We all know that regulation in markets is nothing new and what it requires is a better analysis by firms on the cost of doing business in different markets compared to profitability. For some firms, we see aggressive actions to adjust their geographic footprints to avoid, at least for a time, the impact of the new standards. For other firms, we see productive and realistic discussions about how to address the new standards, including how booking models and other business operations need to change. In addition, we are seeing home country supervisors engaging in discussions with firms, asking important questions about how host country rules and regulations will affect group operations and seeking to understand the knock-on effects of the new rules across the global operations. As firms are adapting both business strategies and operations to meet home country and host country rules and regulations, we are hearing about the challenges that have been identified. However, there is still a lack of specificity around these challenges, including quantifying the impact – on business, strategy, customers and staff; identifying potential near-term mitigants; and developing proposals on potential longer-term solutions that could be the basis of a productive dialogue. Rhetoric is fine, but it’s not enough. We need to understand on a more concrete level how these changes are going to impact the firm, from your clients to your operations, from your business models to your culture.
The work of the Basel Committee on capital and liquidity standards, as well as the work of the Financial Stability Board (FSB) on cross-border resolution, are but a few examples of the hard work that global bodies have been undertaking to address the weaknesses identified through the crisis. At the same time, national authorities have been working hard both to implement the agreedupon global fixes, but also to develop and execute appropriate remedies for problems identified at the national (or local) level. Locally, while appreciating the need to address the  BIS central bankers’ speeches  1  crisis on a global scale, many countries saw the need to be in a better position to safeguard their own. The bottom line, in fact, was: the crisis was global, but the impact was felt locally. Global in life; local in death, as the saying goes. So, while authorities have endeavored to develop and implement common global rules across a wide range of issues, many national authorities have simultaneously moved to develop and implement national standards – that may conflict with or appear at odds with a barrier-free and harmonized financial system that allows the free flow of capital and competition across the globe. National rules that require local capital and local liquidity are two examples of standards that may present challenges to the efficient and effective operations of global firms. It will be important for firms to be in a position to meet both sets of requirements.