GRS Interim - Regulatory Change Initiatives

Since 2001, many new regulations have been introduced that directly affect the business practices of financial institutions. Although viewed individually as significant hurdles, management teams that take the right, integrated approach to their implementation can significantly lessen their regulatory compliance burden.

Financial institutions will initially pay a high cost for compliance. A recent survey commissioned by the EU indicates that one third of large banks in the EU expect to spend more than 100 million euros (20 million) to achieve compliance. And IT budgets will form around two thirds of that spending.

They will, however, also be real benefits seen by compliant financial institutions, including greater operational efficiencies, better capital allocation and greater shareholder value through use of improved risk models and reporting capabilities. This will lead to more consistent profits and reduced volatility of credit losses by consistent risk spreading, more effective deployment of capital, and the ability to make better business decisions.

According to data from the EU, 41% of European banks are expecting to see major benefits from a reduction in operational losses through their compliance implementations.

Click on the links below for more information on current initiatives:

Basel II

SOX – Sarbanes-Oxley

MiFID – Markets in Financial Instruments Directive

PSB – Prudential Sourcebook

CRD – Capital Requirements Directive

Solvency II

IFRS/IAS

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