The final month of 2011 saw a surge of new consultations, reports and guidance from the Basel Committee, EU and UK.
The sovereign debt crisis continued to cause concerns in December, as many EU banks remain vulnerable, according to the EBA’s Recommendation and final results of bank recapitalisation. Banks need to build up exceptional and temporary capital buffers against sovereign debt exposure by June this year.
Looking ahead, we anticipate that 2012 will be a busy year for regulators, with a challenging regulatory change agenda both here and abroad.
For our financial institutions, regulatory change looks likely to drive strategic re-alignment and structural change over the next several years. December saw the Government confirming its intentions to follow through on the ICB’s recommendations to ring-fence retail banks and the report on the draft Financial Services Bill recommends more changes to legislation for the new UK regulatory bodies. For insurers, the Treasury's first proposals on implementing Solvency II were published in December. The SEC’s Volker rule proposals under the Dodd-Frank Act are causing both US and non-US banks and asset managers with US operations to look closely at the future of their group relationships.
These and other regulatory changes, together with challenging market conditions, will see many institutions re-thinking their long-term strategies in 2012.