Finance

Effective monetary policy undergirds price stability, and the complex synergy of many moving parts in today’s crisis-prone world presents new challenges to innovate as traditional instruments reach their limits. The European Central Bank has responded by introducing new tools to its toolbox, chief amongst them being policy rates, quantitative easing and targeted longer-term refinancing operations, which have pushed the boundaries, but the interaction between the policy instruments could be unpredictable.

Today’s professional accountant is expected to do more than juggle numbers; he or she increasingly participates in achieving sustainability objectives, which aim to ensure that a company’s resources are used to create not only monetary value but sustainable value today and into the future. To achieve this requires concerted multidisciplinary effort toward enhanced corporate reporting that addresses financial and sustainability concerns, guided by international accounting standards that incorporate sustainable value creation.

As calamitous as the pandemic’s effect has been on economies worldwide, in many cases, it has only fueled concerning issues that pre-dated it. COVID-19 will eventually be consigned to our past, but its effects will linger on for decades. What are the four questions we need to ask ourselves now to shape the best plan of action toward economic healing, sustained recovery, innovation, cooperation and prosperity while avoiding potential landmines?

Financial Institutions are often deliberate targets and unwitting participants in crimes, from money laundering to market manipulation. A relatively recent addition is Green Crime, which includes transgressions against the planet’s natural resources, such as environmental and wildlife crime. Fortunately, Refinitiv’s recent survey results show that the majority of those surveyed want to end ecocide atrocities such as illegal wildlife trafficking, recognizing the risks to not only to the health of the environment but also the financial system.

The COVID-19 pandemic halted the United States’ record-setting employment streak, causing the world’s foremost economy to shed nearly 10 million jobs in 2020. With warmer weather, vaccine rollouts and federal stimulus on the immediate horizon, employment numbers are picking up steam faster than expected, causing optimism to seep into financial markets. But the US has a long road to traverse before recouping all of its lost jobs and gaining more.

Compliance is a word that all companies, especially financial firms, need to know but is one that is not always enduring to boards and senior management. After assigning compliance officers the task of designing the compliance program, many executives lose interest and move on to more compelling concerns. But considering the potentially devastating risks to reputation and profitability of non-compliance, an effective compliance program requires continuous engagement, support and investment.

Crossing borders involves a myriad of challenges, including compliance with different tax regimes. Multinational enterprises, as the name implies, operate in multiple nations and face multiple tax regulations. International coordination of tax rules is crucial, especially as the digital economy grows, to address the inconsistencies and inequities of a patchwork system. In partnership with other organizations, the World Bank is working toward a more consistent and fair global taxation structure.

Financial institutions, coping with a tsunami of concerning issues, must face the reality of a more coordinated tidal wave of AML regulations, which regulatory regimes worldwide plan to enforce. The risks of disciplinary actions are too great for C-level and board members to ignore, so what developments do they need to know and what steps must they take to protect their companies, and themselves, from the consequences of compliance failure?

2021 brings a new administration to the White House and, with it, a more favorable outlook toward sustainability, especially climate change. How much this shift in policy will influence financial regulations and ultimately banks, especially in the US, is not yet certain. But banks should prepare for stronger pressure on the financial industry to contribute to the effort to foster sustainable development through stricter disclosure requirements and redirected investment goals.

The pandemic has had far-reaching consequences on the US construction industry, not only on volumes but also types of construction, introducing a slew of unprecedented challenges. The Associated General Contractors of America’s latest annual hiring and business outlook survey, an indicator of contractor sentiment, revealed different levels of optimism and shifts in project categories, as COVID-19 changes the land of the free, rendering some construction activities promising and others not.