This report highlights the emergence of two separate but related structural problems in UK pensions and capital markets that are undermining the long-term prosperity of the UK. Addressing inadequate pensions for millions of people in the next few decades and rebuilding a virtuous circle of investment and growth in capital markets will require a renewed and concerted focus in government, regulators and the industry.
Innovative growth companies are a vital part of rebuilding a more resilient, dynamic, and sustainable economy in the EU. This report highlights the challenges faced in funding this important sector, analyses the rapid growth in early stage investment in the EU over the past five years, and outlines an ambitious but achievable growth opportunity that could unlock nearly €25bn a year in additional investment to support nearly 5,000 companies in reaching their potential.
Analysis of the size, growth and penetration of sustainable finance activity in global markets.
Analysis of the shift in risk appetite & investment away from equities over the past few decades by UK pension funds.
Monitoring the progress of signatories and holding them to account. This report offers unique insight into what Charter signatory firms – from across the financial services industry – are doing to boost the proportion of women in senior ranks, who has hit and missed their targets, how they are developing diversity data and their different approaches to hybrid working.
This short paper is a summary of the key themes in our current work on the urgent need for more structural reform of pensions, capital markets, and long-term investment in the UK. It includes some key points from a recent dinner hosted by New Financial with C-suite representatives from across the industry, as well as conversations with senior politicians, policymakers, and market participants over the past few months. We will be publishing a more substantial report outlining the case for reform and how to deliver it in September.
Analysis of pools of long-term capital in the EU with a focus on pensions.
Depending on your perspective, the Edinburgh Reforms are either ‘a bold collection of reforms’ (Jeremy Hunt); ‘a missed opportunity’ that is ‘too slow, too narrow, and too timid’ (The Daily Telegraph); a risky ‘bonfire of burdens on the City’ (Robert Peston); or ‘an extremely dangerous and wrong path to follow’ (Sir John Vickers). We think the reality is more prosaic.
Energy companies require more than $1 trillion per year in ‘transition finance’ to decarbonise their operations and hit their net zero targets by 2050. This report shows that transition finance as it stands is a long way short of raising the required amounts to clean up the energy sector; analyses why transition finance has not taken off in the same way as green finance; and outlines some ideas on how issuers, investors, investment banks, and policymakers can move the dial on transition finance.
A rough guide to how (not) to talk about banking, finance, and capital markets.
For a few brief weeks, the UK government had a new tone towards financial services and a new sense of ambition, with a focus on ‘Big Bang 2.0’ and wanting to turn London into the ‘world’s leading financial centre’. While this reaffirmed commitment to the sector was welcome, this paper aimed to cut through some […]
Analysis of the size, depth and growth potential of capital markets in Europe through the lens of political challenges.
Analysis of the size, growth and penetration of green finance in European capital markets.
2021 was another big year for the Charter, with a third of signatories due to hit their targets. While more than three-quarters of the Charter signatories in this analysis have met or are on track to meet their targets for women in senior management, the average level of female representation has remained flat – at 33% year-on-year – for the first time.
Paper 1: Why do investors need a diversity toolkit?
An introduction to why more corporate diversity reporting is not yet leading to informed decisions from investors or better outcomes for investee companies, and what needs to change.
This report outlines an ambitious blueprint for the future of UK banking and finance in three broad areas: rebooting domestic capital markets to enable the industry to better support the UK economy; improving the international competitiveness of the UK as an international financial centre; and mapping the potential role the UK could play in developing global cooperation and partnerships.
This ‘concept paper’ outlines an ambitious initiative to help engage and empower individuals with their money, improve their financial resilience and financial literacy – and ultimately drive wider retail participation in capital markets.
This report presents a new vision for EU capital markets and identifies the potential for game-changing growth to support investment, jobs, and sustainable growth. We estimate that an additional 4,800 companies in the EU27 could raise an extra €535bn per year in the capital markets and that an additional €14tn in long-term capital could be put to work in the EU economy to help support a recovery.
This report is a unique analysis of the gender pay gap data at more than 400 firms from across the financial services industry highlights the slow progress made in tackling its large pay gap and the lack of women in the highest paid roles.
This report measures the penetration of ESG in different sectors of banking and finance around the world and highlights the challenges ahead for the industry. While there has been significant growth in ESG activity in the past five years, in most sectors it is still a small fraction of the total. Europe is a long way ahead in most sectors – but the US and Asia are catching up fast.
This report analyses EU capital markets from the perspective of strategic autonomy. It shows that in most areas of activity the EU falls short and there is a lot of work to be done. Building bigger, better and more integrated capital markets needs to be an urgent strategic priority to develop sufficient domestic capacity to finance the EU economy and support a post-Covid recovery, reduce the EU’s reliance on third countries, and increase its international attractiveness and global influence.
Five years since the launch of the Women in Finance Charter, this report assesses its impact on female representation and the wider diversity and inclusion agenda at signatory firms and across the financial services sector.
Our unique index measures the relative scale of banking and finance in more than 60 markets across more than 40 metrics of domestic and international activity. It also shows how different financial centres have grown over the past few years – and sets a benchmark to measure future growth and shifts in activity.
The Covid 19 pandemic and the murder of George Floyd have exposed racial inequity, catapulted Black inclusion up the corporate agenda, and created a sense of urgency to drive change. This qualitative analysis focuses on the progression of Black colleagues into leadership positions across the UK financial services industry.
This report highlights the damage that Brexit has already done to the City of London. More than 440 firms in banking and finance have moved or are moving part of their business, staff, assets or legal entities from the UK to the EU. While this is higher than previous estimates, it underestimates the real picture – and the potential longer term impact.
New Financial Summary – The UK regulators’ discussion paper “Diversity and inclusion in the financial sector”
In July 2021, the UK’s Financial Conduct Authority, Prudential Regulation Authority and the Bank of England together published a discussion paper entitled: Diversity and inclusion in the financial sector – working together to drive change. The discussion paper outlines the regulators’ proposal to set rules and guidance for all regulated firms on D&I issues, and […]
At a time when the European economy needs bigger and better equity markets more than ever to help support a post-Covid recovery, this short paper analyses of one of the biggest barriers to growth: the complex patchwork of European stock markets, stock exchanges and post-trade infrastructure.
Five years since the UK Government launched the HM Treasury Women in Finance Charter, signatories faced their biggest test yet as the pandemic struck in 2020. This fourth Annual Review analyses the largest cohort yet, with data from 209 signatories.
This report shows that while the UK is bursting with over £5.6 trillion in pools of long-term capital it faces a drought of the sort of long-term productive investment that the economy needs in the wake of the Covid crisis. Just 1% of pensions and insurance assets are invested in unlisted UK equities: this report highlights the barriers to unlocking more of this capital and suggests some solutions to put more of it to work in the UK economy.
One of the biggest challenges and opportunities for UK capital markets is how to reinvigorate the new issue market and to make listing in the UK more attractive to UK and international companies alike. Our latest paper ‘The wider context on UK public equity markets’ is our submission to the UK listings review, being led […]
In the past few weeks, it has been quite surprising to see how many people appear to be surprised that the UK’s financial services industry / the City ended up with so little from the Brexit deal, or that there would be an immediate impact on some parts of the industry. This short paper summarises […]
This report shows that post-Brexit capital markets in the EU will be significantly smaller and less developed relative to GDP than they are today – and that the UK’s current dominance of EU capital markets activity will be replaced by the dominance of France and Germany. The report also raises some difficult questions over the future relationship between the EU and UK in key sectors.
This report analyses the development of EU capital markets since the conception of the capital markets union initiative and shows that while steady progress has been made at an overall EU level, growth has been patchy and there is still a lot of work to be done in individual member states.
This report analyses the shifting trends in European and global markets and identifies the big strategic choices the UK will need to make in the coming years on the future of banking and finance, capital markets, and the City of London.
How the Covid crisis is catalysing a step change in diversity and inclusion across the financial services industry.
The Covid crisis presents huge challenges – but there are also opportunities. It has propelled the diversity and inclusion agenda to the fore like never before, and shown us that rapid change is possible, desirable, and necessary.
This report analyses how banks and capital markets have responded to the Covid-19 crisis and identifies the potential for game-changing growth in EU capital markets to support investment, jobs, and growth. We estimate that an additional 4,000 companies could raise an extra €470bn per year in the capital markets, and that an additional €11 trillion in long-term capital could be put to work to support a recovery.
This third Annual Review analyses the largest cohort yet, with data from 187 signatories. Progress is steady – four out of five have met or are on track to meet their targets for female representation in senior management.
This report shows that capital markets have a vital role to play in supporting the UK economy through the Covid crisis and driving a recovery. The report identifies 1,000 large UK companies that use the capital markets to support their day-to-day business, raise capital, or manage their risks. These companies employ nearly six million people in the UK and represent nearly 90% of UK firms with revenues of more than £200m.
We are delighted that Yasmine Chinwala, a partner at New Financial and head of our diversity programme, has been awarded an OBE for services to the HM Treasury Women in Finance Charter in the Queen’s birthday honours list. New Financial is the official data partner to HM Treasury on the Women in Finance Charter and […]
The banking and finance industry can be part of the solution to the Covid crisis, but how the industry responds and how it behaves in the next few weeks and months will define its relationship with government and society for the next decade. This short paper summarises 10 things that the industry should and should not be doing right now.
Over the past few months the debate on equivalence – an arcane but vital part of the future of the City post-Brexit – has generated as much heat as it has light. This report cuts through the confusion and summarises how EU equivalence works, the benefits it provides, the trade-offs it involves, its limitations, what it is not and what it doesn’t achieve.
Few sectors of the economy have been blamed more for fuelling popular anger with capitalism as banking and finance – and few sectors have as much to lose from the backlash against it. This report analyses why so many people are so angry, summarises the main causes of the widespread loss of faith in capitalism over the past few decades in the form of 10 different types of real and perceived inequalities, and outlines the main policy responses that have been proposed.
This report analyses the progress made by the capital markets union project so far, underlines why Europe needs more capital markets – and why it needs more integrated capital markets. It outlines a more ambitious and more focused roadmap for CMU over the next few decades that combines ‘top down’ initiatives at an EU level and ‘bottom up’ initiatives at a national level to build bigger and better capital markets.
This updated report provides the most comprehensive analysis yet of the impact of Brexit on the City and the wider banking and finance industry. More than 330 firms in banking and finance have moved or are moving business, staff, assets or legal entities away from the UK to the EU – and these numbers are likely to increase in the near future.
This report shows that post-Brexit capital markets in the EU will be significantly smaller and less developed relative to GDP than they are today. The UK’s current dominance of EU capital markets activity will be replaced by the dominance of France and Germany.
This report analyses the changes in the world of stock exchanges, equity markets and the new issue market over the past 50 years. It highlights the vital role that stock exchanges play in the economy, analyses the main drivers of the significant changes over the past few decades – and suggests how we can get exchanges back on track.
This report outlines an ambitious vision of game-changing growth in European capital markets. It underlines the wide range in the size and depth of markets across the EU and highlights the potential benefits of deeper capital markets to the European economy in concrete and practical terms.
This report looks at why and how the most forward-looking asset owners (such as pension funds, insurers and sovereign wealth funds) are addressing diversity and inclusion. Their opinions count – as an essential source of capital for financial markets, the needs and actions of asset owners have a big impact on how the whole system […]
This report provides the most comprehensive analysis yet of the impact of Brexit on the City and the wider banking and finance industry. More than 250 firms in banking and finance have moved or are moving business, staff, assets or legal entities away from the UK to the EU – and these numbers are likely to increase significantly in the near future.
The City may not like the hand it has been dealt by Brexit – but there is a lot more to it than being hung out to dry by the government Thrown under a bus, hung out to dry, or sold down the river: you don’t have to look very hard to find a lot […]
Three years since the UK Government launched the HM Treasury Women in Finance Charter, it is having the desired impact – signatories are taking action to improve gender diversity and beginning to see positive results, according to New Financial’s latest research.
While culture and diversity have both moved up the agenda of the financial services industry, most firms treat them as distinct issues with discrete initiatives and separate reporting lines. Our analysis finds diversity and culture are closely interconnected and that a more holistic approach to both would yield better – and faster – results. Diversity and Culture analyses the differences and similarities in how companies approach diversity and culture and why it matters.
Our unique index analyses the size, depth and growth potential of capital markets in 60 countries around the world across 25 different sectors of activity. It shows that capital markets in the US are by far the largest in the world today and are nearly twice the size of markets in Asia and Europe. But capital markets in Asia and emerging markets are catching up fast – and are set to dominate the potential growth in global capital markets in the coming decade.
This unique report analyses the the impact of capital markets on people’s everyday lives through the lens of the economy in the North West of England. The report shows what goes on in the City of London is far more relevant to the everyday lives of millions of people living in the region than most people in the City or the North West would expect – and we hope that it encourages the industry to think differently about its role and impact.
Our unique index measuring the value of domestic and international banking and financial markets activity across nearly 30 metrics in nearly 50 countries shows that the US is by far the world’s top financial centre with the UK taking the second place – well ahead of other European countries.
There is broad consensus that diverse voices enhance investment performance by increasing diversity of thought, which improves decision-making and investment idea generation while guarding against groupthink. But the industry has a long road ahead to cultivate the diverse workforce that can bring all these benefits. This report identifies the practical barriers to diversity in portfolio management, analyses what individual firms are doing to address these challenges – and highlights how the industry can work together to accelerate change.
Our unique analysis of the gender pay gap data at nearly 400 firms from across the financial services industry highlights the wide range in the pay gap, bonus gap, and levels of female representation in different sectors of the banking and finance industry – and sets a benchmark to measure future progress.
Capital markets in the UK are the largest in the EU and are roughly twice as deep relative to the size of the economy as in the rest of the EU. But there is plenty of scope for growth and no room for complacency: UK capital markets are only half as developed as in the US, and over the past decade this gap has widened.
The asset management industry is a huge, important and growing industry, that plays a vital economic and societal role in managing risk and return for its customers and in allocating capital. But it can often be distracted from its underlying purpose of serving is customers by the structure of the industry, misaligned incentives, and its reliance on modern portfolio theory. In an important recent paper, Jon Lukomnik and Jim Hawley explore the underlying purpose of asset management, and how to reconnect the industry with that purpose.
Most sectors of the capital markets in the EU have shrunk relative to the size of the economy over the past decade – and the gap in the depth of capital markets with the US has widened. This report highlights the urgent need for action to boost capital markets in the EU – particularly after Brexit – but shows that there is a huge growth opportunity for capital markets in Europe.
The UK government launched the HM Treasury Women in Finance Charter in March 2016 to encourage the financial industry to improve gender balance in senior management. This report is the first annual review of signatories to monitor their progress against their Charter commitments over the past year. And while they are off to an encouraging start – 85% have either met their targets or are on track to meet them – progress has so far been slow.
The recent attack on the City by the Labour leader Jeremy Corbyn – and the public comments by a bank chief executive on bankers’ bonuses and populism – show that 10 years on from the financial there are few signs of mistrust and anger with the industry going away. If the industry wants to bridge the gap with the rest of society it should start by talking about itself in a different way.
The main benefit of a transition period is that it would reduce the risk of a ‘cliff-edge’ Brexit and buy more time for the UK and EU to negotiate a better long-term deal, but we think it is unlikely that any agreement can be reached early enough to prevent firms relocating significant numbers of staff. The good news is that an agreement on a transition period would be possible later next year – but only if the UK government changes direction in its negotiation strategy, and soon.
Diversity is firmly on the corporate agenda. New Financial’s latest report looks for the first time at what asset owners (such as pension funds, insurers and sovereign wealth funds) are doing on the diversity front. We analysed 100 asset owners globally with combined assets of $8 trillion to find out why and how they are approaching diversity – and how this affects asset managers.
The shadow of the financial crisis has dominated the banking and finance industry for nearly a decade. This report measures the concrete impact of the crisis on 16 sectors of the capital markets industry – from investment banks and asset managers, to exchanges, trading volumes and regulation – and highlights which sectors have suffered, which have weathered the storm, and which have flourished.
Brexit could have a significant impact on recruitment and jobs in the City of London – not least by highlighting structural challenges that will have a far bigger impact on the industry in the longer-term Another week, another set of numbers that send completely contradictory messages about the impact of Brexit on the City of […]
Capital markets union, the EU’s flagship initiative to boost capital markets in Europe and reduce the economy’s reliance on bank lending is three years old. This report analyses the progress so far, the impact of Brexit, and the shift in direction in CMU 2.0, (the revised version of the project that was published last month) – and suggests some more radical longer-term measures to build bigger and better capital markets in Europe.
HM Treasury’s Women in Finance Charter launched in March 2016 and now has more than 140 signatories. Our latest report is based on a survey of more than 80 firms that have signed up and assesses the concrete impact of the Charter is having on how they approach diversity, the benefits they are experiencing – and the challenges they face in meeting their Charter commitments.
The debate around gender diversity at the most senior levels in the corporate world has shot up the agenda in recent years – but for all the talk, how much progress has been made in the financial services sector? New Financial’s latest research on female representation on boards and executive committees across European capital markets shows a significant improvement in female representation on boards and excos – and the numbers are heading in the right direction across the industry.
Much of the debate around the impact of Brexit on the City of London and the financial services industry across Europe has been UK-centric. So we’ve read, sifted and summarised hundreds of speeches, articles and reports to identify what the rest of the EU really think about it. This report summarises the main priorities, concerns and negotiating positions of policymakers and regulators in each of the 27 member states who will be on the other side of the negotiating table from the UK over the next few years – and sums up what’s at stake.
To people who work in and around the financial industry it is self-evident that capital markets play a vital role in channelling investment into the economy to help drive growth and prosperity. But to most people outside of the industry, what capital markets do and the value of what they provide is less obvious, particularly given the shadow of the financial crisis. This report aims to address that disconnect.
The problem with chasing your tail is that you can lose sight of where you are heading without getting any closer to where you want to be. Over the past six months much of the City of London and financial services industry in the UK has been locked in an often circular argument about the potential impact of Brexit on their business and how to adapt to it. Here is a short 10-point reality check on the impact of Brexit.