The G20 is spearheading introduction of tougher and more globally co-ordinated regulation of the Financial Services industry. Key areas of focus include identification and management of systemic risks, transparency of trading and incentives, as well as new consumer protections and improvements to resolution and recovery of international institutions.
Significant international initiatives, such as the update of the Basel Accords (Basel III), have been developed to provide for greater stability of financial markets via increased capital requirements and new leverage and liquidity rules. Other multi-jurisdiction changes have been proposed or enacted including introduction of bank levies and controls on executive compensation. The result, especially for large international banks, is a complex web of regulation posing fundamental challenges to existing business strategies, structures and business models.
In the US and in Europe, major regulatory changes are being planned and implemented in response to the G20 priorities. In the US, the Dodd-Frank legislation provides the enabling framework through which rules for the most far-reaching changes to FS regulation since the 1930's are being implemented. In Europe, new 'super-regulators' for Banks, Insurers and Asset Managers are being created from what were previously 'committees' of national regulators.
The political momentum for change is also reflected in cross-sector developments ranging from the tightening up of tax regulation through FATCA to the overhaul of IFRS financial instrument and insurance accounting.
Advanced Financial Services organisations are looking beyond narrow compliance at how developments will affect the attractiveness and viability of their business and operating models. Key considerations include the effective identification and management of risk, the competitive returns available from products and portfolios under the new rules, effective governance and efficiency of international organisational structures as well as management of the data and systems which will be required to provide reporting transparency.
PwC’s banking regulatory practice is aligned with your needs, enabling you to assess and address the strategic, operational and compliance implications of new regulation. Our clients draw on our global network of regulatory practitioners, many of whom have either worked for a regulatory agency or have been compliance or operations professionals in a major financial institution. We help clients to analyse, envision and adapt their business model to regulatory changes, using new developments as an opportunity to strengthen their businesses.