Europe’s benchmark regulation is an ambitious attempt to protect consumers from price manipulation, but has left many industry participants feeling uncomfortable as the rules often collide with other directives.
Banks welcomed the use of external ratings as part of the regulatory risk assessment process. However, they still have issues concerning granularity and sensitivity as laid out in the latest ‘revisions to the standardised approach for credit risk’ published by the Basel Committee on Banking Supervision.
The rising threat of cyber-attacks is pushing regulators to pay closer attention to the resilience of banks and financial infrastructure providers.
Outside of the EU, the City of London would be faced with a very uncertain future though it may also present some opportunities as the UK would be free to sign its own trade deals and better fine tune its financial regulation.
Master netting agreements are key to capital efficiency for trading over-the-counter derivatives, but financial firms are leaving themselves open to regulatory challenges if those legal documents are not kept up to date.