Brian Bollen's Blog

Anyone out there fancy a cycling challenge?

Once upon a time I might have thought about attempting this, but those days are behind me now...or are they?

Anyone care to join in?

 

DHO Journal 2023

The DHO Journal 2023 is now out.

 

Anyone out there fancy a cycling challenge?

Once upon a time I might have thought about attempting this, but those days are behind me now...or are they?

Anyone care to join in?

 

My latest pizzas, home-made from scratch

Just finished making a couple more pizzas following the recipe and methods of Vito Iacopelli on YouTube (grazie, Vito).

I think that, apart from Sina's Pizzeria in Wengen, this one below is the best I have ever tasted. The crust is/was superb. I'm planning to have the other tomorrow.

I think I could easily live off pizza like this, in between porridge, fruit, tablet and macaroon bars...

Macaroon bars and tablet

I have spent most of today making macaroon bars and tablet, two of the core elements of the staple diet of anyone growing up in central Scotland in the 1950s and 1960s.

The components of the recipes for both would give health professionals nightmares and the television advert for Lees Macaroon Bars would do the same for the woke generation.

But they are well worth the effort. 

Braverman must resign

Suella Braverman must resign. Simple as that.

But then, she should have been sacked the moment the story came out in the press that she regards herself as being above the laws that she, as home secretary, is responsible for.

She MUST resign.

Asset-liability mismatching should have no place in banking

We have heard a good deal of uninformed guff recently about asset-liability mismatches in the coverage of runs on banks and the spectacular collapse of Silicon Valley Bank.

 

I first became aware of asset-liability mismatches in banking around the spring of 1981 when I was doing a graduate trainee stint in the currency disposals department at the former Midland Bank International, and have been warning against them ever since.

 

Nothing to my mind justifies taking a sight deposit and 'transforming' that into a 25-year mortgage loan. Nothing. What has become an inherent and unquestioned component of banking practice is just wrong.

 

I've been called a Cassandra so many times I have lost count, but in the end, if you recall, Cassandra was proved 100% right.

 

'Banks' have only themselves to blame and should, in my opinion, be left to go well and truly bust, and the survivors to pick over their skeletons.

 

 

Parents stretching the finances to finance private schooling

I found this press release in my inbox this morning, and while it is not directly relevant to anything currently on my work sheets, it resonates with me as someone who bit the bullet in the summer of 1996 and committed to taking both our daughters out of the state 'education' system. I'm running it here not as an endorsement of the company involved, which I have not heard of before this morning, but because it tickles my interest as someone who has 'been there, done that'.

No need to be alarmed, says Bank of England; so why am I suddenly alarmed?

The Bank of England has, I just read in The Times, in effect said in the wake of news that UBS will rescue Credit Suisse, that there is no need to be alarmed about the British banking system.

Why does that send a chill down my spine?

 

 

Blue Blood, Cazenove in the Age of Global Banking

Title: Blue Blood, Cazenove in the Age of Global Banking

Author: Robert Pickering                                                                                                                                                                                                                                                                                                                                         

Publisher: Robert Pickering in partnership with whitefox publishing

Pages: 369

Price: £24.99

Format: Paperback

Published: February 23 2023

ISBN: 9781915036902; ebook 9781915036919

What do Blue Blood and Daniel Defoe's A Journal of the Plague Year have in common? One, they both prominently cite Tokenhouse Yard as a location, in Blue Blood's case in the very first sentence of the very first chapter. And two, they cover events with an emphasis on London that seem to be buried in the past but resonate strongly with at least some current readers.

When reading the Defoe tome, thoughts of the hysterical global reaction to Covid-19 are constantly to the forefront of the reader's mind. When reading Pickering's, recollections immediately present themselves of a bygone age before the City of London's so-called Big Bang in October 1986.

Polished mahogany doors, liveried porters in carpeted entrance halls, double-breasted waistcoats and Grenadier Guards cufflinks. Those, at least for some, were the days.

 

 

It was 30 years ago today

It was 30 years ago today.

No, not that Sergeant Pepper taught the band to play, but 30 years since I left the Financial Times building for the last time as a full-time staffer and went freelance. It's been three decades of ups and downs, but I've never regretted it for a minute. Standard office life was never for me.

Here's to the next 30!

A Private Spy - The Letters of John le Carré

 

Title: A Private Spy - The Letters of John le Carré 1945-2020

Author: Edited by Tim Cornwell *                                                                                                                                                                                                                                                                                                                                         

Publisher: Viking

Pages: 713 including chronology, acknowledgements, sources and index

Price: £30.00

Format: Hardback

Published: October 13 2022

ISBN: 9780241550090

Anyone who has known John le Carré, either directly or indirectly, under his pen name or as David Cornwell, even David John Moore Cornwell, will find much of interest in this collection of his letters, faxes and emails, from the age of 14 to just before his death, aged 89, on December 12 2020.

Some will relish the letters to star names in show business and literature, of whom Alec Guinness, written to in connection with his decision to accept the challenge to play George Smiley in the BBC serialisation of Tinker, Tailor, Soldier, Spy, surely needs no introduction. Other household or near-household names include Graham Greene, Sir Tom Stoppard, Ben Macintyre, Victor Gollancz, Jonny Geller, Sydney Pollack, Pierce Brosnan, John Boorman, Gary Oldman, Hugh Laurie and Stephen Fry.

Others will relish letters voicing what some will today describe as 'unwoke' opinions relating to European political stability in the wake of the metaphorical collapse of the Berlin Wall. The writer makes specific and sometimes uncomplimentary references to French people, Germans, Poles, Serbs, Croats, Slovenes, Czechs and Magyars.

Members of the Downhill Only ski club, though, of which I am one, will surely rush to the index, looking for mentions of the club and Wengen, the beautiful village in Switzerland's Bernese Oberland where the club was born on February 7 1925 and remains a prominent sporting and social landmark today.

The DHO and Wengen first appear on page 19, in a section preceded by the statement from an email of December 20 2007 stating: I took part in the Lauberhorn Race when I was an English bloody fool and nearly killed myself. And a letter to Alec Guinness and his wife berating much of continental Europe (as alluded to above) is addressed from Chalet Chamois, 3823 Wengen, Switzerland (pp 297-298). This is immediately preceded by a thought-provoking letter on Salman Rushdie. “Absolute free speech is not a God-given right in any country. It is curtailed by prejudice, by perceptions of morality and by perceptions of decency. Nobody has a God-given right to insult a great religion and be published with impunity.”

Cue howls of outrage from followers of French author and philosopher Voltaire, a passionate believer in untrammelled free of speech, and nods of approval from followers of John Stuart Mill, one of whose famous quotes is: If all mankind minus one were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind.

On more mundane issues, there is a chuckle-inducing letter on page 199 explaining how le Carré/Cornwell had incurred unaccounted-for expenses of around £2,500, which included a contribution of $1,000 to the illegal Shan state army in Chiang Mai.

The references to opium caravans and heroin trading are echoed, the editor notes, in The Honourable Schoolboy, the second of the so-called Karla Trilogy. This book never made it on to the BBC screens not because of any literary failings, but because of the cost of filming in its exotic locations.

I sometimes joke that my wife and I had dinner with John le Carré and his wife at the Hotel Bären in Wengen; if we meet in the DHO Clubroom in Wengen, do ask and I will tell my tale. But I honestly feel from the merest skimming  of A Private Spy that I know something more of him and hereby pledge that Iwill resume working my way through the novels of his that sit on my bookshelf unread.

In the meantime, the book's coda is almost heartbreaking, telling briefly of his passing in the Royal Cornwall Hospital, of pneumonia. His wife, Jane, was in a separate ward in the same hospital but under Covid rules they were not allowed to meet. The last email from his iPad, we learn, was sent to his agent Jonny Geller. A true writer, he was wordsmithing to the very end.

* Tim Cornwell, David Cornwell's third son by his first wife, Ann Sharp, and a former foreign editor and arts correspondent for The Scotsman, died in May 2022.

If Gondolas Could Talk

Title: If Gondolas Could Talk

Author: John Hemming-Clark

Pages: 272

Publisher: Searchline Publishing 2022

Price: £10.99

 

ISBN 9781897864685

I do try to be honest in my opinion of books that I review, as my own reputation goes on the line every time.

I am not entirely sure that I agree with the publicity material surrounding If Gondolas Could Talk; I dipped into it at random and found every one of the items I sampled pedestrian and unsatisfying.

But how many light-hearted books about skiing are ever published, especially just in time to give as a Christmas present? And how many of that vanishingly small number feature an anecdote about Wengen, which will leave every DHO reader striving to work out which hotel the narrator was staying in?

The major clue is that she says it has a swimming pool, which narrows it down to three, as far as I can recall, not having been there since before Covid struck.

This is what John Hemming-Clark says about his book.

“Everyone* who has ever skied has a ski story - If Gondolas could Talk has one hundred and one of the very best.

“There are contributions by or about pop stars, MPs and royalty, but mostly they're people like me and you.

“I have skied nearly every year for the past forty years, and along the way I have amassed more than my fair share of ski stories. I can't believe no one has ever put  together such a book, but they have now!

“This is a diverse collection, mostly humorous, that feature Alpine ski resorts in the main, lifts, instructors, chalet hosts, hotels, restaurants, bars. lift attendants, cross-channel ferries, overnight stops, motorways, péages, dry slopes and other skiers. A sizeable number of the contributors to this book have been unable to return to the resorts from where their stories have originated.

“My own contributions are based on my inability to ski, learn a foreign language or behave at anything approaching a competent, let alone professional, level whether by design or accident, in and around the Alps. It appears from the offerings that I have received for this new book that I am not alone.

“You can read much more including an introduction to all the stories at www.johnhemmingclark.com/skistories. Here's a taster:
Les Arcs: Never mess with chalet staff's night off.
Cervinia: Safeguarding shocker with the ski instructor.
Chamonix: A not-very-friendly Café de l'Amitié.
Courchevel: L'andouillette AAAAA. Possibly the worst thing you can ever put in your mouth.
Gstaad: Accidental acquisition by an ageing aristocrat...
...and many, many more!

ISBN 9781897864685

Amazon: https://amzn.eu/d/abBGck8
More details: www.johnhemmingclark.com/skistories

As with all of my books, mirth guaranteed or your money back!

With best wishes.

John

*99.9%

Colditz: Prisoners of the Castle

Title: Colditz: Prisoners of the Castle

Author: Ben Macintyre

Publisher: Viking

Pages: 353 including aftermath, notes and index

Price: £25.00

Format: Hardback

Published: September 15 2022

ISBN: 9780241408520

I approached this latest “definitive” account of life in Colditz Castle during World War II with mixed emotions. As I’ve noted before in previous reviews of Ben Macintyre books, I've read and very much enjoyed much of his output, including Agent Zigzag, Operation Mincemeat, Double Cross, SAS: Rogue Heroes and Agent Sonya.

But Colditz is different. I've read so much about it before, from Pat Reid's The Colditz Story (first published in 1952) and The Latter Days at Colditz (1953), from Padre Ellison Platt (Padre in Colditz, 1978), Colditz The German Viewpoint, penned by Rheinhold Eggers, the German Security Officer (first published 1961) and Pat Reid's Colditz The Full Story (1984). Henry Chancellor's Colditz The Definitive History, published in 2002, is based on a C4 televison series, Escape from Colditz, which for the life of me I cannot currently remember.

I've seen the 1955 film The Colditz Story with John Mills. I devoured the BBC's multi-part series Colditz, shown between 1972 and 1974, and enjoyed it even more when I was able to binge watch it via YouTube some 40-plus years later. Let's not even mention the dreadful ITV two-part mini-series with Damian Lewis in 2005.

I need not have worried. Ben Macintyre's book is worth picking up if only for the array of images on the front, back and inside front and back covers. Inside, we see one of legendary flyer and double amputee Douglas Bader hauling himself and his tin legs into the cockpit of a Spitfire, another of two Belgian escapers being brought back to the castle at gunpoint and from the Colditz Museum a collection of fake uniforms, ropes, insignia and other escape aids assembled by Rheinhold Eggers, and the drawing of a New Year's eve 1942 conga of inebriated prisoners.

On to the text, a quick trip through the publisher's press release promises a tale of the indomitable human spirit, but also one of snobbery, class conflict, homosexuality (an issue addressed by Padre Ellison Platt in his work), bullying, espionage, boredom, insanity and farce.

The author's preface underlines the point, noting that participants in the Colditz drama included Communists, scientists, homosexuals, women, aesthetes and philistines, aristocrats, spies, workers, poets and traitors. “Many of these have hitherto been excluded from history, because they did not fit the traditional mould of the while, male Allied officer, dedicated to escaping,” he states. And then immediately goes on to highlight the traditional mould with the always absorbing story of the Franz Josef escape attempt.

The story of the glider is given due coverage, including the detail that a book sitting in the prison library, Aircraft Design (by Cecil Latimer Needham, a gliding pioneer who also invented the Hovercraft skirt) helped in the drawing of plans for the glider, which was “built from stolen bedboards and coated in old porridge”.

A much more sobering passage, in the Besieged section recounting the liberation of the castle by the advancing Allied forces, tells of the systematic murder of Jews held in a slave labour camp on the outskirts of Colditz. The average life expectancy in that camp in “normal” times was three-and-a-half months from arrival. I had never previously known of the existence of that camp, but it is well nigh impossible to accept that the likes of Rheinhold Eggers did not know of Jewish slaves there, stating that it “was an SS matter”.

Returning to Douglas Bader, I learnt that his long-suffering batman, Scotsman Alex Ross, had to carry him up and down stairs, make meals for him and wash his stump socks. And that while many young officers found Bader an inspiration, others found him intensely irritating, not least because his ceaseless goon-baiting antics provoked collective punishments that “adversely affected everyone in the camp”.

MI9, Ben Macintyre, recounts, did not dismiss out of hand a suggestion that an attempt be made to rescue him from the castle by landing a plane on a nearby Autobahn. “The government wanted Bader back in Britain and many in Colditz would have been happy to see him go,” we read.

In the Aftermath section, we learn that Bader called Ross a “cunt” in a telephone call made in an attempt to locate his tin legs, two weeks after returning from Germany. Ross never spoke to him again.

I have to be careful about making comments on value for money as I am sampling a complimentary review copy, but the book seems to me to be worth the purchase price for the photos and other images alone. This is a book for keeping in one's library and savouring. It will be staying on my shelves per omnia saecula saeculorum, and I fully expect it to grow in texture with regular re-reading.

 

 

 

 

The issue of WHT reclamation: the view from Northern Trust

Helping out with a recent feature I wrote about withholding tax reclamation for Asset Servicing Times magazine, Howard Rapley, global product lead, securities services at Northern Trust, emailed his views on the topic right on deadline. Unfortunately they did not make it through to the published pages, but Northern Trust has agreed that I can use Howard's contribution here.

Brian Bollen: What are the main themes and big issues currently relating to WHT that affect asset managers, custodians and their clients and other market participants or market servicers? 

Howard Rapley: We see a convergence of two key pillars, harmonisation of the withholding tax landscape alongside increasing attention and governance from regulators.

Every market has its own set of rules, typically with specific documentation requirements and manual handling processes. This makes sense if you consider that entitlement has to be evidenced against local rules, however it places technical and administrative burdens on both clients and service providers working to pursue relief across multiple jurisdictions.

For instance, one of the challenges faced by clients is completing the various different tax forms while ensuring their technical veracity. Asset managers and custodians face the similar challenge of navigating a web of disparate tax procedures at scale, whilst also supporting their clients.

Additionally, with increased scrutiny from tax authorities, we anticipate the need for even more data and information sharing across market participants. This forms the basis for industry discussions around harmonised tax systems to drive a more efficient tax landscape.

BB: Have those changed in recent times? 

HR: We have seen an increased focus on effective beneficial ownership, which extends through many different concepts from; legal form and structure, tax transparency, evidential documentation, transaction activity, and trade motivations.

BB: Have there been recent regulatory or cultural developments in any major markets that we ought to be more aware of?

HR: As part of the continuance of market change, the last six months presented a number of market consultations in the tax space. These afford the industry an opportunity to consider initial proposals, provide feedback, and engage with policy makers directly to influence change. Notable recent developments include:

EU: Consultation on Action 10 of the Capital Markets Union (CMU) plan to alleviate tax associated burdens to cross-border investment.

Germany: Updates on the Reform of the German Withholding Tax regime, including modernisation of withholding tax procedures.

Finland: Early adopter of the Tax Relief and Compliance Enhancement model (TRACE), a regime that is now live but one that has undergone extensive industry discussion over many years.

Sweden: A new proposal that is under consultation and shares some attributes of the Finnish framework.

Denmark: An example of a live consultation that could see changes to the mode of tax reliefs available to investors, depending on their profile.

Poland: not a regime overhaul per se but an example of an extremely fluid sequence of legislative changes. 

Market and regulatory changes are not new phenomena. Custodians and service providers have always needed to navigate a complex and disparate rule book to provide global tax services to their clients at scale. These market developments reflect this and illustrate a range of perspectives – from those taking a central view on opportunities for market harmonisation to those with a more insular view.

However, the emergence of innovation and new technology heralds the opportunity for a paradigm shift, where key concepts of governance and market efficiency may more easily co-exist. After many years of industry debate, we could be at the precipice of real transformational change meaning that market advocacy efforts and input into industry consultations have never been as important in the tax space as it is right now.

BB: Can we expect to see further technology or infrastructure development? 

HR: It is clear that digitalisation will reshape financial services and regulatory changes continue apace to ensure the banking system and all of the inherent layered protections remain robust and resilient. This presents interesting opportunities to create a brave new world where, for instance, digital tax identities integrated within distributed ledger technology might connect beneficial ownership principles to the asset and income record.

One of the benefits of digitalisation will be the step-away from iterative, gradual, and layered change towards a first-principle approach. The global tax system is full of market standards that have developed over time through a layering of rule changes making them complex -- not necessarily by design, but by evolution.

Yet opportunities will exist for all parts of the value chain to innovate. And for those providing tax services to their clients, this may provide them with the edge they need to increase alpha, improve client experience, and differentiate their product.  

 

 

 

 

Sadness Boosts Sustainable Investment

 Emotions have a strong influence on purchasing decisions. Because of the growing popularity of assets with a strong focus on environmental, social and governance (ESG) goals, scholars decided to look at what role emotions can play in determining people’s preference for sustainable investments.

In a new paper published this month in the journal Economics Letters, professors Alexandre Garel (Audencia), Adrian Fernandez-Perez (Auckland University of Technology) and Ivan Indriawan (University of Adelaide) found that pessimism and worse mood are associated with greater investment in sustainable assets.

US Heads to the Moon, but European Inflation Remains on a Rocket Trip

Mark Dowding, CIO of BlueBay Asset Management, looks at UK recession risk, and European, US, and Japanese inflation.

Global yields continued to move higher over the past week, as markets discounted a progressively more hawkish path for monetary policy in the months ahead. In the US, money markets now project rates peaking around 4% at the end of Q1 2023. With inflation now on a downward trajectory, we think this is broadly in line with fair value. The latest print on PCE Core inflation (the Fed’s favoured measure) stood at 4.56% in July, down from a peak above 5.3% earlier in the year.  By the end of 2022, we think that this reading could decline towards 3.5%, as base effects push the year-on-year rate lower. A strong dollar, declining oil prices and a cooling in demand, following fiscal and monetary tightening earlier in the year, are all helping to restrain price pressures. However, the Fed is likely to remain very alert to secondary inflation effects, in particular, evidence that wage costs are accelerating in a relatively tight labour market.

Energy Crisis and Inflation Dampen Growth Prospects

Nordic corporate bank SEB has released its latest Nordic Outlook report this morning. The report contains SEB economists' views on Swedish and worldwide economic developments, including the policy dilemmas brought on by the energy crisis and accelerating inflation, the impact of China’s strict COVID-19 policy on long-term growth, key forecasts and analysis of other major trends affecting the world economy. 

It also includes an in-depth article on the economic effects of the war in Ukraine, and examines quantitative tightening in monetary policy, mild recession expectations, and Sweden’s upcoming election. 

Please see the top line points below. A link to the full report can be found here; the following represents the contents of the associated press release, ad verbatim.

Fed Affirms Hard‑Line Approach to Taming Inflation

In Jackson Hole, Federal Reserve officials unequivocally emphasised their commitment to bringing inflation under control – even as the U.S. economy slows.

By Tiffany Wilding, North American Economist, and Allison Boxer, Economist, at PIMCO

Market participants listened closely to Federal Reserve officials at the annual symposium in Jackson Hole, Wyoming, for any sign of how committed the central bank remains to fighting inflation amid concerns about the associated costs to growth and employment.

PIMCO: Fed Reaction

By Tiffany Wilding, North American Economist at PIMCO

• As widely expected the Federal Reserve raised their target interest rate by 75 basis points taking the midpoint of their target rate range to 2.35% - just below their estimate for a neutral policy stance in the longer run.
• At the press conference Chair Powell also guided that “modestly restrictive” monetary policy is warranted by the current economic fundamentals, including elevated inflation, and mentioned that another outsized move in the Fed Funds rate may be necessary in September in order to ensure monetary policy is restrictive.

Risks remain as China takes path to normalisation

By Carol Liao, China Economist, and Allison Boxer, US Economist, PIMCO

 

• Renewed growth in China’s manufacturing activity, coupled with softening developed market demand, should ease some supply-side pressures – but several other inflation risks remain prevalent.

 

After months of COVID-related disruptions, China’s economy looks to be on the path to normalisation. In June, new daily coronavirus case counts stabilised in the low hundreds. More people are hopping on planes and trains, intercity highway traffic has rebounded to pre-outbreak levels, and city traffic is congested again.