Global regulation emerges as Sibos key theme
Dissatisfaction with global regulators has been expressed during the entire Sibos week. During the market infrastructure session earlier this week, Michael Steinbech, chief executive of Equens, said while the financial industry, post-financial crisis, asked for regulation, it needed to be regulation that was formed by regulators and the industry sitting together and defining the rules. “Regulations have to be more business-oriented,” he said. “We need to get rid of the Chinese walls between the industry and the regulators.”
Kevin Brown, managing director and global head, transaction services at Royal Bank of Scotland, said the World Payments Report (which is published by RBS and Capgemini) identified 35 separate industry initiatives and regulations globally, for the payments industry alone. “We, and many of our clients, operate internationally. We are not seeing consistency in regulations. We are seeing a cascading effect, where one area of regulation moves into another region but we are not at a point where there is consistency in how regulations are applied.”
This is a theme also taken up in a white paper issued by Citi at Sibos. The Stable Future: transaction banks in the post-crisis world urges regulators to be careful: “It would be undesirable if features of the new [regulatory] order were to unnecessarily constrain transaction banking services. One aspect, we think, has not yet received sufficient attention at policy level: the effects of the reforms on global network banking.”
As Citi points out, transaction services depend on effective international networks, to connect ordinary buyers and sellers, to enable international trade, to help companies and governments manage their financial and commercial flows. “It would be harmful to all these users of the financial system if the reforms encourage transaction banks to ‘de-globalise’ into organisations with reduced reach and reduced capability.”
