PASLA: Pushback on regulation begins
01 March 2016 Singapore
Image: Shutterstock
Confidence in the Basel Committee’s recommended regulatory framework is being tested by several member states and senior financial figures, according to one PASLA/RMA conference panel.
Delegates at the PASLA/RMA Conference on Asian Securities Lending in Singapore heard that Denmark, Japan and the chair of the European Banking Authority, Andrea Enria, have all voiced concerns that the sheer volume and scope of financial regulation set to come into effect might not be in the best interests of markets.
Panel moderator Greg Lyons, partner at Debevoise & Plimpton, said: “Until now, no one has gone to look back at how all of these regulations fit together, or asked if they actually do more than they should be doing.”
According to Lyons, a state that amends or disregards minor aspects of the Basel framework may not have significant repercussions in its treatment by more compliant markets.
However, to fall substantially out of step with the wider consensus could pose serious problems for continuity in the wider market and invite extra burdens on businesses working within states with different frameworks.
“They [sovereign states] have a lot of scope to change [the Basel framework], but a lack of equality between states could be a problem,” added Lyons.
Lyons explained that in contrast to some EU and Asian states, the US was imposing regulation that in many cases went above and beyond those suggested by the Basel Committee on Banking Supervision.
The emerging trend of increasing divergence of the opinion on regulations, such as Basel III and the Financial Transaction Tax, could spell trouble for Europe, whose economy has so far benefitted from greater compatibility and cohesion across the region.
The audience heard how Asia, by comparison, had lagged behind in its overall economic development because of a lack of a unified governing body like in the EU. The patchwork quilt of Asian regulations was cited by one panellist as one of the key issues that the region needs to address in the coming years.
Looking forward at major events scheduled for this year, the panel agreed that, in the current political climate, the UK referendum on its EU membership, set for 23 June, could lead to an open revolt against what are seen as overbearing and unnecessary financial constraints.
Delegates at the PASLA/RMA Conference on Asian Securities Lending in Singapore heard that Denmark, Japan and the chair of the European Banking Authority, Andrea Enria, have all voiced concerns that the sheer volume and scope of financial regulation set to come into effect might not be in the best interests of markets.
Panel moderator Greg Lyons, partner at Debevoise & Plimpton, said: “Until now, no one has gone to look back at how all of these regulations fit together, or asked if they actually do more than they should be doing.”
According to Lyons, a state that amends or disregards minor aspects of the Basel framework may not have significant repercussions in its treatment by more compliant markets.
However, to fall substantially out of step with the wider consensus could pose serious problems for continuity in the wider market and invite extra burdens on businesses working within states with different frameworks.
“They [sovereign states] have a lot of scope to change [the Basel framework], but a lack of equality between states could be a problem,” added Lyons.
Lyons explained that in contrast to some EU and Asian states, the US was imposing regulation that in many cases went above and beyond those suggested by the Basel Committee on Banking Supervision.
The emerging trend of increasing divergence of the opinion on regulations, such as Basel III and the Financial Transaction Tax, could spell trouble for Europe, whose economy has so far benefitted from greater compatibility and cohesion across the region.
The audience heard how Asia, by comparison, had lagged behind in its overall economic development because of a lack of a unified governing body like in the EU. The patchwork quilt of Asian regulations was cited by one panellist as one of the key issues that the region needs to address in the coming years.
Looking forward at major events scheduled for this year, the panel agreed that, in the current political climate, the UK referendum on its EU membership, set for 23 June, could lead to an open revolt against what are seen as overbearing and unnecessary financial constraints.
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