The COVID-19 pandemic upended almost all industries, including investment banking. Once bustling trading floors quickly transformed into a dispersed network of home offices and new operational risk challenges arose. Technological innovations and an ever-evolving regulatory landscape have made archaic approaches to operational risk management ill-suited to tackle the complexity posed.
2020 wasn’t a good year for shareholders scheduled to receive bank dividends. Regulators swiftly put a halt to dividend payments from banks to ward off a pandemic-induced crisis, requiring lenders to conserve capital and distribute it as needed to consumers and businesses. The dividend pipeline is slowly reopening as confidence grows in the banks’ stability, but it may be a while before shareholders receive their fair shares of the profits.
Basel III, a regulatory framework designed with the goal of enhancing international financial stability in the aftermath of the global financial crisis, was tailored to banks in advanced economies. However, regulators in emerging markets and developing economies (EMDEs) are also embracing these standards, even though doing so may pose challenges to their financial development. How can Basel III be made to work for EMDEs? A new CGD Task Force report makes several recommendations.
For the 28 jurisdictions that are members of the Basel Committee on Banking Supervision, adopting Basel banking standards is a given. But why are some non-member developing countries embracing the reforms when they don’t have to? The answers vary by country, but the final lesson is that regulators should carefully evaluate the advantages and disadvantages of adopting Basel regulations in whole or in part for their nation’s unique situation.
The global financial crisis of 2007-08 left many marks behind, not the least of which has been increasingly complex financial regulation that has not been easy to uniformly enforce; meanwhile, digital technology is looming ever larger but has been relatively ignored by regulators, who are still coping with the decade-old crisis. The international regulatory debate should move towards a more forward-looking approach.
Sub-Saharan African central banks are racing to enhance financial regulation, especially surrounding capital conservation and balance-sheet fortification. Ghana and Uganda are the latest to join the race having enforced ever stricter requirements on their banks, falling into step with the rest of the world in the aftermath of the global financial crisis.
The Pakistan banking industry constitutes a total of around 31 banks, of which five are public-sector and four are foreign, while there are 22 local private banks. The majority of the banking business is concentrated in a select few in the industry—six banks are the largest competitors in the economy and hold a major stake of the banking assets in Pakistan.
Banks today need more than lucky breaks to thwart the increasingly persistent and clever efforts of cybercriminals. The risk-management function of every bank today is facing a growing myriad of ever-intensifying threats, from hackers to terrorists, but fortunately there is ammunition at their disposal.
For banking and financial institution executives – and for their investors – 2016 has begun on a sour note. From the largest money center banks to small local institutions, double-digit earnings declines were commonplace in the first quarter, as