Lewes, DE -- (SBWIRE) -- 02/18/2014 -- Basel III regulations aim to overcome the shortcomings of the Basel II regime, which failed to effectively address risk exposures in the banking industry. The new regime proposes stricter capital and liquidity requirements for banks to ensure they remain resilient to financial shocks. It has also upgraded internal risk assessment processes and disclosure requirements to bring more transparency in banks’ functioning. However, given the weak condition of banks due to rising regulatory pressures, operating costs and falling profit margins in several key economies such as the US and members of the European Union (EU), the timing of implementation remains uncertain, with migration to minimum capital requirements already delayed until the end of 2018.
Prior to the economic downturn, financial services companies primarily employed high financial leverage to increase profitability. However, these companies have now been pressured to deleverage and seek alternative sources of profit by the changed economic picture, a rise in regulatory mediation, and competitive issues. In this altered environment, a new operating model is needed, one rooted in attaining the primary relationship – or at least one of the main relationships – with the customer, recreating trust, and forging active customer relationships. However, the global financial institutions continue to face numerous tests to bring stability back in the financial system and win customer trust.
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In Europe, which remains heavily in debt after the financial crisis of 2008 and the eurozone crisis, regulators have taken an aggressive stance. The 2013 banking regulations such as Capital Requirements Regulation (CRR) and revised Capital Requirements Directive (CRD 4), combined with the Liikanen proposal to ring-fence retail depositors’ funds, are expected to overhaul the banking industry in the region. On the other hand, the Asia-Pacific, Middle East and African regions show relatively low activity in bringing in new regulations compared to their Western counterparts.
Money laundering, terrorist financing and tax evasion are major ongoing issues faced by the banking industry, leading to various regulatory reforms worldwide. In the US, the Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 to address tax evasion by US citizens via foreign financial institutions and some non-foreign financial entities (NFFEs).
The report provides a detailed overview of regulatory initiatives taken by governments and regulatory bodies across the world in the past few years. It also provides an insight into emerging regulations such as Basel III, FATCA and Dodd-Frank, and their impacts on the retail banking industry.
The report provides a regional analysis of retail banking regulations and their impacts on banks operating in their respective regions. Along with meaningful insights into the impact of regulatory developments on banks’ key business lines and corporate structures, this report provides an overview of the level of regulatory enforcement in the banking industry across various regions.
The report covers major companies like Capital One Bank, Discover Bank, American Express, Citibank Indonesia, Barclays, Bank of America, JPMorgan Chase, Citigroup, Deutsche Bank, Credit Suisse, Royal Bank of Scotland (RBS), UBS AG and Rabobank in analysis.
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