This raises all kinds of organisational and managerial questions, varying from the amount of autonomy that the business lines should have, to issues with regard to control frameworks and reporting lines. There is no easy answer. Secondly, financial institutions have to make sure that they comply with applicable laws and regulations in the jurisdictions where they operate.
As a result of the increasing globalization, financial institutions nowadays have to make sure that they are compliant with laws that have extraterritorial effects. These different legal requirements pose a challenge for institutions operating cross border. Another challenge is that our understanding of what constitutes sound operational management is continuously changing.