The Banking sector has undergone in last decade of 30 Years substantial changes, however the upcoming period will represent major challenge in terms of scope and dynamics for implementation of new controls, internal processes and reporting schemes that Banks are supposed to put in place in period of 2019 – 2022.
In fact, major changes have been triggered by (i) newly imposed Regulations after series of financial crises and (ii) new Product platforms that are coming out of online applications, instant products and other elements that are required by modern trends. This section will try to embrace both aspects, as the first one is addressed in Basel requirements, EMIR, MIFID, Anacredit, Leverage Transactions etc., while the latter one can be seen in measures of GDPR and PSD2. The scope of these regulations is not definitive for sure, as global and European regulators are trying to set higher level of diligence on financial sector after the expected self-regulation and internal controls have failed to curb the extensive trading positions mainly in Derivatives area so that the Banks’ exposure was not able to be handled (and potential losses not covered by regulatory Equity) by the Banks shareholders solely and the central Banks or Government had to assist via coordinated Bail-out (Capital injections).
Given the growing globalization, increasing needs for a fresh capital and growing Leverage of the corporate world, financial sector and Governments at all, it seems to be clear that when next Financial crises will happen, it will have more severe impacts on global economy than what we have been witnessing in the previous ones. And therefore the regulators are implementing new rules on limiting the unsecured trading positions, increasing the Capital requirements and capping the exposure towards the Corporate segment, as much as possible.
Understanding the regulatory requirements was never easy in general, that’s why in this section the utmost effort will be put on to provide complex view on all major regulations and to explain their reasoning resp. interlinks with each other, as well.