Banks must build regulator ties

Author: | Published: 28 Apr 2010
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With greater regulatory cooperation in Europe inevitable, forging and maintaining relationships with European supervisory bodies should be top of firms’ list of priorities.

That was the message from panellists at IFLR’s European Capital Markets Forum in London, speaking at a session on the future of bank regulation.

“Even at the lightest end of European reforms, more centralised European regulation is inevitable,” said Michael Raffan, head of Freshfields’ financial services group. “Institutions must be ready for a shift from the domestic to the European stage.”

Peter Bevan of Linklaters agreed, citing the life of a competition lawyer – “back and forth on the Eurostar to Brussels” – as the model that will need to be adopted.

“There’s going to be a plethora of new bodies to interact and build relationships with,” said Bevan. “That’s the real challenge for institutions.”

Speaking on behalf of the organisation’s industry members, Lorraine Charlton from the Association for Financial Markets in Europe (AFME) drew attention to the potential conflicts that could arise between national, regional and even global regulators in a revised regulatory system.

“It’s a real concern where the lines will form around national and regional regulators,” she said, “and how those conflicts can be resolved.”

And Simon Dodds of Deutsche Bank insisted that a single European regulator was the most desirable outcome, despite admitting that at the moment “the regulatory space is one of chaos”.

“I would prefer, at the least, a properly coordinated European regulator,” he said. “Dealing with lots of different regulators and regulations is just a nightmare.”