Investor Confidence Growth in Worldwide Economy

The Dow Jones Industrial Average has for the first time closed above the 17,000 mark as confidence from investors grows in the world wide economy. The stock index for the US which consists of the biggest companies in business increased by 92 points to close for the day at 17,068.

 

A report which stated that in June there were 288,000 jobs added by the US economy had a positive effect leading investors to push shares higher. Moreover, low interest rates have played their part in the up rise as that has led to investors pouring in money. Among other US indexes to have increased is S&P which saw new heights this year. The Dow recently closed at its 13th highest for the year while on the other hand the S&P 500 reached a 24th highest close in 2014.  

Slowly but surely

An increase in acquisitions and mergers as well as a string of other positive economic news has fired up investors and earned their confidence. All in all making Wall Street a much brighter place to be. The latest positive job figures to be released in the US was the icing on the week for global positivity along with China’s manufacturing productivity reaching a six month high.

Benedict Willis who works for Princeton Securities stated in an interview “the economic data we continue to get is not exceptional, but it is still positive” making his position on the New York Stock Exchange a touch more comfortable.

The worry which many investors had earlier in the year was that the rising stock prices would not be supported by actual growth in the economy. However, Mr Willis stated that so long as the economic figure continue to rise then that should be sufficient to support investor confidence and not raise any concerns. He further expressed his personal confidence in saying that he expected the stock markets to continue rising.

While on this subject, it is important to give credit to the Federal Reserve who have heavily influenced the pouring of money into stocks over the past year and a half by keeping interest rates at rock bottom. The Fed has made tremendous efforts to keep the rates at record lows and have succeeded in their mission which was to encourage banks to provide loans in order to stimulate the economy and with it to progress growth.

Restricting Speculative Investments: The Volcker Rule

The Volcker Rule forms a key part of the Dodd-Frank Wall Street Reform and Consumer Act – specifically section 619 – aiming to restrict banks in the United States from making speculative investments that will not, and do not, benefit their customers.

Though the Dodd-Frank act is already law, the Rule itself is set to come into play in July of 2014 (the Act allows for a two year conformance period), having been the centre of regulatory debates since it was first proposed, and will affect every US federally insured depository institution. It will also affect any company that controls an insured depository institution (IDI). Any private investment funds dealing with the affected banks will also be subject to the rulings.

What does the Volcker Rule do?

The Volcker Rule aims to prohibit banks from engaging in what it terms “proprietary trading” – which is, in the words of the Rule itself, defined as: “engaging as principal for the trading account of the covered banking entity in any purchase or sale of one or more covered financial positions.  Proprietary trading does not include acting solely as agent, broker, or custodian for an affiliated third party.”

The Rule does not stop the banks from trading completely, but it tightens the controls on such activity and requires stronger documentation. It will be overseen and implemented by five separate government entities: the Federal Reserve, the U.S. Securities and Exchange Commission (SEC), U.S. Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC).

Who will the Volcker Rule affect?

Although the rule primarily bounds only banking institutions in the US, all global banks will likely be subject to Volcker, as any party to a trade that is in the US will be included in the agreement. This means any affiliates of US banks, including overseas bank branches, as well as any foreign banks with operations in the States, will be affected.

Non-banking financial institutions like insurance companies and hedge funds are not affected, and only the larger investment banks – such as Morgan Stanley, who agreed during the financial crisis to become banking institutions – will come under the remit of the Rule.

Ensuring conformity

Any organisations that are affected by the Rule will need to establish a compliance program to address their conformity, and meeting these standards will not be easy for many more complex institutions. Distinguishing market-making from proprietary trading, which is restricted by the Volcker Rule, requires regulators to apply five factors: risk management, source of revenues, revenue relative to risk, customer facing activity and payment of fees and commissions.

Institutions have two years from the date of Dodd-Frank’s enactment, giving a final deadline for compliance of July 21st 2014. During this time, they must perform four key duties:

- Prepare for full compliance in 2014

- Put together a detailed conformance plan

- Show a “good faith” effort to achieve compliance during this period

- Prepare for possible record-keeping and reporting requirements that federal agencies may impose before the 2014 implementation

Tools such as the London Stock Exchange’s UnaVista can help with conformance by providing data consolidation, regulatory reporting, reconciliation and advice for any one affected by these and similar legislations.

How Long Before You’re Reimbursed PPI

The mis-selling of PPI has become a huge issue in the UK. While there are some people who bought their payment protection insurance or PPI from their bank when they took out a loan, credit card or mortgage, many started paying for their PPI without them even realizing its costs had been added on. This is because many loan providers instantly added a PPI policy to the accounts of their clients – the huge commissions they got for each PPI policy sold explain why.

This is the reason why many individuals today are advised to check their loan or credit card accounts to see if they were paying for PPI all this time. Of course since you paid a lot of money for it, it’s only natural that you want to make use of it in case you too experience financial issues when paying for your debt. Unfortunately, banks will now reject PPIs and the only way you can still get money out from your PPI account is by filing a PPI claim.

How Long Do I Have Wait to Get Compensated?

Let’s say that you are one of the many people who filed for their PPI claims and you’re wondering when you will be reimbursed. Sadly, the compensation you’ll get from your PPI claim will take a while to be processed. While the help you’ll get from the Financial Ombudsman Service is free, your documents will take a couple of months to be processed. Keep in mind that there is a large backlog at the Financial Ombudsman Service. The FOS receives around 750 cases every week and PPI claims and complaints make up for more than ¼ of all these new cases. You can expect your PPI claim to be settled by the FOS after 8-9 months.

However if you’re experiencing financial or health troubles and you need the money fast, or you just don’t want to do all the paperwork yourself, you can also get in contact with a PPI claims specialist, like PPI Claims Advice Line.  With this company, some people have had refunds within 2 months of filing for a PPI refund. Note however, that claims companies will do all the work and get you a payment more quickly, in return for a fee from your compensation payout should it be successful.