Since the 2008 recession, regulation of the financial services sector, backed up with big fines, has introduced caution, slowed up lending and had a knock-on effect throughout the economy. Sally Percy reports
Falling foul of regulators can be expensive as a string of banks have learnt to their cost. Research from policy resource centre Good Jobs First in June found that banks and other financial services firms globally had forked out more than $160 billion in fines since 2010. And that was before Deutsche Bank was told to pay $14 billion for misselling mortgage securities in the United States.
Companies are far less likely than banks to be hit with a fine the length of a telephone number. Nevertheless, treasurers still need to navigate the world of financial regulation carefully if they are to spare their employer bad press, strategic risks and unexpected penalties.
“Regulation is omnipresent,” says Richard Abigail, group treasurer of engineering consultancy Arup. “Much of the regulatory pressure on us comes through the banking sector. Regulations on the banks transfer on to corporates. We have to do more and more to be regulatory compliant.”