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Combined regulation damaging financial services – BSA

by: Paul Robertson
  • 15/12/2014
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Combined regulation damaging financial services – BSA
A cumulative effect of UK and EU regulation on financial services firms, risks damaging innovation, diversity and competition the Building Societies Association (BSA) has warned.

The BSA said that while regulatory reform was necessary after the financial crisis no authority had considered the combined impact of the reforms and regulation was still applied in a one-size-fits-all way.

A survey of building society chief executives found the key effect of combined UK and EU regulaton to be the prevention of innovation and diversification into new markets and channels, a potential disadvantage to consumers.

Overall the top three issues were:

  • The volume of regulation – a top three issue for 94% of CEOs
  • A lack of regulation tailored to different types of firm – a top three issue for 74% of CEOs
  • The complexity of regulation – a top three issue for 61% of CEOs

Two-thirds of building society chief executives said that the current regulatory environment put their society at a competitive disadvantage.

The survey found 68% of CEOs expected regulation to be one of the three biggest uses of board time in the year ahead, up from 58% this year and 38% in 2010.

Robin Fieth, chief executive of the BSA (pictured), said: “It is telling that the prevention of innovation and diversification into new markets and channels comes top of the impact list for building society chief executives, only then followed by business volumes and profitability.

“No one has responsibility for assessing the cumulative impact of the regulatory burden. With new rules coming thick and fast from the UK and the EU there is a pressing need for this.

“It’s obvious that boards must regularly discuss and act on regulatory and compliance matters. What cannot happen is that this topic forces important issues like strategy, development, governance and customer service to the periphery.”

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