While banks are still waiting for some of the dust to settle on the details of new global regulations, most are already undertaking strategic reviews to decide the future shape of their business. Major changes include withdrawing from certain countries or business lines, as well as reorganising structures and management systems to extract value from capital that is more costly, with higher regulatory capital requirements now imposed on most assets.
“The problem is not just individual bits of regulation, but where do the banks want their business to be in a few years’ time? Large banks are not always as joined up across their different functions as they need to be, so it is important to take a comprehensive view to avoid spending a huge amount of money just achieving compliance, without creating a business model that works,” says John Liver, head of global regulatory reform at Ernst & Young.
