Risk and regulatory transformation in banking Global

Global Risk and Regulation

Training in, and improvement of, the inspectors’ social competencies is considered as an essential dimension of reform experiences in Australia, Bogotá, the Netherlands and the United Kingdom. There are many reasons why the uptake of risk-based regulation principles in policy making and regulatory delivery is far from universal, and implementation often incomplete. This is due to a variety of factors, including resource and capacity constraints (changing regulatory approaches requires expertise and skills), but also public perceptions, and legal systems (Rothstein, Borraz and Huber, 2012[24]); (Rothstein et al., 2017[12]). Remote, “virtual” inspections can potentially save time and resources for regulatory supervision, increasing its efficiency, and its ability to reach remote locations or operate even in difficult circumstances (e.g. during lockdown situations such as imposed by the COVID-19 pandemic). Such virtual inspections involve inspectors reviewing documentary evidence and discussing with operators, but also observing sites through video streams. This can happen e.g. when remote surveillance tools are used too broadly or permanently, rather than strictly in conditions where the risk-level (high) and the risk characteristics (difficult to otherwise control or monitor) warrant it.

Broadcom Inc. Provides Regulatory Update on VMware Transaction – PR Newswire

Broadcom Inc. Provides Regulatory Update on VMware Transaction.

Posted: Mon, 21 Aug 2023 10:45:00 GMT [source]

The global economy was a bit like an ocean — sometimes it was calm and sometimes there were storms. People could create mechanisms to help the world ride out the storms as part of crisis prevention. In the same vein, those countries were tightening regulations in strategic industries such as mining and financial services. Countries were in the mode of reviewing their investment regimes, as well as revising and renegotiating their investment treaties.

In this turbulent business environment, many executives find the need to revise and adapt their strategies and operating models at a rapid pace. While managing disruptions, organizations are simultaneously dealing with internal digital transformation challenges, and how to bring along internal stakeholders as they automate business processes and drive digital into everything they do. Meet global trade and transaction reporting governance and control requirements with help from our automated platform. For one, many markets outside of the United States have grown to become global players, due to a number of factors, including ease of information exchange and the reduction of certain barriers to cross-border transactions. As a result, companies today are presented with more options when they are determining where to raise capital.

Global Risk Regulator – December 2021

The Fund must be credible and also financially strong which required that Governments adapt to the global economy’s increasing interconnectedness. He also emphasized the need to boost the participation of low-income countries in the global market. “We will continue to protect the share and representation of the world’s poorest countries,” he stressed. The organizations that have stood out from the pack in the past two years have not just managed existing risks — they’ve taken on new ones, and done so with confidence. They have the right resources engaged in making risk-informed decisions at the right time.

In addition, data sharing agreements e.g. with private certifiers active in areas of interest to regulators (for instance food safety) can likewise allow to have more comprehensive and updated information on sectors with vast numbers of operators (like food). Finally, the use of “non-traditional” data sources such as social media or reviews from e-commerce sites can help assess food safety or product safety risks. Using such sources requires automation to handle vast amounts of data (machine learning), but can be both effective and cost-efficient,7 and provides information that is broader and more timely than regulatory bodies themselves can obtain through traditional methods such as inspections. However, some may contend that regulation should not prioritise and rather (following the requests of a number of different stakeholders) try to regulate all potential hazards, regardless of e.g. likelihood or actual prevalence of harm. Organizations commonly use key performance indicators (KPIs) to measure performance against strategic objectives and to support decision-making.

Regulatory Risk from Regulatory Changes

Regulating every hazard may be possible on paper (though it leads to massive inflation of the volume of legislation), but allocating resources to control and implement these regulations can only be done within limits set by state budgets and levels of economic activity. Staff numbers and material resources (transport, testing etc.) needed for inspections conducted by state agencies are limited by budget resources, and competing against many other demands. Even when control over regulatory compliance is delegated to third parties (e.g. through requirements for mandatory third-party certification a.k.a. “conformity assessment”), these have a cost. While such controls are not anymore constrained by state budget size, they impose a direct cost to business operators (which, were possible, will seek to recover it from consumers). Thus, such use of third-party controls is also inherently limited – because of the costs it creates to consumers and businesses, and the negative effect it can have on competitiveness and growth.

To this aim, it is essential that regulatory agencies have adequate data management tools, and that they share data with each other as much as possible. Data sharing between regulators and other entities (non-regulatory, such as e.g. health-care providers or private certifiers) is likewise important to improve the effectiveness and efficiency of the entire regulatory system. In a number of countries, such improvements in data-sharing are made difficult by privacy regulations, or by the way in which they are interpreted and enforced. Furthermore, much of the information, which is important to improve risk analysis and assessment and might have privacy implications (like, say, health care or accidents data) can be anonymised fully before any analysis, as what matters for studying risk in that case are not the individual cases but the patterns. Ideally, such systems should provide updated data needed for risk assessment and planning on facilities, businesses and activities, and allow targeting and prioritising the selection of businesses subject to inspection in line with their risk level. They should enable recording of inspection results in a way that makes further analysis and follow-up easy and automatable.

The establishment of new, independent auditor oversight systems in other countries will enable more efficient and effective regulation of global audit firms. Twenty years ago, and particularly prior to the Bank of Credit and Commerce International (BCCI) scandal, banking supervisors had a less-developed approach to cross-border supervision. Importantly, at that time, banking organizations themselves often conducted operations in a relatively decentralized manner and local activities were not heavily dependent on either services or risk management infrastructure that resided in other locations. Banking organizations and supervisors were primarily focused on understanding and managing the individual pieces of the organization as opposed to looking at the consolidated organization. I appreciate the opportunity this morning to participate in your discussion of Global Risk and Regulation.


Our survey found that when organizations embrace risk management capabilities as a strategic organizational capability — where a community of solvers participates and teams have a panoramic view of risks enabled by internal and external data, together with smart technology — Board and executive confidence in achieving sustainable outcomes is high. They are five times more likely to be very confident in delivering stakeholder confidence, a growth-minded risk culture, increased resilience and business outcomes. And, they’re almost twice as likely to project revenue growth of 11% or more over the next twelve months. Strong risk management capabilities help protect an organization from downside risks and they enable it to look forward and take risks in pursuit of growth. An overly strong compliance culture can stifle innovation, for example, while too weak of a compliance focus can impact brand and reputation.

  • The latter aim at meeting public outcomes rather than processes and/or formal conformity.
  • The term “risk” can be confusing, because of its different meanings (both in different contexts, and even within the same context), but also of the different ways in which it can be assessed.
  • I understand that the panel that follows my remarks this morning will discuss the costs and benefits of financial reforms – looking at the trend toward enhanced information sharing, disclosure and enforcement in response to wrongdoing.

Delivering the keynote address during a panel discussion on “The world financial and economic crisis and its impact on development and prospects for restoring confidence and economic growth”, he said that macroeconomic policy coordination had seen disappointing results since 2009. The 2022 Global Risk Survey is a survey of 3,584 business and risk, audit and compliance executives conducted from February 4 to March 31, 2022. Business executives make up 49% of the sample, with the remaining 51% is split among executives in audit (16%), risk management (24%) and compliance (11%). Fifty-eight percent of respondents are executives in large companies ($1 billion and above in revenues) and 19% are in companies with $10 billion or more in revenues. Risk management capabilities should go beyond the traditional risk analysis and perform deep dives on these fast-moving, high-priority risks.

Driving consistency in risk management capabilities across the organization can be difficult. Oftentimes, disparate risk processes and systems are deployed, contributing to challenges in achieving a common and a consolidated view of risk. Investment in risk processes, frameworks and enabling systems is needed to help an organization deploy a standardised and consistent approach to risk management. While 75% of organizations report that having technology systems that don’t work together is a significant risk management challenge, just 35% of those are addressing that challenge in a formal, enterprise-wide manner.

Speaker Says as Second Committee Debates Economic Crisis

Among other things, it will require that we work to ensure that the PCAOB has developed an oversight program that effectively takes into consideration the level of “home country” supervision for non-U.S. As I mentioned, public accounting firms that are required to register with the PCAOB are subject to the Board’s inspection program. PCAOB inspections replaced the audit profession’s previous peer reviews, which focused on compliance with applicable standards but did not address the overall audit environment.

Global Risk and Regulation

It aims at enhancing international regulatory co-operation and maintaining high standards of product safety and quality, while facilitating the reduction of the regulatory burden for industries. Axel Bertusch-Samuels, the International Monetary Fund’s (IMF) Special Representative to the United Nations and its Deputy Director for Strategy, Policy and Review Department, said the IMF was striving to provide policy advice to help secure not only a sustainable and balanced recovery, but one that was also job-rich. The Fund had developed new instruments that examined the repercussions of a country’s policy from a multilateral perspective and also its spillover risks. “We will continue to protect the share and the representation of the world’s poorest countries,” he stressed. The top 10% of respondents — the ones that are realising benefits from strategic risk management practices — expect faster revenue growth and better outcomes.

Global Risk and Regulation: The Role of the PCAOB

When I received the invitation to speak here today, I initially wondered what perspective I could offer a group of tax experts that would be of value. Your focus during these two days will include analysis of the impact of regulatory and control regimes, financial disclosures and multi-jurisdictional oversight. Further, I only had to get to the second paragraph of the introductory letter from Roger LeMaster and Douglas Bates before the Sarbanes-Oxley Act was mentioned. At that point I had a clear sense of how I could contribute to your deliberation at this conference.

Global Risk and Regulation

As financial system instability remained the root cause of the crisis, completion of those reforms was necessary, he said, stressing that market participants needed more clarity. To deal with those challenges, he said the international community needed to increase international policy cooperation and coordination to address the continued weakness in global aggregate demand. Further steps were needed to improve regulation and monitoring, while efforts to reform the international financial architecture had to continue. Finally, a strengthened international governance framework was necessary for addressing those issues on a global level. The PCAOB works hard to achieve its objectives, but part of this hard work is looking carefully at programs and requirements, and their impact. I am encouraged that the PCAOB oversight program is contributing to a reduction in the risk of financial reporting failures and a renewed confidence in financial reports of publicly traded companies and ultimately in the U.S. securities markets.

Global Risk Regulator – September 2021

First, and most visibly, the direct health risk posed by the pandemic, and the negative economic and social impact (including other negative health risks) generated by “strong” responses such as lockdowns. The RAC project in Italy, funded by the European Commission and implemented by the OECD, aims at supporting regional and national governments in improving the business environment and investment climate and the efficiency of the use of public funds through improved regulatory predictability and confidence, and reduced burden on lower-risk activities. To achieve better outcomes in regulatory delivery, inspection methods and practices on the ground are being transformed, consistency of inspections improved, and efforts towards clearer and more understandable regulatory requirements for business operators undertaken. Among other elements, the 2014 Code (and the 2008 Code before this) also provides the legal basis for the “Primary Authority” scheme, which enables businesses to receive advice from inspectorates on how to meet regulation through a single contact authority (see Box 6.8). The scheme is based on a risk-based approach that allows inspectorates to promote regulatory compliance. The code also included the common inspiration for the way such Authority scheme works and empowers the Office for Product Safety and Standards to manage it.

Global Risk and Regulation

CONAMER is working on the development of an information system to support the implementation of the risk-based approach (OECD, 2020[36]). While some elements of good regulatory practices are, to an extent, directly observable relatively easily (e.g. the existence and level of uptake of a consultation mechanism), it typically requires more expert investigation to assess the degree to which risk is actually and rigorously taken into account in regulatory policy. Looking into the application of risk at the regulatory delivery stage is even more painstaking, for high-level statements of delivery institutions do not necessarily match practices “on the ground”, and the number and variety of institutions involved is considerable. Still, in this edition of the Regulatory Policy Outlook, we attempt a first, preliminary and tentative stock-taking of the current uptake of risk-based regulation, both at the regulatory design and delivery stages. Comparing the relative levels of risk, and deciding on the appropriate type and intensity of regulatory response, requires having gone through risk assessment – i.e. estimating the relative level of different risks in terms of combined probability and severity of harm.

UK government’s focus on improving international competitiveness via changing the Senior Managers and Certification Regime appears at odds with some industry views. Cracks in the $20tn commercial real estate market are piling pressure on exposed lenders, just as regulators urgently steer troubled banks to avert a full-blown banking crisis. After years of watchful waiting, financial regulators are starting to crack down on the ballooning $239.3tn shadow banking sector.

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