Financial News Today

As of February 12, 2025, here is an overview of the latest financial news:

Bank of England Bailey Warns Against Deregulation Backlash

Andrew Bailey, Governor of the Bank of England, cautioned against reducing financial regulations, emphasizing the enduring impacts of the 2008 financial crisis. In a speech at the Chicago Booth business school in London, Bailey highlighted the importance of monitoring emerging vulnerabilities, particularly in the non-bank financial sector. He stressed that addressing financial risks requires more than just increased regulation, pointing to the development of tools like a liquidity facility for non-bank financial institutions. Bailey also refuted the notion that trade-off between economic growth and financial stability.

Commonwealth Bank of Australia Reports $5.13 Billion Profit Amid Household Financial Struggles

The Commonwealth Bank of Australia (CBA) announced a half-year cash profit of $5.13 billion, underscoring a contrast as many Australian households face rising living costs and debt. The bank reported an increase in personal loan arrears, especially among younger and lower-income customers, while mortgage arrears saw a modest rise. The Reserve Bank of Australia potential interest rate cuts might offer some relief to indebted households. Despite criticism over its substantial profits amid a cost-of-living crisis, CBA emphasized its commitment to supporting customers in need and enhancing measures against financial scams. The banks share price has surged by over 40% in the past year, bolstered by strong mortgage portfolios and rising house prices.

UKs HMRC Accused of Underestimating Tax Evasion

The UKs HM Revenue & Customs (HMRC) faces criticism from the Public Accounts Committee for significantly underestimating tax losses due to evasion, pegged at £5.5 billion for the 2022-23 fiscal year. The committee suggested that the actual figure is likely much higher and criticized HMRC for lacking a clear strategy to combat tax evasion. They highlighted the need for improved collaboration between HMRC, Companies House, and the Insolvency Service to enhance tax collection and identified loopholes, such as fraudulent company registrations and fake insolvencies, that facilitate evasion. In response, HMRC defended its risk-based approach to tackling tax evasion.

Trump Administration Begins Dismantling Consumer Financial Protection Bureau

The Trump administration has initiated efforts to dismantle the Consumer Financial Protection Bureau (CFPB) by dismissing two of its top leaders, Eric Halperin and Lorelei Salas. Halperin resigned immediately after being placed on administrative leave by Mark Paoletta, the CFPBs chief counsel and a White House Office of Management and Budget attorney. CFPB staff have been instructed to obtain written approval before undertaking any tasks. Established in 2010 under the Obama administration to regulate risky lending practices, the CFPB has faced criticism from Republicans who view it as overreaching and unaccountable. These actions are part of a broader initiative by the Trump administration, in collaboration with Elon Musk government efficiency project, which has also targeted other agencies like USAID.

Debate Over Inheritance Tax Exemption for Stocks and Shares ISAs

A debate has emerged regarding whether stocks and shares Individual Savings Accounts (ISAs) should be exempt from inheritance tax (IHT). Caitlin Boswell from Tax Justice UK argues against the exemption, stating that ISAs already offer substantial tax benefits and that further exemptions would concentrate wealth among the richest, reducing funds for essential public services. She advocates for tax simplification and equitable contributions. On the other hand, Freddy Colquhoun from JM Finn supports the exemption, noting that ISAs were designed to encourage long-term saving through tax-free growth. He suggests that exempting ISAs from IHT would incentivize savings and alleviate financial stress on families, aligning with government goals of promoting financial independence. This debate highlights the balance between encouraging savings and ensuring fair taxation to support public services.