Where's all that bank contagion gone?

How far we have travelled.

It is a very telling measure of how far we have travelled down the path to probable Eurozone survival that contagion, and 'bank' contagion specifically, has become much less of a problem. Despite last month’s chaotic, and briefly almost disastrous, Cypriot bank bail-in, and the horribly inconclusive Italian elections in February, there have been virtually no negative consequences for the fortunes of the wider European financial community. A year or so ago either of these events could have been reasonably expected to have raised real fears that queues would form outside banks all over Europe.
An illustration of this is that the Euro Stoxx Banks index is now trading at around 100, the same level as last October, and way above last year’s low of 73.06, seen in July.

The most important reason for this new-found sanguinity is the European Central Bank’s, (ECB), Damascene conversion under Draghi from Trichet’s Bundesbank poodle to a central bank which is focused on the needs of all seventeen states in the union, the completion of which was epitomised by Draghi’s Clint Eastwood moment last September when he warned the markets that, 'we'll do whatever it takes, and it will be enough' and announced Outright Monetary Transactions. This virtually guaranteed that Eurozone nations would always have access to liquidity, hence breaking the potentially lethal ‘dance of death’ of over-indebted states and their under-capitalised banks, who are in turn laden down with massive investments in their national governments’ bonds.

Of almost equal significance has been Chancellor Merkel's extraordinarily dexterous performance in persuading her people of the manifold benefits of the Euro, (i.e. it's a highly effective export finance scheme for Germany-who are the ultimate, unchallenged Currency War victors), and therefore that bailing-out profligate southern neighbours is absolutely in Germany's interest. I’m happy to predict that this will continue, and indeed go into hyper-drive after she has won September's elections, (hardly in question in the absence of any credible Euro-sceptic opposition), as she will then feel free of the political imperatives that have thus far prevented her from allowing Germany to acquiesce to the issuance of jointly and severally liable Eurobonds, (with all Eurozone nations, including Germany, equally on the hook), and a proper banking union.

These measures will ultimately save the Euro, for another 5 years, say.

Photograph: Getty Images

Chairman of  Saxo Capital Markets Board

An Honours Graduate from Oxford University, Nick Beecroft has over 30 years of international trading experience within the financial industry, including senior Global Markets roles at Standard Chartered Bank, Deutsche Bank and Citibank. Nick was a member of the Bank of England's Foreign Exchange Joint Standing Committee.

More of his work can be found here.

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How tribunal fees silenced low-paid workers: “it was more than I earned in a month”

The government was forced to scrap them after losing a Supreme Court case.

How much of a barrier were employment tribunal fees to low-paid workers? Ask Elaine Janes. “Bringing up six children, I didn’t have £20 spare. Every penny was spent on my children – £250 to me would have been a lot of money. My priorities would have been keeping a roof over my head.”

That fee – £250 – is what the government has been charging a woman who wants to challenge their employer, as Janes did, to pay them the same as men of a similar skills category. As for the £950 to pay for the actual hearing? “That’s probably more than I earned a month.”

Janes did go to a tribunal, but only because she was supported by Unison, her trade union. She has won her claim, although the final compensation is still being worked out. But it’s not just about the money. “It’s about justice, really,” she says. “I think everybody should be paid equally. I don’t see why a man who is doing the equivalent job to what I was doing should earn two to three times more than I was.” She believes that by setting a fee of £950, the government “wouldn’t have even begun to understand” how much it disempowered low-paid workers.

She has a point. The Taylor Review on working practices noted the sharp decline in tribunal cases after fees were introduced in 2013, and that the claimant could pay £1,200 upfront in fees, only to have their case dismissed on a technical point of their employment status. “We believe that this is unfair,” the report said. It added: "There can be no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought."

Now, the government has been forced to concede. On Wednesday, the Supreme Court ruled in favour of Unison’s argument that the government acted unlawfully in introducing the fees. The judges said fees were set so high, they had “a deterrent effect upon discrimination claims” and put off more genuine cases than the flimsy claims the government was trying to deter.

Shortly after the judgement, the Ministry of Justice said it would stop charging employment tribunal fees immediately and refund those who had paid. This bill could amount to £27m, according to Unison estimates. 

As for Janes, she hopes low-paid workers will feel more confident to challenge unfair work practices. “For people in the future it is good news,” she says. “It gives everybody the chance to make that claim.” 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.