investment can drive local
economic growth and pump prime service
transformation for long-term gains in both
financial terms and outcomes for citizens. In
order to accelerate local economic growth, it
becomes imperative for councils to create a
strong business case for capital spending and
find a politically acceptable way in which to
fund this investment.
2 http://www.ft.com/cms/s/0/5652c79c-ccae-11e4-b94f-
00144feab7de.html
3. 3
This all comes at a time of rapidly
accelerating devolution. The comprehensive
deal made in Greater Manchester has opened
the floodgates to devolution of power and
services, influencing further devolution to – for
example – West Yorkshire and Sheffield. While
fiscal devolution continues to lag behind,
this is the logical next step in an area with
considerable existing momentum.
UK MUNICIPAL BONDS AGENCY
The UK Municipal Bonds Agency (UKMBA)
offers local authorities a new method of
capital finance borrowing as an alternative to
borrowing from the Public Works Loan Board
(PWLB). It is anticipated that the first bonds
will be issued shortly after the 2015 General
Election. The aim of the Agency is to reduce
financing costs for councils by arranging
lending at competitive interest rates. Using
municipal bonds, local authorities will be able
both to borrow and refinance debts for capital
investment independently of the PWLB.
The benefit of the agency is that it provides
councils with access to cheaper lending rates
while also giving enhanced levels of financial
autonomy from the Treasury. Other benefits of
the bonds include:
■■ Reducing the impact of shifting government
lending policies, by increasing diversity and
competitiveness of lending sources;
■■ Potentially creating new mechanisms for
prudent investment by pension funds in
local government infrastructure;
■■ Increasing transparency and borrowing:3
■■ Providing local authorities with
opportunities to access European
Investment Bank funding;
■■ Creating the conditions for London to
become the main financial centre for
trading in municipal debt.
There are three ways in which the UKMBA will
fund lending:
■■ Raising money on the capital markets
through issuing bonds;
■■ Arranging lending or borrowing directly
between local authorities;
■■ Sourcing funding from other third party
sources, such as banks, pension funds or
insurance companies.4
Borrowing from the agency would establish a
joint and several guarantee between all local
authority borrowers; a collective guarantee
agreement of debts between borrowers within
the agency. Through this joint and several
guarantee, councils would reduce their
borrowing costs by 20 to 25 basis points in
comparison with the PWLB. Shareholders
would only be a part of the joint and several
guarantee if they were also borrowers.
Incentivising borrowers through such a
mechanism is a balancing act: the guarantee
is attractive because it strengthens the credit
3 See: http://www.local.gov.uk/finance/-/journal_con-
tent/56/10180/3684139/ARTICLE (accessed March 2015).
4 http://www.local.gov.uk/documents/10180/11531/Mun
icipal+Bonds+Agency+QA+Jun+14+-+final.pdf/8ec7febc-
eefb-449c-9dde-10e60f9bfb17
4. 4
rating of borrowers and thus drives down the
price of bonds, but there are also potential
financial and legal implications for borrowers
if the guarantee has to be called in. Although
it would be possible for local authorities
to borrow from the UKMBA without also
investing in the agency, this would be at
slightly higher rates than for those who
choose to be shareholders, providing an
incentive for more councils to become
investors in the scheme.
The ultimate objective for the agency is to
involve as many local authorities as possible.
This will fundamentally change the way
councils borrow and are financed making
it considerably cheaper and more efficient.
As one delegate at the roundtable put it:
“there’s safety in numbers”. At the time of
the roundtable, over 50 local authorities had
signed up to be investors in the bonds agency.
For local authorities, this creates great
potential for transformative change in the way
that capital is financed along with greater
freedoms and an increased ability to invest
for local economic growth. The creation
of a municipal bonds market will facilitate
greater fiscal autonomy for local authorities
and, ultimately, create optimal conditions for
further devolution of power and finance to
local government.
SPEAKERS THOUGHTS
Chris Leslie MP
Shadow Chief Secretary to the Treasury
Chris Leslie MP spoke at the roundtable
about the possibilities for local government
finance with the creation of the UKMBA.
From a political perspective, he noted that
very little attention is paid to how local
government capital is financed in the House
of Commons yet the political landscape will
always encourage the development of new
infrastructure. For central government to
support reforms to the way local government
is financed, the ultimate driving force will be
ensuring the greatest savings to the taxpayer.
For the local authorities involved, the ultimate
driving force is price and efficiency.
Leslie noted that it was healthy for local
authorities to have more ownership and
involvement in capital finance, rather than
relying solely on the PWLB, the Treasury and
the taxpayer. He suggested that this matures
the sector and improves their skills base. A
competitive process in the marketplace in this
context was heralded as a positive outcome:
to drive efficiencies in capital investment and
local economic growth through diversification
of the market.
Furthermore, developing a successful bonds
market and alternative methods of borrowing
can create the conditions towards greater
5. 5
devolution within the UK. Being able to control
their own finances is a move in the right direction
for local authorities seeking central government
authorisation for future self-autonomy.
At present, there are many national restraints
on borrowing. Leslie welcomed the UKMBA
as a way to develop and advance the market
for local authority capital finance.
ENCOURAGING OPT-IN FROM
LOCAL AUTHORITIES
Many delegates at the roundtable discussion
were from local authorities who had already
signed up as investors in the UKMBA and were
therefore optimistic about the opportunities
that a municipal bonds market could offer.
The discussion examined the benefits and
drawbacks of the newly-established UKMBA,
as well as how to encourage more local
authorities to participate.
Making the business case stack up
Delegates from local authorities reported
that price will be the most important factor in
deciding whether to borrow from or invest in
the UKMBA. Any new vehicle for borrowing
needed to stack up in business case terms in
order that councils might be able to assess
the merits of participation. This business
case was not merely about the up-front price
or interest rates, but also about a council’s
realistic ability to repay their debt.
Risk sharing and guaranteeing other councils’
debts represented a potentially significant
psychological hurdle for some local authorities
in deciding whether to participate as investors
or shareholders. For one council, a delegate
suggested that there were internal struggles
to reconcile the risks associated, as the
costs of servicing their debt – if they were to
refinance from the PWLB to municipal bonds
– would be equal to the costs of running
their fire and rescue service. In this context,
gaining consensus across the authority to
invest or borrow was a significant challenge.
In encouraging local authorities to participate,
it was essential that the politics – both
party political and internal – of investing in
infrastructure were taken into account.
For many local authorities, securing greater
financial autonomy from central government
was a highly attractive proposition. This will
allow them to develop a more sustainable and
responsible financial position devoid of the
current ‘parent-child relationship’ which some
local authorities perceive as inherent in the
current model. This was particularly the case
in creating the conditions for fiscal devolution
and allowing councils to play a greater role in
the economic growth of their areas.
Much of the risk associated with investing
was deemed by some as ‘perceived’ rather
than actual. Supportive councils argued
that the current economic climate is, in
fact, a key driver for getting involved in the
agency as an era of fiscal consolidation
6. 6
could reasonably be viewed to be as much
an opportunity to innovate as a reason to
exercise caution. There is a strong case to be
made about investing in growth as a response
to sustained retrenchment in the public
finances, where councils and local areas
could benefit from business rate growth,
higher employment rates and improved
standards of living. In this light, it was argued
that the risk of joining the bonds agency
would be outweighed by the benefits felt by
participating councils.
Diversification of the market
The creation of a municipal bonds agency
will diversify the market, meaning that local
authorities will have greater choice and
many more avenues to explore in terms of
financing their capital and refinancing their
debts. With greater choice also comes
greater fiscal autonomy for local authorities.
By way of comparison, very few private
sector businesses would entrust all their
borrowing to one lending organisation: there
was a compelling case to be made for local
authorities to be investing in bonds as part
of a diversified, coherent and balanced risk
management strategy in the proper interests
of their council taxpayers.
At present, the PWLB is responsible for the
majority of lending for capital investment.
Borrowing from the PWLB incurs fixed interest
rates, with a standard rate of 100 basis points
– the unit of measure for interest rates defined
as one hundredth of one percentage point.
Local authorities may pay more favourable,
reduced interest rates if they qualify for
certainty or project rates: the certainty rate
is 80 basis points for local authorities who
provide information on their borrowing and
associated capital spending, and the project
rate is 60 basis points for infrastructure
projects nominated by a Local Enterprise
Partnership.5
For the fiscal year 2012/13, local authority
borrowing stood at £84.5 billion, with £63.4
billion of this borrowed from the PWLB.6
This
clearly shows a lack of diversity in borrowing
options as councils are overly-dependent
on a single source of capital finance through
the PWLB and, by extension, the Treasury.
This is problematic for a number of reasons,
primarily because local authority borrowing
is subject to whatever the Treasury is able to
offer. Indeed, borrowing interest rates may be
subject to change over the course of a day:
“[the Debt Management Office] reserves the
right to make additional, unscheduled intra-
daily rate changes as necessary”.7
A delegate
reported that the PWLB had changed
repayment terms halfway through a loan
repayment, which had made major structural
differences to the local authority’s debts
and investment balances. Another delegate
reported that signing up to UKMBA was
5 http://www.dmo.gov.uk/index.aspx?page=PWLB/
PWLB_Interest_Rates
6 http://www.local.gov.uk/documents/10180/11531/
MBA+Report+Final.pdf/037bbcf0-e7f5-4f06-946e-
98e7e824ce49
7 http://www.dmo.gov.uk/index.aspx?page=PWLB/
PWLB_Interest_Rates
7. viewed by their authority as an ‘insurance’
policy against the uncertainty of the PWLB.
The introduction of a bonds market for capital
investment was seen as a ‘win-win’ situation
by the roundtable delegates. Firstly, the
bonds market dis-incentivises the Treasury
from arbitrarily raising its interest rates as
councils will have the option to move their
borrowing or refinance through the UKMBA.
Conversely, if the creation of the UK bonds
market led the PWLB to reduce their interest
rates, although it would impact adversely on
the UKMBA, local authorities would still save
money on their capital investment.
Raising the profile of local
authorities
Local authorities are not yet well-established
in the bond market and thus have a lack of
maturity and confidence when facing the
market. It is understood that it may take
a long time to establish a strong market
portfolio to encourage outside investors to
buy in to the scheme, although the fact that
many borrowers have achieved very strong
credit ratings was regarded as promising.
One delegate said that local authorities will be
encouraged to become significant borrowers
in the bonds market if the price paid for
bonds was reduced. This would increase the
number of alternatives available for raising
capital finance, meaning that local authorities
will be able to access organisations like the
European Investment Bank more efficiently
in the future. Increasing the awareness of
municipal organisations in the bond market
will not only open up more capital investment
opportunities for local authorities in the short-
term, but also holds out the potential for local
authorities to access more funding in the
longer-term.
Delegates reported that outside investors
have three priorities when it comes to
potential investment: high quality credit,
diversity in the market, and liquidity to invest.
There is a need for local authorities to prove
themselves in these three areas: to prove
that they are worthy of being invested in. The
joint and several guarantee is vital to raise
the borrowing profile of local authorities. The
guarantee means that investors do not have
to set up systems for every individual local
authorities as they come to market, which is
especially beneficial for small borrowings
In order for the bond market for local
authorities to flourish, it was widely agreed
that there needs to be broad opt-in at
council level and, following this, there needs
to be the trust and faith in the system to
persuade external parties to invest. Raising
the profile of local authorities as investors
and borrowers is crucial for the success of
the agency. An advantage of coming fairly
‘late to the game’ to local authority bonds
in the UK is the fact that much learning from
abroad, for example Scandinavia, was felt to
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8. 8
influence beneficially the ways in which the
UK bonds market operates. Furthermore,
there was considerable potential for London
to become the main financial centre for
trading in municipal debt which would create
a significant new financial market for the UK.
CONCLUSIONS
The creation of a municipal bonds market
is positive for local government as a whole.
In the broader context of accelerating local
economic growth and creating the conditions
for greater fiscal autonomy, and subsequent
devolution, presenting local authorities with
an alternative method of funding capital
investment other than the PWLB and the
Treasury should be welcomed by the sector.
For many local authorities, participation
in the bonds market is almost exclusively
about price and ensuring the business case
stacks up. Diversifying the market and raising
the profile of local authorities in the bonds
market were also noted as key drivers for
local authorities. Reconciling the short and
long-term benefits with the associated – or
perceived – risks is extremely important to
ensure buy-in at all levels within councils.
Moving forwards, there was a sense that the
agency needs to persuade as many local
authorities as possible much more rigorously
to take the offer up. The offer is more and
more attractive, the more the risk is shared
and the partnerships diversified. Neutralising
fears around risk sharing and presenting
the bonds agency as a genuine alternative
to the PWLB, especially in terms of greater
fiscal autonomy for local authority capital
investment, could reasonably be expected
to encourage a far broader range of local
authorities to invest in municipal bonds.
To do so could deliver a truly transformative
change to the way in which infrastructure and
capital is financed in the UK, and the ways in
which local authorities control and accelerate
local economic growth in their areas. This
would deliver benefits to local authorities,
their council taxpayers, and to Britain and its
ability to invest in its economic recovery.
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