The Banker Op-Ed: Finding a Better Approach to Global Regulatory Coordination
The following oped was originally published in The Banker in November 2014.
Kenneth E Bentsen, the head of one of the industry’s largest trade associations says international regulatory bodies need to do more to ensure coordination between national regulators on the construction and timetable of rulebooks for global derivatives markets.
It has been five years since G20 leaders met in Pittsburgh and declared their commitment to a globally coordinated approach to reform the financial system. That commitment is now in jeopardy. As world financial leaders meet this month at the G20 meetings in Australia, it is vital that they redouble their focus on regulatory coordination to avoid fragmentation of markets, protectionism and regulatory arbitrage that could stifle economic growth.
Global financial markets are intertwined, and regulators must acknowledge that policies and practices in one region will have a ripple effect across the world’s financial centres. To be clear, this is not a question about whether jurisdictions are pursuing the reforms agreed to at the Pittsburgh summit. In fact, according to the Financial Stability Board (FSB), the International Organisation of Securities Commissions (Iosco) and industry sources, all 20 jurisdictions are pursuing dramatic new rules regarding capital, prudential regulation and over-the-counter (OTC) derivatives.