Bank Industry Insights: April 2023 edition

As the banking industry evolves rapidly and our clients are navigating ever-changing market and regulatory developments, I've teamed up with our global network to outline our take on the most relevant updates to the bank industry. This month, we're focusing on restructurings, enforcement trends and operational resilience.

Who drives the restructuring bus? ( Nigel Ward )

The Institute of International Finance estimates that global debt hit a record of $300tn in June of last year, totalling a 349-per-cent of the world's GDP. As of 2022, Governmental debt had climbed to 102 per-cent of GDP with non-financial corporate debt reaching 98 per-cent. The world is a dangerously leveraged place. Nigel Ward explores the changes in it does.

The Rain falls mainly on the Plan: Restructuring Plans in Spain ( Giles Boothman , Jose Christian Bertram , Beatriz Satrustegui)

Spain introduced a new Chapter to its Insolvency Act in autumn 2022, partly to implement the 2019 EU Directive on preventive restructuring frameworks. This includes a restructuring plan which allows cross-class cram down and the first few Spanish restructuring plans are now beginning to emerge. But how effective is the new regime and how will the courts determine the critical question of what constitutes a class? Will we see more restructuring plans carried out in Spain, or will the trend of exporting the most complex restructurings to the UK or the US continue?

Regulation 10 years on: what next for the FCA? ( Nathan Willmott , Adam Jamieson , Max De Tommaso )

As the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) close in on their 10th birthdays since being formed as part of the suite of regulatory reforms following the 2008 financial crisis, we take a look at how individual accountability is high on the regulators' priority list and consider what we expect a real focus from both the PRA and FCA as they head into their 11th year.

Is enforcement action on the horizon for failed disclosures? FCA warning for ESG benchmarks ( Lynn Dunne , Andrew Sims )

The FCA has warned ESG benchmark administrators that they are failing to properly disclose sustainability factors in benchmarks. In a review of disclosures the FCA found that Benchmark administrators, which can be large financial groups, are not representing ESG factors correctly in benchmarks. This risks giving wrong information to funds and consumers. This article explores how the FCA will require all firms to make sustainability-related claims to ensure they are clear, fair and not misleading.?

Geopolitical Volatility & Geoeconomic Rivalry: Impact on Operational Resilience ( Jamie Ng , Nisha Sanghani ACA BFP )

The ongoing geopolitical volatility and geoeconomic rivalry across the globe have placed significant strain on organisations affecting their operational resilience. Events have led to disrupted supply chains, increasing costs, and uncertainty in business operations. To ensure operational resilience in these challenging times, organisations should consider following the 3 point plan discussed in this article.

An operational resilience enforcement threat looms ( Bradley Rice , Adam Jamieson , Nisha Sanghani ACA BFP )

Regulators in the UK and further afield are homing in on the operational resilience of firms in the financial services sector and those that serve it.