The financial landscape continues to evolve rapidly across both sides of the Atlantic. Here are the key developments shaping our industry from the last month:?
- Large banks reviewing the impact of Basel endgame, with potential shift after election news: The Federal Reserve is weighing up a 9% increase in capital requirements for global systemically important banks (G-SIBs), intended to bolster financial resilience. Although the rate has reduced by half from the initially proposed 19% (announced July 2023), this move may still prompt higher borrowing costs as banks pass the expense of reduced liquidity onto consumers and businesses. While capital requirements could lead to tighter credit access, a potential reduction in risk-weighting for specific loans might counterbalance these impacts, easing pressure on certain credit types. Concrete news is still a way off with speculators musing there is "reluctance of regulators to make big proposals prior to an election". As the election results iron out over the next week a potential Trump administration could usher in changes for Wall Street around compliance and market oversight, Crypto regulation and ESG reporting. Firms need to be prepared for market volatility and the ability to adapt quickly. ?
- European Sustainability Funds have seen a recent surge to €8 trillion under SFDR Article 8 and 9 rules according to latest MSCI report. Exchange-traded funds (ETFs) focused on utilities reported the highest taxonomy alignment and a higher number of European-domiciled funds have over 5% taxonomy-aligned capital expenditure compared to aligned revenues. The European Securities and Markets Authority (ESMA) has tightened fund-naming rules to combat the rise in potential greenwashing.?
- The UK budget was announced last week with a clear?focus on fiscal discipline and focus on growth. Broadly welcomed by businesses and banks as share prices spike and taxes on the sector remain stable. ?
- Moving to APAC, The Monetary Authority of Singapore (MAS) and The Australian Securities and Investments Commission (ASIC) derivatives reporting rewrites went live on October 21st joining EMIR Refit EU and UK updates earlier in the year. The International Swaps and Derivatives Association (ISDA) have extended Digital Regulatory Reporting (DRR) to support these jurisdictions, and the focus will now quickly turn towards Canadian and Hong Kong rewrites through 2025.?
- Regulatory changes driving transformation plans: The ever-changing regulatory landscape, including recent updates to TRACE and FINRA standards, is putting pressure on financial institutions to enhance their reporting capabilities and ensure data accuracy. This push is escalating data transformation projects and fast-tracking data objectives.??
- Integration Challenges: Legacy system limitations with new end of life updates, multiple vendor relationships creating reconciliation bottlenecks and cloud migration initiatives all impacting integration challenges. Robust vendor and data validation programs underway for many new prospects. ?
- Learn the 5 steps to achieve data modernization as Julian Trostinsky, Global Director of Solutions Engineering at Gresham, shares the insights you need to transform your financial operations. The blog reveals some real-world success stories from our clients on their data modernization projects. https://lnkd.in/eJ9bv4j4?
