The remorseless rise in regulation has become the greatest risk facing the banking sector according to the latest ‘Banana Skins’ survey conducted by the Centre for the Study of Financial Innovation (CSFI) and sponsored by PricewaterhouseCoopers.
The CSFI survey features a league table that identifies potential sources of risks to banks and ranks them by severity. This year’s survey is based on a record number of responses from 440 bankers and close observers of the banking scene in 54 countries.
The report finds that:
- Regulation overkill saps bank resources, reduces risk diversification and creates a false sense of security. This threat is particularly strong in the EU and North America.
- Other fast-rising risks identified are hedge funds, electronic fraud, as well as currency risk due to the current weakness of the US dollar.
- Corporate governance risk, closely linked to over-regulation, is given a high place in the rankings because respondents, particularly bankers, perceive it to be part of the regulatory threat.
- Other high level risks include credit risk and derivatives. Unrest in the Middle East also gave a strong boost to commodities, where potential instability in the oil and gold markets is seen as threatening.
Hard copies of the report (£25/€40/$45) are available through Central Books Website:
www.centralbooks.co.uk Tel: 0845 458 9910 or + 44 20 8986 5488.
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