Overwhelming majority of 97% of the financial services executives during a survey cast their doubts about the effectiveness and the positive outcome of the regulatory reforms being implemented by the UK and US.
However, financial services industry executives on both sides of the Atlantic agree that new regulatory reform measures designed to increase long-term stability won’t forestall future risks, according to a new survey from Protiviti, a global business consulting and internal audit firm.
Ninety-seven percent of respondents say new measures won’t prevent another financial crisis, though nearly half believe they will moderate the effects of one. Most respondents also reported that actions of the regulators will be more important than changes in laws in determining how financial services companies operate.
The survey examines the impact of regulatory reform on financial services organizations in the United States and the United Kingdom through insights from more than 100 industry leaders, including chief executive officers, chief financial officers, chief operating officers, heads of compliance and other executives.
The Protiviti survey reveals numerous areas of concern within the US and UK financial services industries. For example, 39 percent of all respondents said regulatory reform will have a negative impact on their organizations’ recovery from the global financial crisis. The response was higher among US respondents, with 54 percent anticipating a negative impact, compared to 28 percent of UK respondents. Just nine percent of all survey participants believe regulatory reform will have a positive effect on recovery efforts, while 52 percent reported there will be no effects.
“The survey results are relevant in Bahrain and the rest of the GCC, where regulators embrace international best practice standards, aiming to create more proactive regulatory regimes” said Andrew North, Managing Director of Protiviti’s Middle East Member Firm.
“Organisations that are proactive in considering how regulatory changes could affect their business will be better positioned to adapt to the new environment and gain a competitive advantage.”
Other topics addressed in Protiviti’s study include international coordination of regulatory reform; the effect of regulatory reform on company culture; and shifting of business operations to jurisdictions with more inviting regulatory regimes.
Protiviti conducted its Financial Services Regulatory Reform study in September 2010. Financial services industry executives and management-level professionals from the United Kingdom and the United States were invited to complete an online questionnaire designed to assess the effects and long-term impact of regulatory reform initiatives in their home countries and globally. More than two-thirds of respondents represent organizations with annual revenues in excess of $1 billion. This is the first in a series of surveys Protiviti plans to conduct that will focus on various financial reform issues.