Author: | Published: 30 Sep 2004
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The global financial services industry has grown accustomed to rapid change over the past two years. In the US, plunging stocks brought closer attention to conflicts of interest at leading investment banks. From there, attention turned to mutual funds and, more recently, to rating agencies. The Sarbanes-Oxley legislation passed in response to corporate governance failings has affected banking business also.

European regulators have examined these issues, too, as well as devoting much of their attention to the EU's ambitious Financial Services Action Plan (FSAP). This attempt to unify financial markets has placed a considerable burden on the industry. The FSAP imposes changes in areas ranging from accounting standards, through reporting requirements, to market abuse and the very structure of the industry.

The industry has raised concerns about several of the key directives. The liability regime under the Prospectus Directive, for example, remains unclear. Requirements to maintain detailed insider lists under the Market Abuse Directive have been pronounced unworkable by some sections of the industry. Most of all, banks are worried by the volume of new rules and the costs of implementing them. Brussels could try harder to consult with industry, particularly about the costs of change and whether the benefits make those costs worthwhile, they say.

In Asia, China continues to attract foreign banks, with as many as 100 licensed so far to conduct renminbi business and 53 allowed to provide services to domestic corporates. The recently created China Banking Regulatory Commission has implemented new rules and guidelines covering corporate governance, capital requirements and risk management. Meanwhile, measures to recapitalize some of China's biggest banks continue.

IFLR's Banking Yearbook provides those in the industry as well as lawyers in private practice with information about these and other changes. We hope you find the publication useful.