How Brexit has Impacted the Banking Industry?

The United Kingdom announced it departure from the European Union a few months ago. Their announcement to leave the EU sent shockwaves to its former member states as well as the United States.

The governments of the respective countries were not the only ones impacted by the country’s decision to leave the EU behind; the banking industry took a bullet as well, clambering to find composure. The future for international banks in and outside of the United Kingdom began to look bleak.

For instance, banks in the United States such as Citigroup and Morgan Stanley took a hit when they opened in New York. They were down by 8% and 9%. JPMorgan Chase saw a 5.3% drop whereas Goldman Sachs saw a 6.1% drop. Shares in the UniCredit and Sanpaolo shut down by 24% and 23%.

Brexit was the primary cause behind the massive drops banks witnessed after the country made their departure announcement. Here is how the future of the banking industry may pan out in the following months after Brexit:

     Restrictions on Passporting

The banking industry, asset managers, and insurance companies will not be able to establish operations across the European Union even if they are located in the United Kingdom. Passporting allowed banks to operate all over the EU if they had a base established in the United Kingdom.

However, now, with Brexit, that is no longer a possibility. American banks and Swiss banks also fall under this category. To make operating all across the EU possible again, special arrangements need to be made and negotiated.

     Compliance with the Laws of the EU

The banking sector is a regulated industry. Brussels is responsible for instating most of the banking regulations. In the past, the United Kingdom has refused to abide by some of the imposed regulations such as bonus tax, there are still many that they agree on and follow.

The probability of the UK repealing or amending sectors of the financial regulatory law is unlikely. If they want to follow the requirements and conduct business with other member states of the EU, they will have to comply with the European Union’s regulations and come to a mutual agreement.

     The United Kingdom and the European Union’s Continuing Relationship

Several different proposals have been put forth to show how the United Kingdom can still continue their relationships with the members states of the European Union after leaving it. The UK could join the EFTA or EFTA to become the next Norway or make a bilateral agreement like Turkey to allow customs union operations. The UK will establish some type of agreement to continue its relationship with other member states after their departure, as the future of their financial industry is dependent on them.

The United Kingdom, after the Brexit vote, has three years to leave the European Union and negotiate a deal with other member states. It is important for the United Kingdom to take steps to ensure the success of their banking industry.

Questions To Ask When Getting a Vehicle Finance

In this article, you will find the essential questions which must definitely ask before applying for car financing. Do not enter into a deal unless everything is crystal clear to you and you have obtained the answers to these questions without any ambiguity. Make sure that you have all the “extraordinary” claims made by the financing company or dealer written in the agreement contract.

1.     What will be the interest rate charged?

The best way to know the exact interest rate that you will be paying on the vehicle financing is finding out the Annual Percentage Rate (APR). The APR is largely dependent upon your credit score. So if you have a good credit rating, chances are that you will get the loan at low APR. The car dealers and financing institutions like banks and credit unions, determine your credit rating through credit reporting institutions like Equifax, Callcredit, Experian and TransUnion.

2.     Will the early payment incur penalties?

Sometimes, financers charge you with penalties if you pay the instalments earlier than the designated time period. There may also be some other obscure charges that may impose penalties upon you. Just be clear if you may be subjected to any other charges during the loan term.

3.     What is the deposit policy?

Before you give the lender, you should necessarily inquire about the deposit policy. Be extremely sure whether the dealer or the financing agency will return the deposit or not if you change your mind. Get the answer typed in a written agreement.

4.      What are the mandatory fees associated with the finance?

There are dealerships that already have fixed some fees to the cars. Unless you specifically ask this question, there is no way of you knowing it. Knowing exactly what you are paying for is important. Sometimes, dealers also include the advertisement fees, vehicle shipment charges, paint protection fees and other such charges.

5.     Do you require credit insurance?

Sometimes the vehicle finance lenders either demand or offer car insurance. Asses if your existing insurance policy offers you the same benefit — if yes, the draw a detailed comparison between the two policies. In rare situations, lenders ask for insurance. In this case, you must carefully analyze how it will reflect upon your APR and make sure that it is incorporated in your credit.

6.     What is the length of the loan term?

You need to figure out the exact terms of the vehicle finance deal. In order to avoid paying exorbitant amount as an interest, it is better that your loan term is shorter.

7.      What becomes of your old car?

Never put the question to the dealer from whom you are obtaining the car financing and the car until you have agreed upon the cost of the new car. Trade-in prices are an integral part in the process of dealing so use it to your advantage. The dealer might try to offset the price of your car with the financing cost so make sure that you go through the breakdown of the cost very thoroughly.

Why You Shouldn’t You Say “I Do” When You Are in Debt?

Engaged? All set to take the vows — but wait, are you in a debt? You may be madly in love with your partner and cannot wait to tie the knot but believe it or not, one of the complex issues that lead to a divorce is money stress. So, before you walk done the aisle happily with your partner, it is better that you discuss your money problems. Delaying your vows until you have a clean slate will make your marriage last forever miraculously.

Read on to know why you shouldn’t enter into a marriage with eyes wide shut!

1.     Your Addiction Will Unleash a Financial Armageddon upon You

Spending compulsively is an addiction — it does not mean that the questionable person has a bad character but you have to acknowledge the fact that walking into a casino with your credit card every weekend is a problem. Unless you accept the fact, you cannot pull yourself out the deep pool of debt you have plunged yourself into. Assessing the financial mess that you already are in and having a dedication to solve it before you entire into a marriage will save you from an ultimate destruction.

2.     Initiate Money Problem from the Beginning

Being in a debt from the beginning of your new married life, means you will be in a tight spot financially. This insinuates that you will not have a lot of money in the emergency savings account. Consequently, you will not be able to bear the day to day household expenses as well.

3.     Ability to Cope with an Emergency Situation

Imagine that there was a hurricane that makes your roof collapse and the insurance wouldn’t cover the complete cost of repairs. Now, if you are already buried six-foot deep into a credit card loan how do you expect to pay for it? You most certainly do not want to be in a situation where instead of clearing your credit card balance, you have to hire a roofing contractor. At least not when you have only just embarked upon your married life — it is supposed to be blissful not an emotional dilemma, right?

4.     Maybe Your Values Are Poles Apart

You are high on “love” and miss out the opportunity to see that you and your partner have diversified opinions about money and expenses. You should have a candid discussion with your partner about your spending habits and personal finance management topics and what your future financial goals in marriage are.  Align your goals collectively and even if you do not see eye to eye, at least, there are no misapprehensions in minds of your future spouse.

5.      Debt Will Make It Impossible to Make a Shared Investment

You will not be just living together but building lives together. So, what if your poor credit card rating because of pending balances disqualifies you from getting a house loan? Understand beforehand, if there already is an existing debt that needs to be tackled and will being in debt mar your shared financial future prospects.

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