Swiss banks including Pictet, Lombard Odier, Mirabaud and Edmond de Rothschild have established a group aiming to improve compliance and administrative exchanges through blockchain. The Zurich-based Blockchain Association for Finance will focus on how the financial industry uses and supervises distributed ledger technology. The other bank members are Banque Internationale à Luxembourg, Hyposwiss, Gonet, Reyl and Banque Cramer, along with Sygnum, Pleion, Capitalium Advisors, Bedrock, Fransad Gestion, OLZ, Stanhope Capital and the Alliance of Swiss Wealth Managers.

Sweden's Ikea is buying a 49% stake in financial services business Ikano Bank, which was spun out of the international furniture retailer in 1988, from the group's founding Kamprad family. Ikano already provides financial services to Ikea customers in eight markets as well as consumer banking services. Lending to Ikea customers accounts for around 25% of Ikano’s business and it is looking to extend its range of digital financial services online and in-store.

Manufacturing consumption of tin has helped to lift the metal's price to its highest level for seven years at almost $24,000 a tonne, partly because of increased demand for computers amid the past year's surge in remote working. The metal is used in the production of solder, an essential component in binding circuit boards and wiring. Other contributing factors to the price rise include the growth of electric vehicles and housebuilding in the US, where it is used in pipes and cladding.

The riskiest US corporate borrowers in the first weeks of the year make up the largest share of high-yield bond issues since 2007, according to Refinitiv. More than 15% of the total raised through junk bonds so far in 2021 has come from issues by companies with ratings of CCC or lower, adding to concern about the lowering of investment standards in the search for yield. Twenty-one per cent of high-yield bonds rated by Moody’s carry one of the agency's lowest labels, compared with just below 15% for S&P Global ratings. Triple-C rated bonds attracted $3.5bn in three separate weeks of January, a phenomenon seen only on seven other occasions over the past 20 years.

Switzerland's data protection authority has filed a legal complaint against the government over the sharing of data about bank employees, lawyers, accountants and other third parties with the US as part of sweeping tax evasion investigations. Data Protection Commissioner Adrian Lobsiger says the finance ministry is failing to comply with a Supreme Court ruling that prohibits the indiscriminate disclosure of individual’s names without first notifying the person concerned. The finance ministry argues it is too time-consuming to block out all the names on thousands of pages of documents transferred to US authorities.

Germany’s finance ministry has published a draft bill that aims to reduce tax evasion and avoidance through jurisdictions deemed unco-operative in tax matters. It would aim to discourage individuals and companies from conducting or launching business relationships with entities in jurisdictions that do not adhere to global tax transparency standards, using the EU’s tax haven blacklist as a reference. Dissuasive measures include limiting tax deductions derived from transactions with entities in unco-operative jurisdictions, refusing tax relief if at least 10% of a foreign company's ownership comprises individuals resident there, and requiring additional documentation and information as well as more restrictive rules governing withholding tax.

The persistence of the Covid-19 pandemic has led to the Financial Action Task Force to delay further its visit to Luxembourg to assess the implementation of measures to curb money laundering and the financing of terrorism. A new date to replace the scheduled March visit is expected to be announced at the end of next month. The publication of the group’s final report, which had already been postponed until October, could also be further delayed. FATF officials were originally scheduled to conduct their routine assessment of Luxembourg last November.

The aggregate net profit of specialised financial sector professional entities fell to €95.7m in 2020, down from €290.1m the previous year despite turnover remaining stable, according to the CSSF. Specialised PSFs, which cover 10 business lines including family offices, domiciliation agents, management companies and depositaries, reported revenues of €5.779bn last year, down slightly from €5.863bn in 2019, while the number of employees in the sector increased from 5,183 to 5,476.

Italian secutities regulator Consob has extended the short-selling ban on shares in Banca Monte dei Paschi di Siena until January 5 next year. The ban also extends to subscription rights and convertible bonds, with the endorsement of the European Securities and Markets Authority.

The European Central Bank may require banks to hold additional capital against leveraged loans as part of its yearly Supervisory Review and Evaluation process, warning that some institutions are ignoring warning signs of potential repayment problems if interest rates rise. The ECB is concerned that institutions have ignored its requests to cool the market for loans to highly-leveraged entities including private equity portfolio companies, in a market where investor demand for yield has led to low pricing and less stringent underwriting standards and loan terms. Some banks have been directly contacted about their lending business but Deutsche Bank refused to take action, which it was able to do since the ECB's recommendations did not have regulatory force.

Output and employment continued to grow in Luxembourg's financial sector in the first half of last year despite the Covid-19 pandemic, in contrast with the eurozone as a whole, according to Statec. The sector's gross value added increased by 1.4% and employment by 2.0% over the same period of the previous year, compared with declines of 2.0% and 0.4% respectively for the eurozone as a whole. In the third quarter, employment in Luxembourg's financial industry was up 1.4% year on year, compared with a eurozone fall of 1.0%. Luxembourg banks' average tier 1 capital ratio stood at 21% at the end of September, compared with 17% across the eurozone, and only 1% of their loans were classified as non-performing.

HSBC is planning to target wealth management and deepen its focus on Asia in a bid to boost growth, as part of its latest strategic shift. The bank aims to conduct large-scale investment where it sees the biggest opportunities, most likely expanding in Asia, the UK and the Middle East. HSBC, which has much smaller wealth operations than rival institutions, will unveil the new strategy along with its annual results later this month, after its February 2020 strategy reset was overtaken by the impact of the Covid-19 pandemic.

The UK's $1.7trn private banking industry would be particularly badly affected by the loss of access to the EU single market if new arrangements are not negotiated before it leaves, according to the British Bankers' Association. The association warns that UK private banks could be cut off from EU clients as there is no equivalence regime for retail and private banking services, making it impossible for banks to continue to operate in some countries.