Regulation

The financial crisis has raised questions about the adequacy of the regulatory regimes governing financial services, which are being met with increasing demands and changes in the regulatory environment under which organisations operate.

For example, In the US, the Obama administration wants supervision of systemically critical institutions to be concentrated in the hands of the Federal Reserve and be backed up by more exacting capital requirements. In the UK, the Walker Report on governance calls on chairmen and non-executive directors to demonstrate more incisive understanding and willingness to challenge risk strategy. In the EU, insurers will need to assure supervisors that risk considerations are fully integrated into business decisions as part of Solvency II. Within emerging markets, the pace of liberalisation is set to slow in the wake of the crisis. Leading Financial organisations should be able to use the changes in regulation as an opportunity to develop a more systematic approach to governance, risk and capital management and use these capabilities to provide a more informed and assured approach to decision-making. Facing greater media and political scrutiny, they will also be able to balance the need to restore profitability with the expectations of being a responsible corporate citizen.