Regulatory Arbitrage

How to Prepare for New Regulations

(Part 11 of 20) 3:50

Avoid putting the various initiatives into silos or pockets. Instead, create an over-arching program for managing regulatory change.

For additional information on scenario planning and global banking download our free video-enhanced eBook Global Banking 2020: Foresight & Insights.

Also posted in Managing Regulations, Scenario Planning, Video 7: Global Banking 2020: Using Scenario Planning to Guide Strategies |

Regulatory Arbitrage, More Regulation Increases the Appeal

(Part 12 of 20) 3:08

Watch for opportunities to increase as countries and regions adopt different levels of regulation.

For additional information on scenario planning and global banking download our free video-enhanced eBook Global Banking 2020: Foresight & Insights.

Also posted in Managing Regulations, Scenario Planning, Video 7: Global Banking 2020: Using Scenario Planning to Guide Strategies |

What Happens If the Regulatory ‘Playing Field’ Is Not Level?

2:27 (Part 4 of 14)

Given that regulatory guidance is being developed by global regulators and policy makers to ensure the stability of global financial institutions but ultimately will be implemented at the national level, there are concerns about these standards being realized in a consistent way from one jurisdiction to another. “Banks grow globally and they die on a national basis,” says Ernst & Young’s Bill Schlich. “When they die is when … the rules that each different country imposes become very important.”

Also posted in Governance, Managing Regulations, Risk Management, Video 5: SIFIs Rules Are Recasting Global Banking |

How Will Additional Capital Controls Affect SIFIs?

3:15 (Part 5 of 14)

Increased capital requirements are lowering the return on equity for many global banks. However, stricter rules may help the “biggest of the big” financial institutions to be viewed as less risky or as “premier counterparties.”

Also posted in Governance, Managing Regulations, Risk Management, Video 5: SIFIs Rules Are Recasting Global Banking |

Risk-weighted Assets – What Happens When Enforcement Differs by Region?

4:35 (Part 6 of 14)

In addition to stricter capital requirements, SIFIs will have to manage risk-weighted assets. The dilemma for regulators is how much discretion to allow banks in assigning different levels of risk to their assets. There also is some tension between banks and different geographies, such as the U.S. and Europe, in terms of whether they are risk-weighting their assets in the same way.

Also posted in Governance, Managing Regulations, Risk Management, Video 5: SIFIs Rules Are Recasting Global Banking |

The Tension between ‘Too Big to Fail’ and Moral Hazard Continues

7:05 (Part 7 of 14)

On the one hand, SIFI designation can restrict banks with tighter rules. On the other hand, the designation could cause some investors and counterparties to view a SIFI as more likely to get bailed out if trouble arises. Regulators continue to struggle to find the right balance.

Also posted in Governance, Lessons Learned from the Financial Crisis, Managing Regulations, Risk Management, Video 5: SIFIs Rules Are Recasting Global Banking |

Will SIFI Designations Succeed?

4:52 (Part 8 of 14)

Many observers see the SIFI designation process as an improvement over how risks were governed in the past. Ideally, a fully functioning SIFI regime would provide a seamless regulatory process across borders. But variations in how different jurisdictions might handle an actual crisis mean that much uncertainty remains.

Also posted in Governance, Lessons Learned from the Financial Crisis, Managing Regulations, Risk Management, Video 5: SIFIs Rules Are Recasting Global Banking |

The Volcker Rule and Regulatory Arbitrage

5:12 (Part 5 of 8)

Each country will decide for itself how to create a safe banking environment and not all key markets will choose exactly the same road. That will put some countries at a disadvantage.

Also posted in Emerging Markets, Managing Regulations, Transparency, Video 2: Regulatory and Growth Challenges Face Global Banks |

Global Banking Challenges – Emerging vs. Developed Markets

3:30 (Part 6 of 8)

There is a broad agreement that emerging markets will offer more opportunities than developed countries in the years immediately ahead. But which ones?

Also posted in Banking: Future Growth Models, Customer Focused Products, Emerging Markets, Managing Regulations, Video 2: Regulatory and Growth Challenges Face Global Banks |

How Level Is the Playing Field?

2:36 (Part 5 of 11)

It will take some time for the banking industry to sort out how all the new regulations will be implemented. Expect the regulatory playing field to be uneven for a time, perhaps offering opportunities for regulatory arbitrage.

Also posted in Banking: Future Growth Models, Lessons Learned from the Financial Crisis, Risk Management, Video 1: Banking: The Road Ahead |

Regulatory Impact on Return on Equity and Dividends

4:51 (Part 6 of 11)

Expect returns on equity to go down, the cost of capital to go up and margins to shrink. Banks will have to adapt. There is a lot of interest in migrating to businesses that require less capital and liquidity, and that are more fee based. But what does that mean for banking when it comes to credit creation and intermediation.

Also posted in Banking: Future Growth Models, Lessons Learned from the Financial Crisis, Risk Management, Video 1: Banking: The Road Ahead |

Banking: The Road Ahead

36:51 (Full video)

Global banks, following the financial crisis, face a level of uncertainty not seen in decades. Among the chief challenges are: massive re-regulation; strong downward pressure on profits; a demand for significant IT investments; and the need to innovate to build new growth models capable of tapping rapidly developing emerging markets.

In this video series, professionals from Wharton and Ernst & Young offer insight into these and related key issues.

Also posted in Banking: Future Growth Models, Customer Focused Products, Emerging Markets, Innovation Revisited, IT Investments, Lessons Learned from the Financial Crisis, Managing Regulations, Rebuilding Trust, Risk Management, Video 1: Banking: The Road Ahead |